Editorial Board of “Holistic Marketing Management” (A refereed journal published four times annualy by the School of Management-Marketing of the Romanian-American University) Editor -in- Chief Theodor Valentin PURCĂREA Editorial Board
John L. STANTON Léon F. WEGNEZ William PERTTULA Levent ALTINAY Dana ZADRAZILOVA Riccardo BELTRAMO Sinisa ZARIC Gabriela SABĂU Hélène NIKOLOPOULOU Vasa LÁSZLÓ Peter STARCHON John MURRAY
Managing Director EuroHandels Institute Retail, Germany; President of EuCVoT; President of European Retail Academy; Member of the Astana Economic Scientists Club; Chairman of the Advisory Board of EuroShop; Chairman of the Board of the Orgainvent; Trustee of EHI Retail Institute at GLOBALG.A.P. Association of Management and International Association of Management, USA; Australian Graduate School of Entrepreneurship, the Faculty of Business and Enterprise, Swinburne University of Technology; Member of France’s National Academy of Scientific Research (CNRS) Professor of Food Marketing, Erivan K. Haub School of Business, Saint Joseph’s University Philadelphia, USA;; Editor, Journal of Food Products Marketing Secretary General, International Association of the Distributive Trade, AIDA Brussels;; Member of France’s Academy of Commercial Sciences Internet Marketing Professor, College of Business, San Francisco State University, USA Professor of Strategy and Entrepreneurship, Research Area Leader, Oxford School of Hospitality Management, Faculty of Business, Oxford Brookes University, UK Dean of Faculty of International Economic Relations, University of Economics, Prague, Czech Republic University of Turin, Italy University of Belgrade, Yugoslavia Memorial University, Grenfell Campus, Corner Brook, Canada University of Lille 3, France Szent Istvan University, Hungary Comenius University in Bratislava, Slovakia Faculty of Business, Dublin Institute of Technology, Ireland
Faculty of Economics,University of South Bohemia in Ceske Budejovice
President of Romanian Scientific Society of Management- SSMAR
Irena JINDRICHOVSKA Dumitru MIRON Valeriu IOAN-FRANC Iacob CĂTOIU Virgil BALAURE Gheorghe ORZAN
Luigi DUMITRESCU Holistic Marketing Management
Deputy Head of Department of Business Economics, University of Economics and Management, Prague, Czech Republic Academy of Economic Studies in Bucharest National Institute for Economic Research, Romanian Academy; Romanian Marketing Association Academy of Economic Studies in Bucharest Academy of Economic Studies in Bucharest Academy of Economic Studies in Bucharest
Lucian Blaga University of Sibiu 1
Marius D. POP Petre FILIP Ion VOICU SUCALA Virgil POPA Ana-Maria PREDA Ileana PONORAN Ovidiu FOLCUȚ Doinița CIOCÎRLAN Marius Dan DALOTĂ Mihai PAPUC Gheorghe ILIESCU Alexandru IONESCU Olga POTECEA Oana PREDA Nicoleta DUMITRU Monica Paula RAȚIU Costel NEGRICEA
Babes-Bolyai University, Cluj-Napoca Dimitrie Cantemir University, Bucharest Technical University of Cluj-Napoca, Management and Economic Engineering Department; University of Glasgow, UK, College of Social Sciences, School of Social & Political Sciences; Managing Editor, Review of Management and Economic Engineering Valahia University of Târgovişte Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University
Technische Universität München, TUM School of Management
Associate Editors Cristina NEAGOE Dan SMEDESCU Alexandra MIRONESCU Art Designer Director Alexandru BEJAN
Holistic Marketing Management
CONTENT Theodor Valentin PURCĂREA
Editorial: The organizational health, the emotional memory of the organization, the positive associations of CRM capabilities, and the desired change to drive organizational performance................................................
Multinational Companies and Sustainability Practices beyond Headquarters – Evidence from Foreign Subsidiaries in the Romanian Food and Beverages Industry ...............................................................................
Impact of the Rational Type Factors on Client Satisfaction on the Romanian Insurances Market...................................
Management in the Romanian Companies and the Issues that Call for its Modernization...........................................
Elisabeta Andreea BUDACIA, The Buying Behavior of Organizations............................... Marian Florin BUSUIOC
Nicoleta Rossela DUMITRU, Internal Communication - a Prerequisite for Ivona STOICA Oganizational Effectiveness.................................................
The Role of Strategy in the New Oganizational Context.....
Florinel COŞERIN Ioana Daniela COȘERIN Victor COŞERIN
Modern Management Tools Adaptable within Boundary Crisis of the Public Sector...................................................
Natalia BURLACU Mariana CRINTEA
Emphasizing Managerial Viability of the Economic Forces Concentration Held by the Acquiring and the Acquired Company within the Merger Process...................
Pawel PYZIAK Alexandra MIRONESCU Sebastian STEPIEN
Resizing Employability throughout Vocational Education and Trening Promotion........................................................
Florinel COŞERIN Paul COȘERIN
Complex Seaports Managerial Emphasis within the Environmental Security and Safety Context........................
Sebastian STEPIEN Alexandra MIRONESCU
Working Paper upon Competitive Business Risk ReviewHuman Capital Outcast......................................................
The responsibility for the content of the scientific and the authenticity of the published materials and opinions expressed rests with the author.
Holistic Marketing Management
Editorial: The organizational health, the emotional memory of the organization, the positive associations of CRM capabilities, and the desired change to drive organizational performance In our last editorial (In a time of deepening crisis, remaining in the game for customers thanks to the “relationship culture” necessary to the resilient organization) we highlighted, among other aspects, the idea of the necessity of a sense of precision of routine (which can be employed during stressful times) and of considering the disadvantage of a resilient person (who might rather sacrifice the company than himself in times of trouble). We thought that it would be useful in what concerns ensuring continuity of the debates initiated, introducing also some elements that result from current responsible concerns. The more so as we are obliged to avoid (Karl) Albrecht's Law: “Intelligent people, when assembled into an organization, will tend toward collective stupidity.” Why? In order to be able to better understand the significance of bringing together the two quotes at the end of the editorial. It is known that the content of organizational memory (OM) involves declarative and procedural memory, a less obvious aspect of OM being the emotional memory (EM).1 . A. E. Akgun, H. Keskin and John Byrne showed that as EM influences the routines of the organization, their beliefs, and procedures, management should consider the past emotional experience in order to be more innovative. They argued among others that a well understood and vivid EM can facilitate a stronger relationship with declarative and procedural memory. The real problem today is to focus (conventional wisdom) on the good things, as goals you must achieve by caring about the economic and social outcomes of your actions, while surviving this actual deepening crisis and remaining still in the game for your customers. And for this it is necessary to have the right journey approach that will allow a valuable perspective on the steps to take if things don’t work out as you planned. An important challenge on the way appears to be, for instance, understanding the moderating effect of environmental factors such as competition intensity and market growth rate on the relationship between Customer Relationship Management (CRM) capabilities and business performance.2 According to Yonggui Wang and Hui Feng, there are three CRM capabilities: customer interaction management capability (the skills that organizations use to identify, acquire and retain profitable customers); customer relationship upgrading capability (the skills that organizations use for up-selling and cross-selling to existing customers); customer win-back capability (the skills that organizations use to re-establish the relationship with lost or inactive but profitable customers). These three capabilities have positive association with customer orientation, customer-centric organizational system and CRM technology. And stronger capabilities lead to improved business performance. In September this year, Toby Gibbs, Suzanne Heywood, and Matthew Pettigrew attracted our attention3 that people in the organization need to have real targets and incentives to focus on the long term, and the so-called “soft” measures of organizational health (leadership, innovation, quality of execution, employee motivation, or a company’s degree of external orientation) need to be converted into annual performance metrics. Any organization should start to think about individual performance in the light of three core principles (such us: root out unhealthy habits; prioritize values; keep it simple but meaningful), considering that health-related considerations are just as important as performance-related ones.
A. E. Akgun, H. Keskin and J. Byrne – Organizational emotional memory, in Management Decision, Emerald Group Publishing, Vol. 50, No. 1, 2012, pp. 95-114 2 Y. Wang, H. Feng – Customer relationship management capabilities. Measurement, antecedents and consequences, in Management Decision, Emerald Group Publishing, Vol. 50, No. 1, 2012, pp. 115-129 3 Toby Gibbs, Suzanne Heywood, and Matthew Pettigrew - Encouraging your people to take the long view, McKinsey Quarterly, September 2012 Holistic Marketing Management
Two principals in McKinsey Offices, Carolyn Aiken and Scott Keller, argued in 20094 that in order for a desired change to drive performance, the organizations needs the skills and talent of their employees, in order to achieve an improved understanding of how humans interpret their environment and choose to act. Because it is well known that good intentions aren’t enough and employees are what they think, feel, and believe in. Changing the way employees behave is not a simple matter. Carolyn Aiken and Scott Keller took into consideration the four basic conditions (a holistic perspective in “The psychology of change management”5) necessary before employees will change their behavior: a compelling story (because employees must see the point of the change and agree with it); role modeling (because they must also see the CEO and colleagues they admire behaving in the new way); reinforcing mechanisms (because systems, processes, and incentives must be in line with the new behavior); capability building (because employees must have the skills required to make the desired changes). But McKinsey representatives caught our attention concerning the importance of putting the four conditions in place by: not disregarding certain, sometimes irrational, but predictable, elements of human nature; ensuring they reinforce each other in ways that maximize the probability of the change spark taking off like wildfire across the organization. As a conclusion – and beyond the humoristic quote with Albrecht's Law in the first line – we consider appropriate to bring together two other quotes: “A corporation is a living organism;; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation” (Andrew Grove);; “Performance leads to recognition. Recognition brings respect. Respect enhances power. Humility and grace in one's moments of power enhances dignity of an organization” (Narayana Murthy).
Theodor Valentin Purcărea Editor - in - Chief
Carolyn Aiken and Scott Keller - The irrational side of change management, The McKinsey Quarterly, Number 2, 2009, pp. 103-109 5 Colin Price and Emily Lawson, “The psychology of change management,” mckinseyquarterly.com, June 2003 Holistic Marketing Management
MULTINATIONAL COMPANIES AND SUSTAINABILITY PRACTICES BEYOND HEADQUARTERS – EVIDENCE FROM FOREIGN SUBSIDIARIES IN THE ROMANIAN FOOD AND BEVERAGES INDUSTRY Roxana CODITA, PhD TU München, TUM School of Management Alte Akademie 14, D- 85354 Freising roxana.Codita@tum.de
Abstract: This article is based on in depth face-to-face interviews, which were conducted in September 2006 with 8 managers of 6 foreign subsidiaries in Romania as well as with a Greenpeace representative and a consultant on environmental issues in the food industry. The findings of this study have been presented at the 3rd Annual International Sustainable Development Research Conference, Västerås, Schweden, 10-12.06.2007. Results indicate that subsidiaries of multinational companies tend to adopt the environmental and social standards imposed by the headquarters regarding supply and production policies, but these aspects do not flow into the product marketing. Communitydirected social and ecological activities are communicated under the CSR umbrella. Neither market nor stakeholders pressures are being felt at the subsidiary level, so that the motivation for adopting sustainability practices derives almost exclusively from headquarters policies. Keywords: sustainability practices, neo-institutional theory, multinational companies, food and beverages industry JEL Classification: F23, L66, M14, M31 1. Introduction There are few topics that polarize the public opinion all over the world to such extent as the globalization issue does. Multinational corporations, the engines of world trade, have long been criticized for their lack of social and environmental responsibility (Greider, 1997; Gray, 1998; Korten, 2001). Their irresponsible behaviour may eventually lead to the worldwide erosion of social and environmental standards, more marked social asymmetries and the permanent damage to the environment (Gray, 1998). At the same time multinational companies are credited with a major potential in promoting sustainable development by transferring environmentally friendly technologies and know-how to host countries, raising awareness and educating consumers on social and environmental problems (Levy, 1995). This sustainability debate seen in the globalisation context has fuelled the authors to address a different and differentiated question than whether multinational companies (MNC) have a
positive or negative contribution to sustainable development. Rather the question to be asked is whether one and the same company has the same share in sustainable development in every place it operates. Basically, MNC have two options regarding the design of their sustainability policies: either they tailor their strategy to match the institutional profile of each individual country or they set global standards, which must meet the most stringent expectations (Rugman and Verbeke, 2001). More and more companies have added sustainability issues to their business agenda, as a result of the increasing awareness and the expression of social and ecological concerns in developed societies (Kolk, 2003). Multinational corporations increasingly communicate their efforts regarding the integration of the three principles of sustainable development (Elkington, 1998)- environmental integrity, social equity and economical prosperity- into their business activities, by publishing separate or joint reports like Social and/or Environmental Responsibility Report (Unilever, Danone), Corporate Social Responsibility Report (Nestlé, General Mills) or Corporate Citizenship Report (Diageo). On a time line, we could say that corporations seem to be gradually moving from shareholder value driven practices towards stakeholder-oriented, sustainable policies. But to what extent do MNC manage to replicate their sustainability policies and practices in their foreign subsidiaries all over the world? This study intends to answer following research questions: 1.) Do MNC attempt to transfer sustainability practices to their foreign subsidiaries? 2.) To what extent are sustainability practices being adopted by foreign subsidiaries of multinational companies? 3.) How do foreign subsidiaries balance external institutional pressures and internal organizational pressures? These questions have been addressed in an exploratory study conducted in Eastern Europe, particularly Romania in autumn 2006. In the present paper, the authors present the theoretical background (section 2), describe the methodological approach (section 3), present (section 4) and discuss (section 5) the results of the empirical study. The conceptual framework presented in this paper draws on institutional and resource dependency theory in order to explain the dynamics of the institutionalization process of sustainability practices throughout foreign subsidiaries and headquarters. The paper intends to make a theoretical contribution to neoinstitutional theory by: 1) proposing a conceptual framework to explore the role of multinational companies as agents of institutionalization of sustainability practices across national borders and 2) integrating the theory of institutional duality in MNC in the sustainability literature. 2. Theoretical Background Neo-Institutional Theory Neo-institutional theory stresses that business choices are not exclusively the result of managers’ rational economic decisions, but they are also influenced by external norms, values and traditions, which provide the organization with a sense of social legitimacy (DiMaggio and Powell, 1983, 1991a; Oliver, 1991; Scott, 1995). Management choices and practices thus incorporate social and cultural pressures (Scott, 1992) to gain or maintain social legitimacy, considered a key factor in determining a business facility’s long-term profitability and survival (DiMaggio and Powell, 1983, 1991a). Institutionalization ultimately results in a “social
construction process” in which companies in the same organizational field 6 gradually become alike, due to the influence of external pressures on the selection and implementation of strategies (Scott, 1995). DiMaggio and Powell (1983, 1991b) identified three types of institutional mechanismscoercive, mimetic and normative isomorphism- that foster this convergence phenomenon. Pressures applied by governments, which rely on mandatory standards, monitoring, and sanctions, are of coercive nature (Meyer and Rowman, 1977). Coercive pressures can also be exerted by organized societal interests, for instance by environmental groups or the media, which have the potential to successfully challenge the corporate’s social legitimacy. The changes resulted from such pressures lead to coercive isomorphism among companies. Normative isomorphism occurs when companies adopt values and norms of conduct promoted by professional networks, professional or industry associations, academic institutions and industry-wide initiatives such as voluntary programs (DiMaggio and Powell, 1991b). This type of influence rests on peer pressures and embarrassment of noncompliers (Hoffmann, 1999). The third institutional mechanism causes companies to imitate each other’s behaviour, especially that of the most profitable and respected companies in their industry, in order to appear legitimate and competitive. Giving in to this type of pressures leads to mimetic isomorphism (DiMaggio and Powell, 1983). The firm’s institutionalization process will be different depending on the source of pressure. Resource-Dependency Theory However, the assumption that firms would passively conform to all institutional pressures, neglects the role of organizational self-interests and active agency behaviour in moderating firms’ response to institutional pressures (Oliver 1991, Cashore and Vertinski, 2000). An answer to this criticism is offered by resource dependency theory, which proposes that firms “will respond more to the demands of those organizations or groups in the environment that control critical resources” (Pfeffer, 1982, p. 193). Firms will, hence, act in self interest and acquiesce to those pressures that decide over critical resources. Resource dependency theory defines the criticality of a resource as a function of “the importance of a particular resource to the organization, the degree to which those who control the resource have monopoly over the resource, and the discretion they have over its allocation” (Jawahar and McLaughlin, 2001, p. 401). In her article “Strategic Responses to Institutional Pressures”, Oliver (1991) added the resource dependency perspective to institutional theory, by identifying a range of strategic responses to the institutional environment: Besides acquiescing to external pressures, firms might also compromise, avoid, defy or manipulate, depending on their degree of choice and activeness exhibited. Institutionalization as a Process While early institutional theorists mainly examined convergence processes among organizational actors, a growing number of researchers turned their attention towards institutional change, analyzing the origins of new types of organizational practices (Greenwood 6
An organizational field is defined as “those organizations that… constitute a recognized area of institutional life: key suppliers, resource and product consumers, regulatory agencies and other organizations that produce similar services or products” (DiMaggio and Powell, 1983, p. 148).
and Hinings, 1993; Aldrich and Fiol, 1994; Suchman, 1995; Dezalay and Garth, 1996; Ventresca and Porac, 2003) as well as their eventual decline (Zucker, 1988; Scott et al., 2000; Scott, 2004a). Tolbert and Zucker (1996) regard institutionalization as a process unfolding in three stages: from pre-institutionalization, semi-institutionalization or progressive institutionalization to full institutionalization. Thus, the adoption of a practice evolves from an initial stage, characterized by few adopters and limited knowledge, to a final stage when the practice is “taken for granted by members of a social group as efficacious and necessary” (Tolber and Zucker, 1996, p. 179). Institutionalization of a practice is determined by two dimensions, implementation and internalization (Kostova, 1999). Implementation represents the degree to which formal rules implied by the practice are followed within the organization, while internalization occurs when the organization members attach symbolic meaning to the practice, or “infuse it with value” (Selznick, 1957, p. 17). Institutional Duality Neo-institutional theory provides an appropriate conceptual platform to study strategies of multinational companies, which operate in multiple institutional environments and under diverse institutional pressures (Xu and Shenkar, 2002). This paper deals specifically with the transfer of organizational practices from the parent company to its foreign subsidiaries. Organizational practices are defined “as particular ways of conducting organizational functions that have evolved over time under the influence of an organization's history, people, interests, and actions” (Kostova 1999, p. 309). The organizational practices under scrutiny consist of corporate social and environmental practices, which are referred to as sustainability practices. Subsidiaries of multinational companies are expected to adopt heterogeneous sets of responses to practices imposed by the headquarters, as they are seeking to maintain both internal legitimacy within the organization and external legitimacy within the host-country. Kostova and Roth (2002) refer to the concurrent influence upon foreign subsidiaries of local institutional pressures and organizational pressures within the MNC as institutional duality (see figure 1). The active agency behaviour of foreign subsidiaries is thus shaped by the institutional profile of the home-country, defined as “the issue-specific set of regulatory, cognitive, and normative institutions in a given country”, as well as by the internal relational context in the organization (Kostova and Roth, 2002). Levy and Rothenberg (2002, p. 176) argue that “each company interprets the institutional environment through a unique lens, a product of its history, organizational culture, and market positioning”. The fact that multinational companies operate within multiple institutional fields exposes them to different repertoires of institutionalized practices and norms (Westney, 1993; Levy and Rothenberg, 2002). Therefore, balancing global integration and local orientation is one of the main challenges faced by multinational companies (Westney, 1993).
Foreign Subsidiary institutionalization
Local Institutional Environment
Figure 1: Basic Model: Institutional Duality at the Foreign Subsidiary Level 3. Methodology Industry Focus: Food Processing Industry By focusing on a specific industry the study takes a field-level approach, which confers an analytic value-added (Hoffman and Ventresca, 2002). After air and water, food is the most essential resource people need to sustain their existence. Yet the food production system often severely damages the natural environment through soil depletion, overuse of water, deforestation, aggressive use of pesticides, fishery collapses, and the loss of biodiversity in crops, livestock, and wild species. The activities pertaining to the food system have a deepimpact not only on the environment, but also on the community: This can be related to fair working conditions and respectable wages, the guarantee of food safety as well as to the maintenance of rural communities and family-owned farms. Starting from the production, processing, transportation, selling, storage, cooking and eating of food, to the disposal of the produced wastes (Tansey and Worsley, 1995; Millstone and Lang, 2003), the whole food chain should be transformed towards sustainability. The food system in industrialized countries is striving high labour productivity and economies of scale, which are achieved by resorting to intensive use of soil, irrigation, pesticides, fertilizers, or genetic engineering. Such practices lead eventually to higher volumes and shortterm profits, but these come at the cost of degraded cultivated land, reduced ecological diversity of cultivated crops, and the promotion of a consumption pattern leading to waste, deliberate destruction and underuse of food resources (Shrivastava, 1996). In Central Eastern European (CEE) countries, the challenges confronting the food system are rather of economic and social nature: land abandonment resulting in a decrease of soil quality and impoverishment of biodiversity, lack of financial resources, unclear property rights, rural poverty, ageing of the rural population (Beckmann, 2001; Gatzweiler and Hagedorn 2003). The farming systems in CEE are dualistic in structure: There are a small number of large–sized, market–oriented agricultural enterprises and a large number of small– and medium–sized family farms, often producing for subsistence and only partly producing for the market. Though
the farming structure is expected to change towards a higher consolidation degree and subsequently to a more intensive form of agriculture, the environmental and social impact of the food system could in this way decrease, provided that sustainable production and management practices are adopted (Gatzweiler and Hagedorn, 2003). Multinational food manufacturers, as a major factor of influence both on the supply as well as on the demand side, can play a crucial role in promoting sustainability along the whole food chain. Geographical Focus: Romania Representing the second largest market in the Central-Eastern European region after Poland with a population of nearly 22 million, Romania lived 2006 its 7 th consecutive year of economic growth at a steady rate of over 5%, within a stable political environment. In 1995, at the same time as other candidates from Central and Eastern Europe, Romania submitted alongside Bulgaria its application for accession to the European Union. In October 2004 the European Commission concluded that Bulgaria and Romania complied with the political accession criteria, but they still had to comply with the economic and legal criteria in order to be ready for accession on 1 January 2007. As of January 1 st 2007, Romania and Bulgaria are full members of the European Union. This ongoing process of economic and institutional reforms, necessary to gain the arduously desired European Union Membership, bestowed Romania with an increasing interest on the part of foreign investors. The country reported last years one of the highest foreign direct investment levels in Europe (EU, 2006). International companies and investors are increasingly joining the Romanian scene. In some sectors, foreign companies have already secured themselves an important share of the market. Taking the food market for example, Austrian (Brau-Union AG) and Athens-based (Coca-Cola HBC) investors dominate the beverage sector, French and Dutch companies (Danone, Friesland, Campina) bestride the milk sector, American investors (Bunge and Cargill) control the edible oil sector, a Dutch (Unilever) and a Norwegian (Orkla Foods) company part the margarine market and the examples could continue for other food sectors. By selecting Romania as the location of this study, the authors intend to put the sustainability debate, until now most visible in developed countries (SustainAbility, 2002), in the context of emerging markets. Data and Procedures Given the clear need to understand the current implementation stage of sustainability practices and the motivation for adopting them, an exploratory qualitative approach was chosen for this study. Qualitative methods are particularly useful to study in-depth a small number of people or organizations but reduce the possibility of generalizations (Maxwell, 1996; Mason, 2002). In this case the qualitative approach was used to investigate the interdependency between local institutional forces, headquarters management and the adoption of sustainability practices, without considering the selected firms as a representative sample for the whole Romanian market. It is a hypothesis-generating rather than a hypothesis-testing approach to a complex and not yet well-understood topic. The sampling consists of multinational food processing companies with a foreign subsidiary in Romania that claim to have adopted sustainability practices at the headquarters level, e.g. they publish sustainability reports. Beyond that, the companies approached are market leaders in their segment in Romania. This is a purposive sampling, as companies were deliberately selected to provide interesting information from a
theoretical point of view (Maxwell, 1996; Mason, 2002). The authors maintain that large multinational companies that are also local market leaders, thus enjoying high public visibility both at the global and local level, would exhibit the greatest potential to actively transfer sustainability practices. This pre-study was intended to lay the conceptual foundations for further in-depth case-studies and identify possible case-study partners. Case-studies are generally considered to be well suited to the research aims of generating and building theory in an area with relatively little existing data and theory (Bonoma, 1985; Eisenhardt, 1989; Yin, 1989). In depth face-to-face interviews were conducted between 11. - 23. September 2006 with 8 managers of 6 foreign subsidiaries in Romania and one expert interview with a Greenpeace representative and a consultant on environmental issues in the food industry. In August 2006 twenty managers were contacted via e-mail, with a positive answer from three of them. Hereafter another e-mail of recommendation has been sent by the Romanian Council of Foreign Investors and six more companies answered positively. Due to various (mis-)coordination reasons such as lack of time or of appropriate interview partners, the positive reply of Pepsi, Nestlé and SAB Miller did not materialize. In the case of Zaharul S.A., the general manager had to call off the appointment on short notice, delegating instead a legal advisor, a marketing manager and the chief controller to the interview. Company/ Organization
Table 1 presents the companies interviewed. Interviewee Position
Unilever South-Central Europe
Cargill Orkla Foods Zaharul S.A. (Sugar S.A.)
Martin Schuldt Dinel Oarfa Diana Cosma Melinda Robas
Gabriel Paun Dragos Dima
Corporate Affairs and Communication Manager Corporate Affairs and Communications Manager Corporate Affairs and Communications Manager Merchandising Manager Supply Chain Manager Legal Advisor Chief Controller Marketing Manager Project Coordinator Consultant
Location Bucharest Bucharest Bucharest Bucharest Bucharest Oradea
Table 1: Interview Partners A semi-structured interview schedule was used and interviews typically lasted between 40 and 120 minutes. The interview guide (see Figure 2) was designed in relation to the defined research questions of the study. This methodology allowed respondents’ motivations to be explored in detail, enabling a richer understanding of the reasons behind particular
environmental and social practices. Additionally, following written documents were included in the analysis: corporate sustainability reports, local websites, press releases and brochures of the local subsidiaries. 1.
Debates on how responsible corporate behaviour should look like are increasingly taking place on a local and global level. From the perspective of your company (e.g. Danone Romania), what is the role of a company in the society? 2. Bearing in mind the whole value chain of your products (starting from procurement, production, packaging, consumption till recycling), which social and ecological aspects does your company consider along it? (sustainability practices) 3. When did your company become engaged in the social and ecological area and what determined initially the orientation towards these problems? To what extent was, and eventually continues to be, the management of your mother-company involved in this area? (headquarters/ internal pressure) 4. How do you judge the impact of various external stakeholders, e.g. civil society, massmedia, governmental agencies, competition, customers over your organization’s environmental and social policies? Eventually you can resume yourself to those you consider relevant for your company. (local institutional environment/ external pressure) 5. To what extent does your marketing strategy take into consideration and communicate the ecological and social performances of your products/ company? Do you consider that sustainable products (defined as products that satisfy customers’ needs, but compared to the market standard, have a reduced impact on the environment and a social positive effect for the employees, local communities and consumers) enjoy a competitive advantage on the Romanian market? How do you appreciate the future of the market for sustainable food products in Romania and what role will your company play in this context? Figure 2: Interview Guide 4. Empirical Results A coding scheme (see table 2) was developed, using a mixed approach to coding. Accordingly categories were derived both inductively, from the empirical material, and deductively, based on institutional duality (Miles and Huberman, 1994). The two first order categories represent on the one hand the “what” or the descriptive dimension captured by “sustainability practices in the foreign subsidiary”, and on the other hand the “why” or the explanatory dimension reflected in the category “pressures”. The second-order category identifies on the one hand the areas where the local subsidiary implements sustainability practices, and on the other hand classifies the source of pressures into organizational and local institutional pressures. First-Order Category Second-Order Category Sustainability Practices Procurement in the Foreign Subsidiary Production Marketing Pressures Organizational Pressures Local Institutional Pressures Table 2: Coding Scheme
The next sections will present the information gathered, by subsuming data to the above defined categories 4.1. Sustainability Practices in the Foreign Subsidiary 4.1.1. Procurement On the procurement side, the focus lies on social aspects. None of the interviewed companies purchase their raw materials from organic farming. Their efforts concentrate on enhancing the suppliers` technical, managerial and financial capacity in order to improve their quality and safety standards. Danone initiated in April 2005 the program “Reaching West”, intended to support small farmers to acquire modern equipment like milking machines and genetically superior cows. “At the beginning of the year, about 80% of the farmers in Romania had on average of 2 cows. With Romania’s entry in the EU, things become complicated for the farmers, because, besides the need to bring up a quota, their milk has to feature a European quality, meaning a certain number of germs, no inhibitors... If you own two cows, you don’t afford to buy these machines which help you attain the European quality standards”. The program consisted of preferential credits negotiated by Danone with various banks. Farmers which had an audit certification from Danone and a long-term contract could thus access credits with lower interest rates. This program was complementary to the programs of the European Union Agency SAPARD 7. The Danone´s supplier audit is set at the group level. “The program supports the establishment of family farms of about 70 cows, which would be able to implement the modernizations imposed by the European Union, while next years the number should increase at an optimum of about 350 milk cows. We consider that this average number of cows per farm maintains a corresponding load of animals per hectare and fits the concept of sustainable agriculture – a correct soil exploitation and the prevention of environmental degradation”. (Press Release Danone Romania, April 17, 2006). Most of the over 100 farms delivering milk to Danone, do this on an exclusive basis, as Danone commits to pick up their whole milk quantity irrespective of seasonal fluctuations. Danone enhances the know-how and managerial capacity of their farmers in Romania by offering them guidance through company consultants. The procurement practices of Danone Romania are thus mainly directed at ensuring the quality, safety, and traceability of the primary raw material: milk. Zaharul S.A. procures its sugar beets entirely regionally from farmers with partially reduced financial and technical capacity. The company assists them both with educational and consulting programs and with material resources (seeds, pesticides etc.). A company consultant is assigned to a number of cultivators, who trains the farmers on environmental topics, such as secure handling and safe disposal of pesticides, on modern cultivation methods and on work safety. A measure they undertook for the first time last year was to equip the transportation 7
SAPARD (Special Accession Programme for Agriculture and Rural Development) was established in June 1999 by the Council of the European Union to help countries of Central and Eastern Europe deal with the problems of the structural adjustment in their agricultural sectors and rural areas, as well as in the implementation of the acquis communautaire concerning the Common Agricultural Policy and related legislation.
vehicles with a device that cleans the sugar beets from dirt at the source, thus optimizing the transportation quantity and costs. Orkla Foods stressed the high standards they apply to their suppliers with special attention to traceability, food safety and quality: “All our suppliers have to fulfill strict norms regarding the logistical conditions of transportation and delivery of the merchandise […]. Regarding traceability, every supplier has to ensure the traceability of every product, irrespective of whether it concerns raw materials or packaging [..]. They are compelled to fill out the forms “GMO- and allergens-free”, accept at any time an audit from Orkla and permit the audit in all critical points”. The interview partner considered these standards to exceed by far the local legal requirements. Because of the incapacity of Romanian cultivators to fulfill the quality standards required, they are even considering to give up the procurement of fresh fruits for their jam production, even if this means an image loss. They also pursue a non-GMO policy and source only non-GMO ingredients: “For instance, the soy oil we used to buy from Cargill, is no longer imported. We actually even eliminated this ingredient from the margarine recipe because of the risks of GMO contamination”. Although Romanian legislation requires that GMO-products be labeled accordingly, not even one laboratory exists in the country to carry out controls: “Orkla does not wait for the Romanian legislation [to become effective]; we implement the policies required by the headquarters”. For Cargill instead GMO is not an issue, as they “offer what the market wants, and if the market buys GMO-products, we offer GMOproducts”. Coca-Cola and Unilever stated that their procurement policies are fully aligned to those of the mother company. “When we enter into a contract with a supplier, as an integral part of this contract, they sign Unilever´s Code of Business Practices, and there we refer to air quality, interdiction of child-work, relationship with the consumers, exploitation, fair competition etc.” 4.1.2. Production The production facilities of the companies interviewed are operating according to high environmental and social standards. Most of them have implemented ISO 14001, OHSAS 18001 (Occupational Health and Safety Assessment Series), IFS (International Food Standard) and/or HACCP (Hazard Analysis Critical Control Point). The general impression gained from the interviews is that most environmental and social activities are concentrated in the area of production. The investments directed at improving the environmental and social performance of the production facilities come to support this statement. Danone for example launched in October 2005 a wastewater treatment station, a project financed in partnership with SAPARD, amounting to 1.5 million euros. The station has a capacity of 1,200 cubic meters per day, at present functioning at about 40 percent of its total capacity. Orkla Foods too invested 0,75 Mio. EUR in a 1,5 Mio. EUR project aimed at improving the working environment at their canned meat and paté plant. Orkla is also relocating an important part of their production activities from the plant in Craiova to Bucharest, to decongest the Craiova plant, located in the middle of the city. In the long run, the Craiova plant will be completely relocated. “In Covasna we own one of the most modern factories in Romania, regarding microbiological control, production processes, raw materials…” The group established a Food Safety Standard that “applies to all factories in the Orkla Group that
produce food and beverages. The standard is based on the internationally recognised Food Technical Standard of the British Retail Consortium. The Orkla Food Safety Standard, introduced in 2004, has created a uniform approach to food safety in the Orkla Group, thereby making it easier for companies to exchange products.” (Corporate Website) All six Coca-Cola HBC Romania plants have received The Coca-Cola Company’s Environmental Management System eKOsystem certification, as well as ISO 14001 certification. Lloyds Quality Assurance Ltd., an internationally-recognized auditor, surveyed all Coca-Cola HBC Romania’s bottling plants in 2004. The maximum rating-"clear pass," which is rarely obtained by all the plants in a country-was issued to them. For Coca-Cola Romania“the protection of the natural environment represents more than abiding by the local laws and norms in this area. Coca-Cola integrates in its daily activities environmental practices. Even in the absence of specific environmental regulation, the company’s divisions act in a responsible manner, in conformity with the requirements of the corporate environmental standards.” Zaharul SA is the only sugar producer in the country possessing a microbiology laboratory. They pursue an integrated management system: quality-environment-health and occupational safety, being ISO 9001, 14001 and OHSAS certified. Unilever was a pioneer in introducing modern management systems: “Unilever had all systems implemented, even before Romania introduced any legislation on any system you can think of, and the most often mentioned is the HACCP.” Regarding the employees, among the programs mentioned there were private health insurances, life insurances or membership cards for fitness centres. In terms of internal communication, the author could notice the display in and outside the offices of some companies (Danone, Unilever, Zaharul) of various sustainability-related principles and guidelines, from general environmental, social and safety policies, to concrete office rules (in Unilever and Zaharul), such as: recycle paper, send e-mails instead of letters, print double-sided pages, re-use envelopes for in-house mail etc. 4.1.3. Marketing The activities directed at promoting sustainable consumption are mainly concerning educational aspects. These regard for example dietary habits, nutrition, stimulation of sports activities, information on ingredients, reading and understanding the information on the product label etc. Danone organized a campaign for their brand Activia where nutritionists offered counseling in the retail markets on any topic regarding nutrition. Unilever initiated an educational program in cooperation with other food companies aimed at teaching consumers to read product labels, prevent consumption after expiry date etc. The educational programs they initiate have an impact on consumer behaviour, which may thus evolve towards a more conscious, qualityoriented food choice. Unilever for instance created and financed in cooperation with the Food Industry Federation the “Foundation for Healthy Nutrition”, which is meant to foster research in the area and raise awareness of the population through national campaigns. One of them has just started under the slogan “Healthy life starts at the table”. Yet looking at the products of the companies interviewed, there are only few communicated aspects that signal a certain orientation towards sustainability. Orkla Foods` brand products “Goodies from the Granny” are labeled allergens-, preservatives- and GMO-free. The communication of the brand stresses the home-made quality of the products, with ingredients exclusively from natural sources.
Danone has recently introduced on the market a range of products called “Casa buna” (Good House), enriched with a complex of calcium and vitamins A, D and E, especially created for the Romanian market at a most affordable price (0,14 EUR), promoted under the slogan “Health at hand”. The complex of calcium and vitamins has been chosen in accordance with scientific studies that revealed a deficit in these substances in the Romanian population. Unilever has committed to disclosing three ingredients more than the mandatory five under Romanian regulation out of transparency reasons. Next year Unilever`s self claim “My Choice” 8 will also be introduced in Romania. Under the same sign of transparency, Coca-Cola by indicates all ingredients on the label (which is not the legal standard). It chooses to practice a responsible marketing, by not advertising two liters bottles or addressing children in their commercials. In general, social and ecological aspects are rarely being used as a product marketing instrument. Companies are lacking the incentive of customers linking the socio-ecological problems to their needs and wants. Not the same thing can be said about the social and ecological activities of the company, which are communicated under the CSR umbrella. All companies enumerated various community programs, of social or environmental nature, involving schools, kindergarten, hospitals, NGOs, local administration etc. There are many initiatives of environmental education taking place in schools, which fill in a gap in the school curricula, but also in the education at home, as environmental awareness scores poorly with the average Romanian. All in all, most marketing practices here mentioned can be subsumed to corporate philanthropy and employee volunteering, thus addressing, in more or less enlightened self-interest, the community, rather than the consumer. 4.2. Pressures 4.2.1. Organizational Pressures Most interview partners found it somewhat difficulties to approach the question related to how their company sees its role in the (Romanian) society. They either stated that they follow the global mission proposed by the group, without adding any local nuances, as in the case of Unilever, Danone and Coca-Cola, or had problems formulating an answer on the spot. The Cargill Manager was not acquainted with the mother company’s sustainability policies published in the latter’s corporate citizenship report, but stressed the importance of offering a safe working environment for their employees in Romania. Cargill seems to have a decentralized structure and the interview partner lacked any detailed information on their environmental management system: “We have some, but I don’t know exactly what type.” “We take pride in the fact that Danone has always produced healthy products. This is the first thing that makes a company responsible…And of course, our desire is to offer them (n.b. healthy products) to as many people as possible on the globe” (Danone). This is a rephrasing of the official mission formulated by Danone, which is “Bringing health through food to a majority of people.” Danone as a group developed a global program called Danone Way which
“The Choices stamp is appearing on foods and drinks that meet benchmark criteria for four key nutrients: trans fats, saturated fats, sugar and sodium (salt). We're also encouraging other companies, retailers and caterers to use it. Their products that meet all four criteria can put the Choices stamp on the front of their packs.”
“is a cross-functional program aiming at long-term progress. It calls on business units to conduct a self-assessment onto practices regarding all areas of corporate responsibility. DANONE Way provides to the Group business units a basis for action plans regarding various fields: human resources policies (compensation, training for employees), quality (animation of quality policies, matching consumer expectations), purchase (management of relationship with our suppliers), environment (animation of environmental politics, focusing on packaging issue).” In the case of Unilever, the answer was: “Unilever South and Central Europe, as a regional center, cannot have but the same mission as the mother company, and that is “vitality”. Unilever`s mission, “vitality”, is what we chose to communicate, to help people feel better, look better and take what’s best from life.” On the corporate website, we find: “Unilever's mission is to add vitality to life. We meet everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life.” Unilever, Coca-Cola, Danone and Orkla Foods underwent a process of convergence towards the global sustainability standards of the mother company. A global approach is noticeable particularly with regard to the implementation of environmental standards through various certification schemes. However most companies give their foreign subsidiaries a leeway to design social and environmental activities based on local specifics, within the policies established at the headquarters, as the Coca-Cola manager explains: “The policies and commitments with general character of Coca-Cola HBC are in deed established at group level, as it can be observed in the CSR report on our internet site. In this report you can notice a diversity of approaches, within this frame, at local level. Most of the projects are elaborated and planned at country level, including the case of Romania, according to the local specifics. For example in Romania, we have a preference for programs oriented towards education, environment and charity.” Zaharul SA is owned by the sugar groups “Pfeifer & Langen” (Germany) and “Cristal Union” (France). Their shareholders didn’t impose any environmental and social policies, but financed the investments in the environmental and social area, undertaken by the locally owned company. 4.2.2. Local Institutional Pressures Market Stakeholders In one case, that of Zaharul SA, the company considered their demanding business customers to be one of the main drivers behind their involvement with environmental and social issues. Given the nature of the product they offer, sugar, 60% to 70% of their production goes to business customers, which impose very high environmental and social standards on their suppliers. They were very proud to be one of the few sugar suppliers of the pharmaceutical industry in Romania, meaning that they are able to fulfill the most exigent claims. However all companies stated that a critical customer base for products with superior ecological and social value is not yet available, and this is the reason why they are not communicating their social and ecological performances at the product level. Thus, individual customers were rather considered a non-stimulating factor, because of their price-oriented behavior and lack of environmental and social awareness. The other competitors play a neutral role, as none of them derives yet a competitive advantage from its sustainability commitment. Rather in the CSR area, (mis-)interpreted as a PR tool for
social activities, a sort of competitive environment has taken shape. Various CSR initiatives have been launched over the past years, among which an annual CSR conference, a CSR page in a major Romanian business magazine “Capital” and the CSR Awards at the “People for People Gala” (among past winners, noticeably McDonald’s and the tobacco corporation JTI for their community programs!). Non-Market Stakeholders Civil Society (CSDF, 2005) Romania lacks a strong civil society sector, a fact mentioned by all companies. The civil society in Romania is characterized by low citizen participation, a poor level of organization and limited inter-relations among civil society organizations. The most problematic aspects regard the lack of financial resources and qualified personnel. The main source of funding for Romanian non-governmental organizations (NGOs) still comes from foreign financial support, as individual charitable giving, public funds and private companies’ contributions remain limited. On the organizational level, the Romanian civil society is relatively diverse and thriving, yet is has so far not managed to develop a common identity: “Its role in society is, for the most part, ignored by the public and its public image remains marked by negative stereotypes” (CSDF, 2005, p.8). Consequently they do a rather poor job in voicing and addressing common interests and concerns of the general public. The specific structure of the Romanian economy, with a very large public sector and state owned companies, has driven NGOs to direct their efforts more towards holding the state accountable and less towards holding private companies accountable. In most cases, private companies develop and conduct their community projects in partnership with NGOs, their relationship being thus of cooperative rather than of confrontational nature. Greenpeace makes for one significant exception. Their last campaign against genetically modified soy cultures was one of the most visible and aggressive campaigns conducted in Romania. Media Though Romania has one of the most dynamic media markets in South-Eastern Europe, the mass-media coverage of socio-ecological issues is quite limited, due to lack of expertise in the area. The bird flu scandal was highly covered and other food scares came sporadically into attention, but a sense of pressure from the part of the mass-media is not being felt by the companies. Legislation The EU has been a very significant driver of the Romanian government’s recent environmental initiatives. As a candidate country, Romania has been going through the process of approximating EU environmental legislation which is a prerequisite of EU membership. However, it is widely recognized that the main problems with environmental legislation in Romania concern the implementation of, and compliance with, laws and other regulations. Enforcement alleviation, lack of incentives, insufficient technology, financial implications and obstacles to public participation are the main reasons for the actual low influence on company behaviour and performance. It is actually the companies who shape the institutional environment. Coca-Cola HBC Romania is co-founder and Unilever and Danone are members of "ECOROM Ambalaje S.A.", a recovery organization that is working on introducing the "Green Dot" packaging recovery
system in Romania. They were also active in various consultant boards and provided assistance to the government in drafting the environmental legislation. 5. Discussion This paper intended to build a conceptual framework for analyzing the extent to which multinational companies, through their subsidiaries, assume a role as sustainability agents beyond their home-country. The interviews revealed that foreign subsidiaries in Romania are confronted only to a low extent with institutional duality, as local institutional pressures are not perceived as strong enough to impose the adoption of sustainability practices. The regulatory pillar of the institutional environment lacks the instruments to enforce the existing laws. The cognitive and normative components seem to exhibit a low profile regarding sustainability issues. Consequently, foreign subsidiaries in Romania are primarily exposed to organizational pressures. It is to assume that due to the institutional profile of the country, the investigated foreign subsidiaries practice ceremonial adoption, which accounts for a relatively high level of implementation, whereas the level of internalization remains low (Kostova and Roth, 2002). A high degree of implementation of sustainability practices was visible especially with regard to environmental management systems in production and procurement policies. This is in line with the resource dependency theory, which suggests that a company’s strategy will reflect its need to acquire critical resources or improve the control over critical resources (Pfeffer, 1982). Standardization of procurement policies allows for an increased control over suppliers and answers to the need of “sustainable” companies to ensure the sustainability profile of their procurements through codes of conduct, environmental guidelines etc. On the other hand, environmental management systems monitor and improve the situation of environmental costs for energy, water, transport and waste handling. The implementation of global standards in production and procurement may thus be driven as well by potential economies of scope, indicating a behaviour in line with economic rationality (Rugman and Verbeke, 2001). Another critical driver of implementation of standardized practices in procurement and production are the coercive pressures regarding food safety and traceability exerted at the international level. Standards set by international organisations such Food and Agriculture Organization, World Trade Organization, World Health Organization, European Union (Codex Alimentarius, Good Agricultureal Practices or GAP, European food regulation etc.) flow, often more restrictive, into national regulations. These coercive pressures are complemented by normative and mimetic pressures, as voluntary standards, such as ISO 14001 or various labelling schemes, are being diffused among and developed by companies or industry associations. Numerous industry initiatives, such as the International Food Standard established by the federations of German and French food retailers, EurepGAP established by the EuroRetailer Produce Working Group in order to drive the adoption of the GAP standards in conventional agriculture, or SAI - Sustainable Agriculture Initiative founded by Danone, Unilever and Nestlé, can be considered international drivers of mimetic and normative isomorphism regarding sustainability practices, especially in procurement and production. The few marketing activities directed at promoting sustainable consumption and sustainable products take local aspects into consideration to a great extent. This may be explained by the major role played by the normative system, i.e. values and norms held by the individuals in a given country (Kostova, 1999) in marketing decisions. Demand for sustainable products is
related to customers’ awareness regarding environmental issues (Polonski et al. 1998). Though consumers’ purchase and nutritional decisions are increasingly considering environmental issues, in Eastern European countries, purchases of organic food, for example, are motivated far more by personal health reasons than by environmental concerns (Kovacs and Frühwald, 2005). However, besides the local content, visible especially in the educational area, but also in the product design, there are some product-related aspects that are implemented on a global basis, illustrated by the non-GMO policy of Orkla Foods, the labelling scheme “My Choice” of Unilever or the affordable product-policy of Danone. The few product-related sustainability practices are overcompensated by community programs. Corporate philanthropy, with both social and environmental local content, is practised extensively by the interviewed multinationals and communicated under the CSR umbrella. Figure 3 represents an attempt to classify the identified categories according to the degree of local versus standardized content of the subsumed social and environmental practices. This classification is to be interpreted as a proposition to be tested in further research. In this study, a dominance of global practices in the production and production area could be observed, with a local touch particularly regarding social issues. The marketing category proves more difficult to assess, as the data did not reveal sufficient clues to incline the balance in favor neither of local nor global content. However, by splitting the marketing activities into product- and communityrelated, we can infer a tendency towards locally designed community activities and rather standardized sustainability-related product activities. Social Practices
Global Integration/ Local Orientation
Global Integration/ Local Orientation Global Integration/ Local Orientation
Figure 3: Global Integration vs. Local Orientation of Sustainability Practices Generally, the organizational pressures felt by the subsidiaries can be assessed as being quite high. Although the social practices implemented by the subsidiaries are to a great extent adapted to the local situation, these are guided by the global principles established by the headquarters and are incorporated into the global policies of the company. The results of this study can be embedded into an extended model of dynamics of institutional duality (see figure 4). The fact that the subsidiaries adopt sustainability practices driven almost exclusively by organizational pressures, can be interpreted as an institutionalization factor in a local institutional environment, which may be thus be changed towards developing stronger
normative, mimetic and coercive pressures. Therefore, at the international level, multinational companies can act as agents of progress in transforming countries towards sustainability. At the national or subsidiary level, the concrete implementation of sustainability practices is influenced both by local institutional pressures and organizational pressures. Figure 4: Extended Model: Dynamics of Institutional Duality and Institutionalization Effects The organizational pressures reflect pressures from a multitude of institutional environments or global pressures. As illustrated in figure 4, due to global pressures, multinational companies may transfer sustainability practices from countries where sustainability is highly institutionalized to countries with lower degrees of institutionalization, thus contributing to institutional changes within the host-countries. Institutional changes in the host-country will lead to the emergence of a new institutional profile. A new institutional profile means new regulatory, cognitive and normative environments and thus new institutional pressures to be faced by the multinational company. Consequently, a higher institutionalization of sustainability practices will be reflected in stronger global pressures. Sustainability dynamics comprehend thus international as well as national components. This study attempted to apply the concept of institutional duality to the realm of sustainability practices. The sample and the methodology, referring especially to the researcher bias and subjectivity as well as the credibility of corporate views and lack of triangulation, limit the ability to generalize of our findings, which are meant to serve as a basis for subsequent research and theory development. International Level
Loc Local Institutional Environment A Local Institutional Environment A Local Institutional Environment
Foreign Subsidiary external pressure
Local Institutional Environment
Appendix Company Data: Company Danone
Parent Company Danone (France)
Production Facilities in Romania 1 Diary Plant
Coca-Cola HBC (Greece)
6 Bottling Plants
Unilever SouthCentral Europe
Orkla Foods (Norway)
Pfeifer&Langen (50%) (Germany) and Cristal Union (50%) (France)
1 Margarine Plant 1 Knorr Spices, Soups and Sauces Plant 2 Oleaginous Seed Processing, Vegetable Oil Refining and Bottling Plants 1 Canned Meat and Liver Paté Products Plant 2 Margarine, Mustard, Ketchup Plant 1 Margarine Plant 1 Jam Plant 1 Sugar Plant
Location Bucharest Bucharest, Ploiesti, Timisoara, Oradea Iasi, Floreni Targu-Mures Otopeni
Podari Craiova Craiova, Covasna, Targoviste Bucharest Iasi
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IMPACT OF THE RATIONAL TYPE FACTORS ON CLIENT SATISFACTION ON THE ROMANIAN INSURANCES MARKET Assistant Lecturer Cristina NEAGOE, PhD Romanian-American University 1B, Expoziţiei Avenue, Sector 1, Bucharest firstname.lastname@example.org
Abstract: The relational marketing theoretical framework represented an important direction in respect of drafting the present scientific study. The fundamental truth acknowledged, by many authorities that decisively contributed to building the theoretical frame within the specific field, is that the most important objective of the modern organizations is cultivating among the clients the emotional commitment. However, as it is known, insurances represent a separate sector within the financial-banking services field as they are highly complex financial products that often create confusions at the level of consumers. Further to these considerations, we can state that the factors that determine the clients to choose an insurance company can be mainly defined by rational motivations. Based on the analysis of the Romanian insurances market, we expect that the factors that are included in the construction of the rational type commitment (price, economic advantage, insurance premium, office localization advantage) have a negative effect on the churn (meaning a positive effect on the client’s satisfaction) as opposed to those extracted from the relational marketing literature. In this context, we consider to be highly useful, related to the volume of information possible to be obtained, the construction of the regression type econometric model. Keywords: rational commitment, relationship marketing, satisfaction, insurances market JEL Classification: M31 1. Introduction: The relational marketing theoretical framework represented an important direction in respect of drafting the present scientific study. The fundamental truth acknowledged, by many authorities that decisively contributed to building the theoretical frame within the specific field, is that the most important objective of the modern organizations is cultivating among the clients the emotional commitment. The distinctiveness of the insurances market, however, made necessary the testing and validating (or not) of the hypothesis according to which the successful relational market has as basis the clients’ emotional attachment (or emotional commitment). Insurances represent a separate sector within the financial-banking services field. As it features a series of particularities, they require a separate approach. In the same time, they are highly complex financial products that often create confusions at the level of consumers. Further to these considerations, we can state that the factors that determine the clients to choose an insurance company can be mainly defined by rational motivations. By accepting this supposition, the rational commitment, determined by elements such as price,
payment of damages on time, etc., can have an important role in consolidating the relations with the clients on this specific market. 2.
Theoretical aspects that underline the research
2.1. Conceptual limitations regarding the rational commitment The literature on relational marketing emphasizes two different dimensions that lead to satisfaction among the clients: the emotional commitment created through interactivity, customization, reciprocity, trust and rational commitment, created though elements such as price, economic advantage, etc. (Fullerton 2003; Morgan and Hunt 1994). These considerations set the limits of two essential dimensions of the commitment: the emotional dimension and the rational one (Hansen, Sandvik and Selnes 2003; Johnson et al. 2001). The rational commitment is defined as the connection with the organization determined by purely economic reasons and interests; which leads to a distant and calculated interaction. 2.2. Clients’ satisfaction – key variable in the relational process Consensually, satisfaction is used in order to explain fidelity and as a behaviour intention (Gustafsson A., Johnson D., Roos I., 2005, p.211), due to the existence of a positive and progressive relation between the two concept. Although there are opinions according to which consumer’s satisfaction represents the key to undertaking customer loyalty, it must be stated that by itself it cannot fulfill such a complex mission. Between the two acceptations there is a proportion as from part to whole. 3.
The insurances market in Romania
3.1. The beneficiary of the insurance In most cases, the one that benefits from the allowance is also the insured party. “The insured party is a natural or legal person, party within the insurance contract, who, based on this contract, assumes the obligation to pay an amount of money, named premium, to the insurer, and who is entitled on the occurrence of a risk, named insured risk, to receive from the insurer the compensation or insured amount, named compensation, within the agreed upon limits and terms” (http://www.euroavocatura.ro/dictionar/2504/Asigurat) Therefore all natural or legal persons that hold an insurance policy are called insured party. “In case the beneficiary is a third party, he/ she can be nominated be the insured party in the insurance contract on signing or he/ she can be assigned during contract execution through a written declaration send to the insurance company or he/ she can be assigned through a will” (Petrescu E. C., 2005, p. 30). 3.2. Dimensions of the insurances market in Romania When setting the dimensions of the insurances market in Romania, we proceeded in analyzing the volume of cashed insurance premiums.
Table 1. The dynamics of premiums collected from general and life insurances Year of The dynamics of the issued The dynamics of the issued reference premiums for general insurances premiums for life insurances Issued gross Nominal increase Issued gross Nominal increase premium (lei) compared to the premium (lei) compared to the previous year (%) previous year (%) 2.053.884.178 619.932.113 2003 2.730.518.766 32,94 746.025.160 20,34 2004 3.379.170.106 23,76 1.037.995.713 39,14 2005 4.591.002.641 35,86 1.138.281.900 9,66 2006 5.726.752.784 24,73 1.449.036.915 27,30 2007 7.068.173.520 23,42 1.868.112.985 28,92 2008 Source: 2008 Report of the Insurance control commission “The volume of insurance premiums cashed in from the insured parties indicate the real size of the insurances market at a given time” (Petrescu E. C., 2005, p. 85). Starting 2003 this indicator registered an increasing trajectory. With reference to general insurances, the nominal increase has been decreasing in the recent years and regarding the life insurances the variations have been difficult to predict. In the most recently analyzed year, the dimension of the market has a value of 8.936.286.505 lei which represents the total value of insurances cashed in from the insured parties (for life and general insurances) by the 44 operators on the Romanian insurances market. According to the results of the analysis of this indicator, at the level of year 2010, the first 10 insurance companies that develop their activity in our country are (Insurance Profile, No. 1, 2011): SC Astra SA, Allianz Țiriac Asigurări SA, Omniasig Vienna Insurance Group, GroupAma, Asirom, BCR Asigurări, ING asigurări de viață (ING life insurance), Generali Asigurări SA, Uniqua and BCR asigurări de viață (BCR life insurance). The top of the previous years has been dominated by the company Allianz Țiriac, and 2010 was the year when Astra Asigurări became leader on this segment of market. 4. Research methodology Based on the specialty literature, we expect that the factors that are included in the construction of the rational type commitment (price, economic advantage, insurance premium, office localization advantage) have a negative effect on the churn (meaning a positive effect on the client’s satisfaction). In this context, we consider to be highly useful, related to the volume of information possible to be obtained, the simple regression type econometric analysis. The variables taken into consideration in order to define the regression model are: rational commitment (independent variable), build through more rational type factors (named hereinafter – items) and satisfaction (dependent variable). The means to determine the quantitative research instruments (questionnaire) take into consideration the two variables as well as 6 and respectively 4 items from their structure. This is presented in the table below:
1. 2. 3. 4. 5. 6. 7.
Table 2 The base of the research instruments Independent variable Dependent variable ***Rational commitment *** ***Insured party’s satisfaction *** In choosing the insurer, the main criteria is 1. I am satisfied with the the price; insurance company in I do not expect high quality products from accordance with the the insurance company; expectations; I am very careful when signing the insurance 2. The insurance company policy (I repeatedly read the contract); always fulfilled its promises; It pay off, from the economic point of view, 3. In case of damages, I have to be the client of an insurance company; always been reimbursed I would suffer financially when terminating according to the promises; the relation; 4. Compared to an ideal In taking the decision of renewing the policy insurance company, I am with the insurer, the decrease of the satisfied with the one that insurance premium is the main criteria; insured me; The company’s office represents an advantage compared to other companies; Source: Own representation
4.1. Purpose and objectives of the research The purpose of the quantitative research is the analysis of the impact of the rational factors (rational commitment) on client satisfaction on the Romanian insurances market as well as of the contribution to the development of an adequate decisional support in order to draft relational marketing strategies. The objectives of the research have a causal nature and aim at obtaining some directions that can form a managerial support in order to optimize specific strategies: - Between the “rational commitment” independent variable and the “satisfaction” dependent variable there is a high intensity positive correlation;; - Determine the measure in which the rational commitment can lead to the satisfaction of the insured party; 4.2. Data collection The method for achieving the quantitative research is inquiry and the methodological design of the study lead to the use of questionnaire. The quantitative type approach allowed data collection from a significant number of subjects. The preliminary analysis of data revealed that the sample is representative at the level on analyzed population (insurances field). The period for data collection covered a period of approximately 5 months. Data collection was achieved in our country, the distribution of respondents, insured parties – legal persons clients that form the collectivity involved in running the process, being over the entire territory of Romania. 4.3. Research results Taking into consideration the specific of the insurances market, it is expected that the rational commitment have a significant impact on the insured parties’ satisfaction. Due to the less clear perception regarding the implications of this type of activity, generated by the fact that the insured parties do not know exactly what they paid for and permanently
wish that they shall not need what they bought, we admit that the rational commitment can be considered more important that the emotional one. Model : a + b*X+ Ɛ = Y X – rational commitment (independent variable, causal) Y – satisfaction (dependent variable, effect) a, b – regression coefficient
The model is valid because the simple linear regression parameters are significantly different from 0 (probably <0,05) and the Fisher test (see Annex 6, Table 7.3.47) is high enough (F=17.285). The rational commitment, the causal variable, explains in a 32,4% percentage the variation of the dependent (effect) variable. The percentage is significant while taking into consideration the trends registered by demand, which is mainly orientated to identifying some elements such as trust, quality, reputation, etc. in the organization’s offer. Table 3 Results of the regression model – the impact of rational commitment on client satisfaction Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate 1 .570a .324 .306 1.55878 a. Predictors: (Constant), q1_1. In choosing the insuring company, the main criteria is the price q1_2. I do not expect high quality products from the insurance company q1_3. I am very careful when signing the insurance policy q1_4. It pay off, from the economic point of view, to be the client of an insurance company q1_5. I would suffer financially when terminating the relation q1_6. In taking the decision of renewing the policy with the insurer, the decrease of the insurance premium is the main criteria q1_7. The company’s office represents an advantage compared to other companies The influence of each item that describes the rational commitment related to satisfaction is presented in the table below:
Table 4 The value of linear regression coefficients (X=rational commitment, Y=satisfaction) Coefficientsa Standardized Unstandardized t Sig. Coefficients Coefficients Model Std. B Beta Error
1 (Constant) * the items that describe the X 3.458 .562 6.151 independent variable* Ar1 In choosing the insuring company, the main criteria .066 .050 -.075 -1.333 is the price I do not expect high quality Ar2 products from the insurance -.069 .033 -.111 -2.075 company I am very careful when Ar3 .055 .356 6.271 .344 signing the insurance policy It pay off, from the economic point of view, to Ar4 .046 .226 3.775 .174 be the client of an insurance company I would suffer financially * Ar5 when terminating the .053 .036 .087 1.459 relation In taking the decision of renewing the policy with the Ar6 insurer, the decrease of the .071 .046 .095 1.566 insurance premium is the main criteria The company’s office represents an advantage Ar7 .040 .037 .061 1.067 compared to other companies Source: Own research supported by the use of the SPSS 19 statistical program
.000 .028 .039 .000 .000
The analysis of the regression model coefficients emphasizes that transparency is the factor with most impact on satisfaction. If the value of the item * I am very careful when signing the insurance policy * increases with 1%, the general satisfaction increases with 0,344%. In the hierarchy of criteria that lead to client satisfaction on the insurances market, the client’s economic benefit also registers with a significant percentage (coefficient value = 0,174). It is worthy of note the reverse action of the item * I do not expect high quality * on satisfaction. For the clients that confer an increased importance to low prices, quality should not hold a determinant factor in choosing a product. By analyzing the research’s results we observe that price (coefficient value = 0,066) does not have a major impact on respondents’ satisfaction variation.
5. Drawn conclusions and their managerial implications While accepting that the resulted model could be optimized by including some additional variables, we have to state that the action of those considered is significant. We consider that the items that described the “rational commitment” independent variable have covered substantially the researched issues (for example price, office location, transparency, economic advantage, etc.) and as it has been demonstrated, by result analysis, each of these is correlated with the dependent variable. In terms of cultivating satisfaction, among the clients from the insurances market in our country, the rational commitment holds an important role. We noticed that transparency holds an important impact on client satisfaction. The obtained results have a high managerial value. Based on their analysis, we consider useful the recommendation regarding the implementation of a performant management system which is specialized in managing complaints and claims (with the purpose of optimally solving the problems signaled by the insured parties). In equal measure, in the purpose of insuring transparency, we consider necessary the creation of an optimum frame for interactive and direct communication. As managing the sales forces implies significant costs, an efficient alternative could be represented by electronic communication by means of a specialized and secured chat which has the capacity to fulfill the functions of the face to face communication. We are convinced that these measures can significantly increase the clients’ perception on a transparent collaboration.
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MANAGEMENT IN THE ROMANIAN COMPANIES AND THE ISSUES THAT CALL FOR ITS MODERNIZATION Assistant Lecturer Laura-Georgeta BĂRĂGAN, PhD Romanian-American University, 1B, Expoziţiei Avenue, Sector 1, Bucharest email@example.com
Abstract: The management process in the Romanian companies is particularly empirical, traditional and technocratic. This way, the operative and postoperative feature does not give the possibility of adopting certain decisions that may contribute to the smoothening or removal of the causes of weaknesses and disfunctionalities. Talking about the management applied in the Romanian companies, one may notice that the system leaves much room for improvement, despite the fact that management as a science has greatly evolved. Therefore, in order to talk about efficient management in the Romanian companies, one must identify the information connected to the issues that the management is facing, not before creating a description of the Romanian management. Keywords: Romanian management, cultural dimension, deficiencies JEL Classification: M10 ” The organizations have to learn to be flexible, to adapt their reaction and innovating capacity to the changes that occur in the external environment in order to face the new competitivity requirements that come with the globalization process.” (Bărăgan, L.G., 2012, p.95) In the modern socio-economic context, information holds a main role, becoming the third source of power, as Albert Toffler describes. An argument of the fact that information is becoming more and more important in the modern era is the transition to knowledge-based economy, which focuses on knowledge, in all economic domains, and its impact on the performance of the organization. In order to talk about performant management in the Romanian companies, one must identify the information connected to the issues that the management is facing, not before creating a description of the Romanian management. Talking about the management applied in the Romanian companies, one may notice that the system leaves much room for improvement, despite the fact that management as a science has greatly evolved towards clarifying concepts, creating and accomplishing methodologies for designing/redesigning and maintenance for the management systems, and so on. Management continues to be the main cause for economic disfunctionalities, because it is applied especially in an empiric, traditional and technocratic manner.
Therefore, we identify the following aspects (Bărăgan, L.G., 2012, p.82): Romanian management positions itself at the intersection between traditional management and scientific, professional management; the changes are slow and derived; Very few companies have applied managerial reengineering, repeated restructurings were performed and the reorganizations and improvements targeted only one or few of the components of the management system; Insufficient use of strategic management; changes are planned at this level; The employed managerial tools are limited; For a better understanding of the Romanian management one must describe the environment these companies are operating in. Fons Trompenaars identified and emphasized certain cultural dimensions such as: universalism/particularism, collectivism/individualism, neutral/affective, specific/diffuse, position earned/received, attitude towards time and the relation of the person with nature. Considering these dimensions, describing the Romanian framework becomes (Burduș, E., 2006, p.464-466): Considering the first dimension – universalism or particularism-oriented systemRomania, compared to other countries, is particularism-oriented especially within the management processes. Therefore, the management is characterized by a medium-to-low universalism coefficient. Considering the individualism/collectivism dimension, Romanian management has a high individualism coefficient: employees express more and more frequently the need to know their exact tasks, competences, responsibilities, even if this think doesn’t happen. Analysts noted a lack of interest rising from the absence of individual responsibilities, where necessary, and the accomplishment in good conditions of the individual tasks, which are the best appreciated ones. Regarding the decisional system, the lower level managers avoid taking decisions that commit the organization, individualism being shown through a strong centralization of these competences at the higher managerial level. The affective feature of Romanians is shown both at communicational and decisional level, many decisions are influence by the decidents’ mood, and, if any, by the psychological pressure. The promotions are based also on the way that person shows off the personal accomplishments, which may have a negative impact on management. Considering the involvement in other people’s lives, the Romanian culture is diffuse, because of the unclear and various relations between persons. In the Romanian system, the position is obtained based on the individual results, therefore, the tendency is towards the earned position. At managerial level, the jobs in the Romanian organizations are obtained based on the results, and too little of the education of the applicant. Romanians understand time in a sequential manner, showing that the population is future-oriented and that the past holds little importance. Considering the relation to nature dimension, the Romanian environment shows a slightly above average coefficient regarding the tendency to control nature. The tendency to control nature showed by Romanians is well know, taking the form of aggression towards the natural environment, which led to pollution , since there aren’t any ecological criteria included in the developments strategies of the companies.
A fundamental issue of the Romanian organizations is the need for a fundamental, radical and profound change of the labor processes, and especially of the management processes, in order to increase efficiency. Well known fact, one of the most important ways to obtain and increase performance at organization level is the management. This is the reason why, the ones that run and manage the Romanian companies are concerned with finding ways to improve and change the managerial system. An additional argument in favor of obtaining managerial modernization is the accession to the European Union. One has to have to have in mind a performant management that can allow the Romanian companies to take advantage of the opportunities of the national and international environment and at the same time to meet its requirements. (Bărăgan, L.G., 2012, p.112) At present, the Romanian management is situates at the intersection between the traditional and scientific, professional management. It can be approached from two points of view (Verboncu, I., 2001): from the managerial point of view, and from the point of view of the components of the managerial system. The first approach shows the features of every role of management (Verboncu, I., Zalman, M., 2005, p. 103): 1. The forecast role: is weakly or not at all represented in the Romanian organization, because the management is mainly empiric and postoperative, not suited for the present day, which reflects in the insufficient strategies and realistic micro economical policies; the fundamental objectives are not split into derivates objectives I, derived objectives II, specific and individual objectives, which shows managerial and economic decentralization, at forecast-role level; the lack of priority setting in dealing with the decisional and operational issues the organization is facing. 2. The organization role: As far as the Romanian organizations are concerned, both at process organization and structural level, they have seriously fallen behind. 3. The coordination role represented by the actions of the managers to harmonize their decisions with the actions of the personnel under them is accomplished, in the Romanian organization, through communication, through sending informational messages on downward and up-ward flows form managers to employees and the other way around. 4. The leadership role is represented by the methods the managers use to determine their employees to participate in achieving the company’s goals by meeting the needs that motivate them. This way, the economic support of leadership is the motivation process through which rewards and punishments, material and moral-spiritual are correlated with the results of labor processes. Respecting the requirements of motivations, such as: complexity, differentiation and graduality, is facing difficulties, because, in the Romanian companies are promoted populist and collectivist wage mechanisms, generated especially by the lack of a coherent and clear objective-structured system (the fundamental objectives are split, most of the times, down to derived objectives I), but also by the fear the managers have to the reaction of certain ill-behaving employer. 5. Regarding the control - evaluation role, the Romanian companies limit themselves to the phase where the hierarchic control is oriented to the manner used to obtain results, and not on results themselves. The evaluation of the results is not based on a realistic circumstantial approach. Corrections and rectifications are made all throughout the planning process, not only in the first phase the objectives refer to. From the perspective of the managerial components, the situation in the Romanian companies in the following (Bărăgan, L.G., 2012, p.115-119):
1. Methodological subsystem, in the Romanian Companies, has the following disfunctionalities: none or insufficient knowledge of the content of modern managerial tools; the result oriented approach of the managers makes them not to fully follow the operating methodologies, the modern managerial methods and techniques, even if they know them; this way, they skip important steps or phases; the lack of synchronization between the managerial tools and the actual situations it is used in; none or insufficient training of executing personnel that participates in applying (using) the systems, methods and modern management techniques which may lead to and amplify economic performance; 2. Decisional subsystem shows the following deficiencies: the decisional processes take place in a mainly empiric manner, so, a series of information that define a certain decisional issues are overlooked and/or the decisions are taken based on manager’s intuition, experience and talent, without considering the decisional tools recommended by managerial science for each situation the manager is facing; the quality dimension of the decision are either found partially, or missing; is oriented towards the organizing and leading role, as well as to the personnel function, at higher level, this being generated by: the activities performed by the upper level managers are current, being generated by multiple pressure they are facing these days; they spend part of their time resources getting involved in solving routine issues. Thus, they are neglecting the strategic and grand issues which have a major impact on the functioning and long term efficiency of the company; the absence of realistic strategies and policies; the tendency of some managers to leave for the higher level managers to solve certain problems; 3. The informational subsystem displays the following disfunctionalities: the absence of a systemic vision in the design and functioning phase of the informational system; the volume and the structure of the information moving vertically in the management system are not correlated, this being the reason why the upper level managers obtain useless information, with low aggregation level; low management informatization level, caused by poor equipment, poor computer skills and the low attention given to this domain; not respecting all the rationalization principles because of low management processes informatization; the inexistence of certain procedures which are the base of the functioning of the informational system, at organization and its subdivisions level; display of deficiencies: filtering, which causes the beneficiary to get wrong information; distortion, displayed because of the differences in training levels of the people involved in transmitting the information or because of using unsuitable methods for managing it; redundancy: leads to a waste of time and resources; overloading of the information system with information that exceed their absorption capacity, so the managers and the execution personnel get to receive irrelevant information.
4. The organizational system has the following problems: the components of the process are insufficiently developed and they are not correlated with the components of the objectives system; certain important activities are performed with low intensity, activities such as: market studies, public relations, quality management, managerial accounting – located at the intersection between accounting and management, certain human resources-related activities; insufficient delimitation and sizing for certain structural components; lack of correlation between process organizing and structural organizing - certain organizatoric structures are not sized to fit the level required by the correspondent process components, or there aren’t any jobs or departments that would deal with certain work processes; the rigidity of the organizational structures, being generated by the promotion and usage of unitary structure standards for creating and functioning of functional and operational compartments; the most common structures are the hierarchic-functional, multi-layered ones; the departments and jobs are functionally-specialized, this leading to higher rigidity in the organizational structures; The lack of proper organizational documents – often they are not updated to take into consideration the process changes and the objectives that imply their use 5. Human resources management subsystem, in the Romanian companies, is approached from various points of view, more or less documented, or even wrong ones The human resources related activities in the Romanian companies are connected to paperwork and to the need to respect the employment law. This, a high percentage of time, around 90%, is used to make documents, and calculate wages, as required by the labor legislation. The big companies have human resource departments, which hold a strategic role within the company, performing evaluating and training activities, and the multinational companies active in Romania have human resource departments acting as agents of change. Unlike the ones mentioned above, the small companies are deficient when it comes to human resource management, some not having job descriptions charts, even though they have more than 10 employees, the work relations being very complex. Only in the companies with more than 50 employees we find a human resource manager position, but who usually deals with paperwork. Therefore, the main problems of the human resource department, in the Romanian companies, are: the lack of support from the management, communication and informing issues, preconceived ideas regarding the role and the position of the human resources managers within the company, insufficient funds, employees reluctance, thus rejecting the implementation of new tools for HR or for participative management. As far as the issues encountered in the Romanian companies, one may identify the ones connected to: employee’s performance evaluation, recruiting/selection, training/development, human resources planning, rewarding/motivation. Therefore, the following deficiencies occur: problems with wages, being seen as incorrect, unjust and insufficient; problems connected to employees performance; absenteeism (both justified and not); work conflicts (the increase of the number of the labor conflicts and of the employees involved in labor conflicts); lack of motivation.
The amateurism displayed when dealing with personnel issues, not knowing the usable tools and the benefits that could be obtained are generated by the lack of specialty studies in human resources management, as noted in the Romanian companies. The Romanian social and economic problems, together with the legislation in force, raises issued to the companies when dealing with unions, thus the strong unions limit the freedom of decision for the manager, influencing negatively the economic and financial performance of the companies. Lack of support from the upper management, as well as the upper management lack of involvement in the decision with a high impact on the human resources is the main problems the human resource managers face, in Romania, and in other countries as well. Among the elements that describe the management in the Romanian companies are (Verboncu, I., 2001): high importance given to organization and control-evaluation roles; the coordination role is performed through bilateral communication; the focus set on achieving goals and on the ways to do it; the managerial style is mainly autoritary; high level of bureaucracy; short term planning; organizational structures acting on several level, and which are static and rigid; strong managerial centralization, so, the distance to power is big; promoting managerial methods and techniques which are mainly postoperative and ; low motivation factor; keeping certain collectivistic motivational mechanisms; lack of usage of improved managerial tools; lack of knowledge and promotion of management design/redesign methodologies, and of each of its components; the focus on solving the current issues take the Romanian managers away from the knowing and application of the strategic management concepts, managerial reengineering, knowledge based management. The management process in the Romanian companies is particularly empirical, traditional and technocratic. This way, the operative and postoperative feature do not give the possibility of adopting certain decisions that may contribute to the smoothening or removal of the causes of weaknesses and disfunctionalities, the managerial interventions are only effect-oriented, focused closely on amplifying the positive ones and diminishing the negative ones.
Bibliography: . Bărăgan, Laura-Georgeta, ”Reengineeringul managerial în context european”, Editura Printech, București, 2012;; . Burduș, Eugen, ”Management comparat internațional”, ediția a 3-a, Editura Economică, București, 2006;; . Verboncu, Ion, „Manageri şi management”, Editura Economică, Bucureşti, 2001; . Verboncu, Ion; Zalman, Michael, ”Management și performanțe”, Editura Universitară, București, 2005
THE BUYING BEHAVIOR OF ORGANIZATIONS Lecturer Andreea BUDACIA, PhD
Romanian American University 1B, Ezpoziției Avenue, Sector 1, Bucharest
firstname.lastname@example.org Lecturer Marian Florin BUSUIOC, PhD
Romanian American University 1B, Ezpoziției Avenue, Sector 1, Bucharest
Abstract: The nature of industrial products, their value, the heterogeneity of industrial clients, have a great impact on the buying act. Under the impact of all the systems that give particularities to the demand, the offer, the products’ nature or to the participants of market transactions, the buying process in the industrial field has a particular structure. The behavior of the organizational consumer is influenced by a series of factors, which have a major impact on the purchase decisions. Specialists in the field have identified four groups of factors: environment factors, organizational factors, interpersonal factors, personal factors. Also, it is very important to say that the particularities of the industrial marketing mix have a major impact on the behavior of the organizational consumer. Key words: industrial marketing, the buying process, the organizational consumer JEL Classification: M21, M31 1. Particularities of industrial marketing The market of productive utility goods and other associated goods is different from the market of individual consumption goods, especially because of the way in which the demand and offer are manifested and the manner in which exchange acts are realized. Such particularities have determined the delimitation, within the marketing practices and concept, of a distinct domain – industrial marketing – which contains the marketing research and policy promoted in enterprises that produce goods and services meant for productive consumption. The nature of industrial products, their value, the heterogeneity of industrial clients, have a great impact on the buying act, giving the entire system of relations which intervene among partners its particularities and implicitly to the buying behavior. The most relevant marketing policies, among the main differentiation elements, in comparison with the marketing of wide consumption goods, are the following: industrial buyers are specialized professionals with high qualification, generally knowing very well the products, they are well informed regarding everything that is proposed by the competition in the respective field and they are capable of making a choice out of the possible alternatives, on the basis of certain pre-established norms, with consequences in the sale domain;
the buying decision is made starting from an objective study of the offers, depending on the price, the price – quality report, the contributions and facilities offered in the use process, the maintenance costs, the payment conditions, the given service, the profitability; the necessity, in some cases, of the writing of an agreement previous to the actual negotiations concerning a series of important demands, especially when they involve unique items – equipment goods, goods with special technical parameters, etc; important goods are the subject of certain long term negotiations, in some situations, in order to have a balance of the partners’ economic interests and which take the form of detailed contractual clauses.
2. The buying process of industrial products Under the impact of all the systems that give particularities to the demand, the offer, the products’ nature or to the participants of market transactions, the buying process in the industrial field has the following structure: ~ appearance, identification and recognition of a certain need; ~ defining the characteristics of the products that will be purchased in order to satisfy the identified needs; ~ the research of the technological parametres, prices, use conditions, maintenance costs, general costs, etc. and the objective comparison of different suppliers that can answer the enterprise’s requests;; ~ making the offer demand – a phase which is typical of the buying process in the industrial field; ~ analysing different offers and negotiating with suppliers whose propositions were taken into consideration when they sent an offer; ~ choosing the supplier in order to negotiate and put down the delivery contracts; ~ evaluating the performances of the chosen product or equipment, depending on the positive or negative answer given to the need which generated the purchase act; ~ testing the product, analysing and interpreting the results, taking into account the entire structure of the actions that launched the buying process, according to the previously presented asignments. In the following tabel, the phases of the buying process in the industrial field are presented. Appearance, identification and recognition of a certain need ↓ Defining the characteristics of the products that will be bought ↓ Objective comparison of the offers made by different suppliers ↓ Sending the offer demand ↓ Analysing different offers and negotiating with the suppliers ↓ Choosing the supplier ↓ Evaluating the product’s or equipment’s performances ↓ Testing the product, analysing and interpreting the results
3. Factors which influence the behavior of the organizational consumer The behavior of the organizational consumer is influenced by a series of factors, which have a major impact on the purchase decisions. Specialists in the field have identified four groups of factors: environment factors, organizational factors, interpersonal factors, personal factors. ■ Environment factors Among these factors we encounter elements of an economical, political and technological nature, but also competition or laws which influence the buying decisions of organizations. For instance, in the case of economical factors, the consumption costs, the production or investment volume can play an important role. The general economical climate can stimulate the buying process or, on the contrary, it can determine a distant attitude in the market. ■ Organizational factors The success of marketing activities on the business market depends on how well are known the organizations, their structure, policy or purchase system. A company with a centralized system needs a different approach in comparison with another one which has delegated certain buying decisions to regional devisions or units. The attempt to sell to a division its own product can be a waste of effort if the buying decision is typical of the mother company. ■ Interpersonal factors Making an acquisition can be hard if the approval is necessary and each person has his/her own interests. Generally, from organizational buyers is expected that they always act in the company’s interest and not in their personal interest. However, often immoral practices appear, such as bribery or extremely expensive gifts, which leads to deontological problems for marketers. More often than not, the buyers have the tendency to avoid sales agents who don’t have an ethical behavior. ■ Personal factors Each participant in the buying process has motivations, perception and personal preferences, which are determined by age, income, education, professional training, culture and attitude towards risk. Each buyer has a different purchase style. That’s why adapting to the business style of the host country is highly recommended for the marketer’s success. In the international business environment, cultural influences are of great importance because culture establishes the values of a society. In the following table we briefly present the main factors which influence the buying behavior of the organizational consumer 9. Factors which influence the buying behavior of the organizational consumer Environment factors
- the level of the demand - economic climate - the interest rate - the rhythm of technological innovation - legislation - competition - social responsability aspects
- purpose, objectives, mission and vision - policies - procedures - the structure of the organization - management systems
- personal and group interests - decisional authority - the status within the organization - empathy - persuasion
- age - income - education - the position within the organization - personality - attitude towards risk
Ph. Kotler, Managementul marketingului (traducere), Ed. Teora, Bucureşti, 2000.
4. Aspects regarding the marketing mix The particularities of the industrial marketing mix have a major impact on the behavior of the organizational consumer. Concerning the product, through their policies, the enterprises should capitalize on a series of actions, sustained by technological innovation, on providing a well coordinated service which should ensure the products’ instalment, on training the users regarding the exploitation of certain tools and their maintenance, on rationalising the exploitation costs and so on. In terms of price policies, marketing is particularised by the fact that, through the action in a well structured and competitive market, the price position of the enterprise that makes the offer plays, more often than not, an important role in ensuring a certain position on the market for the respective enterprise. In order to establish prices, the enterprise which makes the offer should make a pertinent analysis of the costs and profitability, from its potential buyers’ perspective and not just depending on its own costs. The price policy is adapted, in many cases, to the demand offer made by different important buyers from the industrial market. Regarding the distribution policy, we emphasize the fact that the major particularities refer to: the relatively high frequency of the direct sale methods, the great importance of the sale forces, the wide variety of tasks given to the personnel of the sales department. The communication policy gives the industrial marketing its particularities through the following elements: the advertising objectives are generally modest and refer to the increase of the enterprise’s fame or of its products, as well as to the enterprise’s overall image, which should be favorable; the communications budgets are smaller in comparison with those of the enterprises which create products for the general public; within promotional actions, institutional publicity is preferred instead of the product publicity; in structuring the available communications media, the balance leans more towards “relational media” – public relations, expositions, conferences, forums, sale forces, etc. – than towards impersonal media, such as advertising; publicity media, if they are used, represent specialised media – technical or economic magazines, professional publications, management publications; regarding the content of the messages, the most important element is the technical and economic argumentation. 5. Conclusions Determining the reasons and attitudes of the organizational buyers is of major importance for establishing an appropriate production and sale policy, but also for the promotional argumentation, in order to give the proper attention to the created products which are sent on the market. The industrial buyer is represented by a group that has a certain economic vocation, unified in order to achieve a well established goal. Each member has his/her own personality and this is why it’s important to know the aspects which compose the respective personality, in order to understand and adopt an appropriate marketing policy. At the same time, it is necessary to decide whether the respective personality, in its different forms, can be synthetised in a few major segments or attitude types frequently encountered within human groups. Regarding the tendencies of the general behavior of industrial buyers, we notice:
a conservative tendency – in the case of establishing favorable business relations, there is the tendency to maintain them in the long run and, therefore, it is difficult for others who have offers to conquer that client or that market segment; an innovative tendency – this refers to the need to use products and services which facilitate the buyer’s activity, on the one hand, or allow obtaining other products and better services in short time, on the other hand; a moderate tendency – manifested in the fact that the object which will be acquired is bought for objective reasons, which impose a complete analysis of its characteristics and a bigger period of time in order to make a decision. There is a series of elements which compose acquisition habits and the most relevant are: the preference for direct purchase; purchase has an irregular frequency; the users’ tendency to buy, except for the main item, other similar goods – the so-called multiple purchase; the existence of a certain reciprocity in sale-purchase relations or, in other words, the tendency to sell to the person from whom you buy certain products of your own; the actual purchase is preceded by a relatively long period of negotiations; the purchase act is, usually, based on the analysis of certain catalogues or other documentation.
Bibliography: . J. Aitchinson, Inovaţie în marketing, Editura Brandbuiders Grup, Bucureşti, 2006 . L. D. Anghel; E. C. Petrescu: Business to business Marketing, Ed. Uranus, Bucureşti, 2001. . V. Balaure (coordonator), Marketing, ed a-II-a revăzută şi adăugită, Ed. Uranus, Bucureşti, 2002 . O.C.Ferrel, D.M. Hartline, Marketing strategy, 4th Edition, Thomson SouthWestern Publishing House, 2008. . Ph. Kotler, Managementul Marketingului (traducere), Ed. Teora, Bucureşti, 2000
INTERNAL COMMUNICATION - A PREREQUISITE FOR ORGANIZATIONAL EFFECTIVENESS Associate Professor Nicoleta Rossela DUMITRU, PhD Romanian American University 1B, Ezpoziției Avenue, Sector 1, Bucharest email@example.com
Assistant Lecturer Ivona STOICA, PhD
Romanian American University 1B, Ezpoziției Avenue, Sector 1, Bucharest firstname.lastname@example.org
Abstract: In internal communication, management communication is crucial for success of the company, responsible manager not communicating at random and at will, but as a communication strategy to support the organization's strategy implementation, creating a climate of communication depends on productivity and capacity adaptation of the institution, so its success. Effective managerial communication effect on the character and morale of subordinates is obviously where every employee believes that their success is a significant contribution. Attitudes and motivations of people working in an institution, based on the need for them to feel involved, informed and ready to participate in decisions that affect them. Keywords: internal communication.
JEL Classification: M31 1. Conceptual communication Communication is indispensable for the smooth functioning of any human community irrespective of size and nature. Perpetual exchange of messages generating unit views and action, unifying the knowledge of the aims, ways and means to achieve them, the relative homogeneity of the groups in terms affective (emotional feelings) and motivation (opinions, attitudes). Given the various definitions and interpretations of the communication data by various specialists, concluded that public communication is not just sending messages, information without the involvement of participants in the process. Unless other interlocutors listen carefully interventions and mutually agree, we can say that this community. In this complex and ongoing communication, both managers and subordinates have to "to discover and converse, disagree and agree, to reject or accept, in major issues and current ones" of the institution. This is organizational communication. Management communication is a form of interpersonal communication, management tool with which the manager may exercise specific responsibilities: forecasting, training,
organization, coordination, control, evaluation. Being part of the leadership that understands its subordinate manager making it understandable to them, management communication is directed not only to sending messages, but also to change their mentality and psychological adaptation to business objectives. Managerial Communication is a subsidiary of leadership that circulates information about the outcome of decisions, returning to the center of decision making it possible to agree to the implementation of the objectives and the results of planning. The importance of communication in organizations is due to the complex nature that this process is at this level. Thus, in any organizational setting numerous communications networks, namely communication channels found in specific configurations that make up the communications system. Particularly its role in ensuring the functionality and effectiveness of the activities in an organization is generated mainly by: - The volume, complexity and considerable diversity of existing targets in the subsystems of an organization, due to the impact of national environment variables, as well as of international - Profound changes that occur with the evolution of social and economic legislation in each term, and have a particularly strong impact in each organization in its dimensional and functional characteristics: for example, groups and how their design and operation, the also communications play an important role in decision-making framework, to enhance the links between components groups to strengthen their cohesion; - Members of a work organization leadership positions. Managers fulfill three roles: interpersonal, informational and decisional. Of these, informational roles of monitor, speaker and spokesperson, are those that define communication and information flow can be identified in other roles. According to the hierarchical level that a person occupies, communication can mean up to 80% of the time it consumes. In conclusion, communication means almost everything in an organization, as long as the quality of communication depends on understanding the problems faced by every employee, from manager to employee on the lowest hierarchical level, sustainable relationships between them, the capacity manager to motivate and to lead subordinates, and relationships with the external environment in which the institution is taken very useful information for its proper functioning. 2. Types of internal communication The great diversity of forms of communication developed within organizations requires their inclusion in certain classifications, using several criteria. a) Depending on the direction, communication can be: downward, upward horizontal diagonal. Downward communication is down usually hierarchical relationships, being carried up from the top management to executive levels. Its content is given by the decisions, regulations, instructions, forwarding documents, requests for information. The main problem of this type of communication is the high probability that the message is filtered as it is pumped from one level to another, as each level can interpret messages according to their needs or objectives. Upward communication is the transmission of messages upward by subordinate chiefs direct and successively higher levels of management. By convey those reports,
requests, opinions, complaints. The role of upward communication is essential for effective communication process, as show messages sent by manager’s reception. Also, through its senior management shall inform the morale of staff on communication barriers, level and form most commonly recorded offenses. Horizontal or lateral communication is established between individuals or departments located at the same hierarchical level. The role of this type is to facilitate the coordination of activities aimed at common objectives, excluding the intervention of senior managers. Diagonal communication is practiced in situations where members of the organization cannot communicate through other channels. For example, the use of project management, communications frequently occur in diagonals between the project team and the rest of the compartment structure. b) When the mode of transmission, communication can be: written, verbal, non-verbal. Written communication is used in high proportion in organizations for requesting or sending internal memos, reports, decisions and plans, letters addressed to persons inside or outside the organization. Beyond where written communication is essential in practice there is the so-called "myth of paper". Studies in this regard show that about 75% of documents circulating in an organization are addressed to a single person, 10% is for two people and only 6% are destined to three or more persons. Although not very nice - few managers who like to write or read reports - written communication is inevitable. The major problems faced are those of clarity, conciseness, accuracy which addressed properly, can turn into advantages of this type of communication. Verbal communication is the most frequently used within the organization. Experts say that 70% of internal communication is done verbally. In general, verbal communication includes accounts of situations, facts, occurrences of existence, feelings and reactions to certain situations the central, opinions about us, others, society and culture., Opinions, attitudes expressing an individual's position in a specific situation subjectively. Verbal communication manager not only requires the ability to emit signals, but also that of listening. Practice shows that listening is marked by a number of shortcomings. Experts say that only 28% of adults listen to what they say. As it concerns managers considered that if they were to increase listening ability to execute the same task with the same results, time consumption could decrease by up to 30%. In carrying out management relations, verbal communication has a number of advantages: direct relationships customized between managers and performers, giving employees a sense of participation in organizational life and care; -speech flexibility, allowing adaptation at the level of message reception by tracking responses of participants in the discussion; high speed transmitter and receiver.
Studies show that the relative speed of intellectual activities compared to speech is understanding 3-4 times faster, twice as fast reading, while writing consumes 4-5 times longer; - Information can be more emphasize and persuasive; -allows rapid recovery situations and immediate action in case of emergency; -costs are reduced by 50% compared to those of written communication. The disadvantage of this type of communication regards the fact: Requires the simultaneous presence of interlocutors, multiplying the time spent; -successive transmission through different hierarchical levels is difficult and of great informational material losses. Thus, the practice shows that, on average, downward communication protocols issued by the Board fully reach executives in 63% to 55% of heads of departments at the Head of division 40% to 30% foremen and the workers only 20%. Regarding upward communication protocols, losses are even greater. Thus, the content of messages transmitted orally workers; only 10% reach the Board. Non-verbal communication can be an effective tool, handled skillfully, facilitates issue and deciphering messages. The characteristic of this type of communication is its competition with verbal communication, which allows the transmission of messages even while discussing partners. Almost 90% of a message is transmitted by non-verbal. Gestures, facial expressions, posture represents stimuli that can be successfully used to increase the effectiveness of interpersonal communication. From all those types of non-verbal communication we can remember the facial expression. Due to increased socialization, people have learned to hide their moods, controlling remarkably expressions. Thus, we can speak about a public face, which people approach work, in business, in society in general and a particular face, which occurs when they want to relax or when alone. c) Upon the official degree, communication can be formal and informal. Formal communication includes all messages upward and downward moving channels organizational relationships. It can present in different forms: spoken, written, directly and indirectly bilateral and multilateral. Whatever form is used, the communication remains a need to regulate the functioning of organizations. Informal communication includes rumors and gossip. Due to lack of information or information that may appear truncated in the process of interpersonal networking, informal communication seeks to eliminate uncertainty, curiosity and anxiety of people. In the communication process communication barriers may arise following: A) At the transmitter and the receiver: The emotional state of the receiver; routine influencing responsiveness, self-image transmitter and receiver and the other party's image, different characterization of the situation by sending and receiving communication, lack of attention in receiving the
message, the message hasty conclusions, lack of interest to the message receiver, feelings and intentions of the participants in the communication situation. B) At the level of language: The same words give different meanings for different people, especially because of differences in terms of training and experience, difficulty in speech, expressing the awkwardness of the message by the sender, using words or phrases confusing. C) In the context: Inadequate physical context (high noise); Inadequate information support. Diversity causes of difficulties and disturbances related to the process of communication makes the existence within that system adjustment possibilities, adaptation and transformation. The core of this adjustment is the feedback, which allows the receiver (citizen) to give feedback and transmitter (public official spokesman of the institution, and so on) to register. Communicator's ability to respond adequately feed-back is crucial to the effectiveness of communication. Feed-back functions are: Understanding control function (message reception in good condition); Adapting the message function characteristics of participants (to the difficulties or other events that require a change in content or form); The function of social control through flexible roles and functions performed by various characters involved in communication, able to facilitate understanding of the other's point of view; Socio-emotional function (feed-back increase internal security and satisfaction actors). 3. Aspects of internal communication within organizations Following a study conducted at 5 small businesses, based in Bucharest, with more than 20 employees, the survey was conducted online by distributing a questionnaire with 23 questions (19 questions and 4 to identify content on the principle funnel), it was next research report presented in summary. In general, communication environment is favorable, and level of achievement of communication, medium-high, which emphasizes the increased importance of communication in organizational activity. The situation, however, varies from one department to another. In some, the trend of democratic communication: line managers often send messages motivation / action style resort and dynamic, egalitarian, focuses not only on information communication function, but also on the behavioral / persuasive, involving employees the discussion / decision making communicative activity is ethical, moral. In others, communication is authoritarianbureaucratic, manipulative, they monopolize the discussion, it underestimates the role of nonverbal communication and feedback etc. Regarding horizontal communication within departments, the majority of respondents identified as the main element colleagues communicating. Horizontal communication elements identified here, which underlie good working relationships and a pleasant climate in the organization.
Verbal form of communication is most prevalent in the company departments and the role of nonverbal communication in the work of each employee was determined to be important at a rate of 60.9%. On persuasion management in some departments / sections Managers / Heads influence / change attitudes and behavior through persuasion, in order to achieve the targets, to achieve better results at the organization level, they argue, demonstrates counters and neutralizes objections, using different methods, have ethical behavior in tense situations, meet adverse opinions. In others, the counters and employees are involved in decision making etc. Were revealed some reasons / circumstances / factors which deficiencies in communication within the organization. Regarding the interpersonal / in-house process of communication, descending was found that not all managers / leaders correctly perceived notion “to communicate ", which involves the ability to be a good communicator and not effectively practice internal communication functions. Stimulation and improvement of persuasive communication process involving conducting extensive action in several areas: improving organizational communication environment, improve the activity of vertical and horizontal communication, effective business communication within the company and its departments. Improving the environment involves organizational communication: persuasive motivating organizational and interpersonal communication, persuasive communication providing clear, accurate and concise, development feedback, effective organizational and managerial persuasion process. To improve persuasive communication activity is recommended for managers: giving work to restructure the stereotypes / outdated mentality and adopting effective management strategies and persuasive communication, limiting communication standard, authoritative and developing relational communication behavior, democratic, to show availability and openness to communication and persuasion, to become the source of a sound moral and ethical, to continuously self-perfecting, assimilating new knowledge theory and practice of persuasive communication, knowing and applying different methods, techniques, tactics with positive influence, adapting methods and techniques effective institution-specific conditions using ethical methods of argumentation, demonstration, counter-argument, and so on; To improve the efficiency of internal communication, ascending and descending, the company is considered appropriate: simplifying language, use informal communication channels, and careful monitoring of communication and active listening. Some ways to lower efficiency of internal communication note: empathy, fostering mutual trust, effective planning time and increased use of communication feedbak community. Bibliography: . Abric J.C., Psihologia comunicării, Editura Polirom, Iaşi, 2002 . Chiru I., Comunicare interpersonală, Editura Tritonic, Bucureşti, 2003 . Gâdea R., Gâdea D., Comunicarea organizaţională aplicată, Editura Expert, Bucureşti, 1998 . Marinescu P., Managementul instituţiilor publice, suport de curs, Universitatea Bucureşti, 2003 . Niculae T., Gherghiţă I., Gherghiţă D., Comunicarea organizaţională şi managementul situaţiilor de criză, Editura Ministerului Administraţiei şi Internelor, Bucureşti, 2006
THE ROLE OF STRATEGY IN THE NEW ORGANIZATIONAL CONTEXT Assistant Lecturer Anca CRUCERU, PhD Romanian-American University 1B, Expoziţiei Avenue, Sector 1, Bucharest
email@example.com Abstract: The strategy has been and shall remain an efficient means to adapt and to respond to the changes generated by the external and internal environment of an organization. Therefore, in the new organizational context, the role of strategy has been accentuated, mainly due to its importance both at a micro-economic level, but also at a macro-economic level, thus generating effects on both plans, and determining, at its turn, even new changes. Keywords: strategy, characteristics, role, components, organizational context JEL Classification: D80, M10, M20 The changes in the XXI-st century generated the appearance of knowledge based economy and society, but also the appearance if the new organizational context (the organization and implicitly, the knowledge based management). In this context, the strategy can be used both to adapt the organization to the external changes, but also to the internal changes. In order to highlight the role of strategy in the new organizational context, the concept of strategy, characteristics, and also its components, has to be defined. Therefore, the concept of strategy has been used since the oldest times (early Greek antiquity – “strategos” – the general’s mission (his tasks and responsibilities), thus having a history that can be found throughout several millennia. Throughout time, strategy represented: an art (the means in which the general uses his skills and knowledge to lead an army); a managerial characteristic (attribute) that an army commander should have; a skill necessary to a general, which helps him organize his forces in order to overpower the enemy and also in order to establish a homogenous total system of government;; etc… The term of strategy has spread only in the XX-th century in the world of business and science of management, and “the strategy issues of economic organizations preoccupied a series of important personalities from the management field, the most representative ones being: Harry Igor Ansof, Alfred D. Chandler, Kenichi Ohmae and Michael E. Porter” (Ciocîrlan, 2009, pp.11). Further to studying a series of 1495 papers that were dedicated to the concept of strategy, Mr. Henry Mintzberg has established ten schools of managerial approach, namely related to the below listed ones: designing, planning, positioning, entreprenorial, cognitive, learning, political, cultural, environmental, and configurative (Nicolescu, 1998, pp. 34). Hence, starting from the premises and contributions of each school, the specialists approached differently the concept of strategy. The most representative approaches regarding the notion of strategy are as follows: Mintzberg Henry (Naneș, 2003, pp. 79) considers strategy as: - a perception –which
signals an anticipated evolution in solving a situation; - a sketch/ a project – that implies a tactic that guarantees the outrun of a competitor or oppose; - a model – that determines an organization of valuable actions at behaviour level; - a company positioning – that consists in the means to establish the position of an organization on the market; - a perspective – that includes both determining a position and also observing the real facts from the environment where it runs its activity, the latter being projected on the organization’s actions with reference to the market, technology, etc… Zorlenţan Tiberiu (1998, pp. 258) – considers that “strategy represents the science and the art of establishing the organization’s medium and long term general objectives and of devising action opportunities in order to achieve these objectives, taking into consideration all the existing resources, in view of efficiently adapting the organization to the requests of the environment where the organization operates”;; Chandler Alfred (Burduş, 2005, pp. 619) defines strategy as setting the organization’s long term purposes and objectives, the resources and means of achieving them; Ciocîrlan Doinița (2009, pp. 9) – “strategy represents a coherent assembly of objectives and actual activities for their achieving, the result of an extensive and thoughtful process of scientific analysis of the internal and external environment, with the purpose of ensuring the performance and competitiveness of an economical type structuralorganizational entity”;; Porter Michael (Nicolescu, Verboncu, 2007, pp. 141) states that strategy (“generic strategy”) represents those essential specifications regarding the means through which the organization can gain the desired competitive advantage, that offers each functional field, the situation for developing the necessary actions; Nicolescu Ovidiu (1998, pp.37) – strategy implies “the assembly of the organization’s major long time objectives, the main means of achievement, together with the allotted resources, in view of obtaining the desired competitive advantage suitable with the organization’s goal. It is my opinion that strategy represents the sum of decisions adopted by the superior level management with reference to setting of medium and long term objectives, to the means of achieving these objectives and to setting the basis for the need of resources, while taking into consideration the opportunities and threats from the external environment and also the internal potential of the organization, with the purpose of profitably fulfilling the goal. From the above presented definitions, there can be drawn out the following characteristics of strategy, characteristics that have been presented and analyzed by other specialists from the field (Nicolescu Ovidiu, Verboncu Ion, Dalotă Marius – Dan, Naneș Marcela): by strategy, it is desired that well defined targets be fulfilled, targets that can be found in goal and objectives; strategy refers to the future of the organization, usually targeting a period of 3-5 years; strategy has as sphere of comprehension both the entire organization as well as important parts of it; the basis of a strategy is limited to the essential elements that support the survival and the development of the organization; by strategy, it is sought to “achieve the effect of synergy, that consists in obtaining a integrative quality superior to the mathematical sum of the qualities of the component elements; it has a standardized character; it materializes as strategic plans and programs; it ensures an interface with the environment, the organization is approached in tight
interdependence with the environment where it exists and operates; the main purpose of strategy is obtaining an competitive advantage; by strategy, it is sought to foreshadow the organization’s long term competitive behaviour; strategy is the result of the explicit or implicit negotiations of the different categories of stakeholders“ (Naneș, 2003, pp. 83-84); strategy is based on the principle of equi-finality, which states that an objective can be fulfilled by more means and possible combinations of actions and resources; in substantiating, designing and implementing strategy, there is achieved an intensive process of organizational learning.
By analyzing the definitions and characteristics of strategy, we can determine the importance, role and complexity of this term. Thus, the role of organizational strategies (he advantages of implementing strategies) is observed both at the level of macro-economy as well as at the micro-economic level. At macro-economic level: - “by resorting to strategies, the organizations influence their fortification, the increase of obtained performances; and therefore, their contribution to the state budget shall be net superior; - a second advantage of proliferating organization strategies resides in encouraging the development of an economic activity, at territorial and national level; - a third one – and, from national point of view, the most important – is the increase of performances, in general, of the national economy, reflected in the volume and dynamics of the national gross product, the national income and the other macro-economic indicators” (Nicolescu, 1998, pp. 78; Nicolescu, Verboncu, 2007, pp.177). At micro-economic level (organization level): - the strategy favors the organization’s stakeholders because it includes their interests, aspect that denotes a higher interest for developing the organization’s activities;; - strategy outlines the organization’s evolution over a long period of time, thus allowing the orientation of the employees’ efforts towards fulfilling the objectives set in accordance with its goal; - strategy allows the decrease of the risks associated with any economic activity; - strategy represents a main element for setting, choosing and implementing the tactical and current decisions; - strategy favors the creation and enhancement of a competitive organizational culture due to the fact that it anticipates the organization’s competitive behavior; - strategy allows the adaptation to the external environment conditions, by efficiently embedding the organization’s performances in the dynamic environment in which it develops its activity; - strategy sustains the creation, maintaining and increase of the organization’s competitive behavior.
In order to understand the complexity of the concept of strategy, its component parts are presented hereinafter. In my opinion, as well as according to other Romanian specialists (Nicolescu Ovidiu, Verboncu Ion, Burduș Eugen, Zorlențan Tiberiu, Naneș Marcela, Istocescu Amedeo, Dalotă Marius – Dan, Ciocîrlan Doinița) in the field of management, the component parts of strategy are: 1. The organization’s goal: “represents the notion of superior management with reference to the profile, the object of activity, the identity and major direction in which the organization is going to evolve on long term and whose definition implies stating: the products and services that the organization intends to achieve, as well as the market it serves or shall serve and, implicitly, the groups of clients and their specific needs that the organization intends to satisfy” (Naneș, 2003, pp.83). 2. The fundamental objectives – targets the organization’s activity, in general, on a medium or long term (3-5 years) and states the quantitative and/ or qualitative description of the organization’s goal (the organization’s purpose on the market). 3. Strategic options – illustrate those means through which the organization can fulfill its fundamental (strategic) objectives and, implicitly, the organization’s goal. Among the strategic options (strategic means/ approaches) that an organization can apply, we can specify the following: “re-technologizing, redesigning the management system, diversifying the production, assimilating new products, entering new markets, building joint ventures with a foreign partner, specializing in the production field, converting and reconverting the organization, combining the production, updating the organization, computerizing the activities, etc.” (Nicolescu, 1998, pp. 46-47; Nicolescu, Verboncu, 2007, pp.151) 4. Resources – are compulsory for fulfilling the fundamental objectives and the strategic options. Any strategy has to contain financial resources, human resources, technical-material resources, informational resources and knowledge resources. 5. Deadlines – set the period of time in which the strategy is going to be implemented, indicating the date of initiating the strategy, the intermediary milestone and the strategy’s end date. 6. Competitive advantage – assumes the possibility that an organization obtains products or services that satisfy the consumers’ requirements at a level superior to similar products and services of competitor organizations. Therefore, in order to successfully elaborate a strategy it is necessary to not forget any of its component parts and also, to achieve a thorough preliminary setting of a foundation. In conclusion, through the roles it fulfills, strategy allows, on one hand, the organization’s adaptation to an environment in continuous change, and on the other hand, in the context of new world trends, it develops the concept of knowledge based strategy that generates a knowledge based managerial strategic process.
Bibliography: . Burduş, E., 2005. Tratat de management, Editura Economică, Bucharest, ISBN 973 -709-117-5 . Ciocîrlan, D., 2009. Management strategic, Editura Universitară, Bucharest, ISBN 978-973-749-632-4 . Dalotă, M.D., 2008. Managementul strategic al firmei. Fundamente teoretice, studii de caz, teste grilă, Ediţia a II-a revizuită, Editura ProUniversitaria,Bucharest, ISBN 978-973-129-321-9 . Naneş, M., 2003. Management strategic. Concepte, metodologie, studii de caz, Editura Sylvi, Bucharest, ISBN 973-628-020-9 . Nicolescu, O. (coordonator), 1998. Strategii manageriale de firmă, Editura Economică,Bucharest, ISBN 973-9198-26-0 . Nicolescu, O., , Verboncu I., 2007. Managementul organizaţiei, Editura Economică, Bucharest, ISBN 978-973-709-343-1 . Zorlenţan, T., Burduş, E., Căprărescu, Gh., 1998. Managementul organizaţiei, Editura Economică, Bucharest, ISBN 973-590-070-x
MODERN MANAGEMENT TOOLS ADAPTABLE WITHIN BOUNDARY CRISIS OF THE PUBLIC SECTOR Associate Professor Florinel COSERIN, PhD Universitatea Liberă Internațională Moldova, Chișinău
Ioana Daniela COȘERIN, PhD Candidate Universitatea Liberă Internațională Moldova, Chișinău
Victor COȘERIN, PhD Candidate Universitatea Liberă Internațională Moldova, Chișinău
Abstract: Modern management tools adaptable within boundary crisis of the public should be the starting point in developing organizational strategy. We are also claiming for the necessary feedback data during the integration of each tool in the institution managerial area. When experience between various departments of the organization prevents duplication of activities or failure of others, helping to avoid operational and administrative losses is a strategic must. Internal communication mechanisms should be monitored and continuously improved in order to cope with the dynamic requirements of the organization. Hence, management should be involved in achieving this objective and to oversee that it is understood to be shared by all organizational links. Accordingly, it must be taken into consideration the level of integration of modern management tools at all levels. Within boundary crisis of the public sector, the local public administration institutions involved, above all, must oversee the optimization of financial resources, human, material available in order to achieve the annual targets and improve currently. Keywords: modern management tools, boundary crisis, public sector, managerial accuracy, distinguishing features JEL Clasification: H54, H83, Z18. 1. INTRODUCTION The starting point in developing organizational strategy must be the relationship between management, stakeholders and context. This is one of the distinguishing features of systems management of institutions in different areas of the world but rooted in cultural
differences between countries, and the attitude of management towards of primary concern of government that must constitute the internal management of public services. In the current context, the need for modern management tools is not just imperative, but is like a sine qua non condition for reinsuring the optimal pattern of managing sectorial issues. In order to perform, modern management tools need to be promoted, public decision factors needing to ensure the support in a proper manner, including redirecting resources towards a new public reform in these new crisis contextual guidelines. Hence, managerial accuracy is must, by transcending from layoffs to public incentives granting. Taking into account the fundamental element that in the public area, the modern management tools became indispensable, we are underlining the need for prioritizing the strategies in accordance with the parameters relating to their importance and the efficient allocation of necessary funds, that tends to be a priority axis in the optimizing of public work processes, outlining in this way the levels of partial implementation of modern tooling and levels of global overdue for public factors introduced into the automatic system as vital engines. 2. PERFORMANCE MANAGEMENT IN SERVICE ORGANIZATIONS INVOLVED- HIGHEST LEVEL IN PROFESSIONAL AND MANAGERIAL COMPETENCE Modern management tools applicable to local public institutions can for sure raise performance in service organization reaching out for the highest level in professional and managerial competence. Hence the public service does not take the form of traditional public sector management application in general, being a result of the boundary crisis of the public sector From this point of view, public service management for both public sector management, as well as the private sector are provided by organizations belonging to both sectors. As a modern management area the reorganization of companies on the basis of negotiated competencies determines new types of activities such as those of the personnel „chief”: to intervene, whenever necessary, by a procedure of „repairs” with a view to ensuring good work relations; to be able, assisted by the coaching team, to identify certain risks correctly and in due time and to take steps to lower their negative effects on the mind-set of the employees; to establish suitable relations between the measures taken by other departments and the problems of human resources, creating, in due time, a series of competencies necessary for the future, anticipating some changes in the staff structure etc.; to establish relations of partnership between the employers and the trade unions, to cooperate based on the principle of „the game with positive amount” (in which everybody can win due to the good performance of the company) instead of „the game with null amount” (by which conflictive relations are created, since a „part” is going to win and “the other” is going to loose).
Heads of departments (directors, heads of service) are to be responsible for implementing and monitoring the runaway for the new instruments, as per to talk with employees about major decisions of management, to hear the problems and employees, give employees clear and consistent intonation to be credible, constantly motivate employees to keep the team in touch with all the necessary information, to keep in touch with the human resource department personnel and more than all to know and understand potential problems of the team. Hence, it is necessary to implement an integrated informational system for modern management tools assessment, based on controlling and currently monitoring all sides of the strategy, in order to enable real-time knowledge of level of integration downturn. 3. THE DECISION ON MOTIVATIONAL BEHAVIOR INVOLVES: EFFORT-EXPECTED PERFORMANCE AND PERFORMANCE-EXPECTED RESULTS Level of integration can be expressed by the analysis of the evolution of indicators or economic flows, but the relevance of results can be misleading. Thus, some progress in the intergovernmental economic integration can be expressed by increasing mutual trade. On this evidence, we must emphasize two points. First, that any increase in mutual trade in goods expressed a higher degree of integration, because, assessing opportunity costs of production and trade may have been ignored. Second, it is possible that in certain countries which have low economic complementarity, further integration will not translate into increasing mutual trade (appropriate regional groupings in Central America and Africa, reached the common market stage, although mutual trade is very low). Calculating an index of correlation between the dynamics of trade and integration processes proves difficult, as determined by an impressive number of inputs and outputs indirectly correlated with each other. Although the free movement of goods, services and factors of production is a goal and an instrument of economic integration, amplitude integration process can not be expressed by mere analysis revealed no degree of liberalization in the movement of factors and goods. The integration process involves legislative changes and institutional changes. Therefore, literature retains the concepts of political integration (general macroeconomic and sectoral policies), and institutional integration. Moreover, the decision on motivational behavior involves two types of expectations: effort-expected performance (E->P) and performance-expected results (P>R), and by multiplying with the results valence - V – we will get the motivational force of performance, according to the expression:
Expectatio n = (E → P)× ∑[(P → R)×V ] Performance indicators presented demonstrates that there are sufficient forms to determine the extent to which public services meet the social needs of general interest and, while determining the contribution of every employee, manager and commissioner of a public institution in the development and provision of services. Also, the respect for correlation between labor productivity growth and wage growth medium and evidenced in its coverage of the civil servants performance must be promoted. The correlation between labor productivity and average wage growth is reflected by the correlation index established in one of the following relations:
Ic = Ic =
I cs IW a
I c s 100 IW a 100
, is used only when the two indices have values higher
than 100 . It welcomes when Ic<1, that labor productivity has recorded a growth rate higher than the average wage . As the correlation value departs from 1, the labor productivity will register a higher growth rate and an increase in work efficiency and operating profit. Expression of economic integration covers several economic categories. It can refer to a company absorb a higher organizational architecture. Integration can have a spatial dimension referring, for example, the inclusion of a regional economy in the national economy. In this paper, economic integration is usually used with special reference to international economic relations to indicate economies of member participation at a more comprehensive entity. 4. PROFESSIONALIZATION OF HUMAN RESOURCES IN PUBLIC ADMINISTRATION WITHIN THE DIGITAL ECONOMY The emergence of digital economy assumes the metamorphoses of human capital management control in view of increasing profitability of the individual. Taking as a fundament the concept of human factor having a limited capacity of attention, perception and memory, modern society is found to be in the stage of development and implementation need of integrated informatics systems to enable the completion and updating the cognitive database of automated systems features and the maintenance at an optimal level in the context their dynamic. Thus, from the human operator performance growth point of view it is found as imposed the sine qua non condition the transforming of raw information into intelligent information, useful and applicable, materialized in the human resources actions reactivity increase contributing to the internal or external applications. Investing in human resources and support intelligent decision-making processes with predictive abilities may lead to achieving an optimal level of human capital accumulation, which becomes more productive and positive linked to the economic growth rates.
MAKING DECISIONS UPON PERFORMANCE INFORMATION STRATEGIC VALUABLE DATA
Public management OPEN DATA
Public administration theory
Analysis of the public policies
GENERATING PERFORMANCE INFORMATION Administrative law
Figure 1. Source of the efficiency and effectiveness of public administration Therefore generating competitive advantage in the long term proceeded from the capabilities of human capital, having as the central pillar the promotion of integrated information systems to support the reduction of mental demands, will materialize into protecting the balance in the new circumstances of modern variations economy. Use a static sense, economic integration economic category is a fact that the national economy composite components are not separated by significant economic borders but operate interdependently maximizing synergistic effects. Using dynamic sense, economic integration means the gradual abolition of economic borders between participating states (which may be tantamount to removing many forms of discrimination), former member national economic separated functionally merged into a more comprehensive whole. Transition from static to the dynamic component derived from stages you went through European integration. Economic integration is the integration of first instance, economics making a clear distinction between market goods and services and input markets (capital, labor, entrepreneurship). Strategic valuable data will for sure the center of the above strategic managerial aspects. As per having the correct data at the moment of ensuring the projection of a new strategy within the public are, is the sine qua non condition for a successful public reform. First, generating performance information must be the basis of every public strategy, as per the result of implementing modern management tools that are in accordance with the technological evolution, so that the data is accurate.
Afterwards, making decisions upon performance indicators should become the normal pattern of designing strategic outputs that will affect the course of public administration. Taking into consideration all sides of the area, public management will reach the performance promised each year, fitting into the approved budget of any public institution. Just using the overdue managerial tooling, public decision factors can face the same shortcomings as the ones in the past. This is the reason why we are deeply supporting the promotion of new, adapted to the context, elements within the managerial activity of public institutions. As per finding the source of efficiency and effectiveness of public administration, the figure below is more than relevant, emphasizing the two elements that will lead to the expected results. 5. CONCLUSIONS Moreover, the society evolved and with it also the human’s professional needs. Employees want and need to be acknowledged for their valuable and extra contributions. Rewards and recognition are powerful tools for demonstrating appreciation and reinforcing those behaviors that lead to superior products, outstanding support, strong supplier relationships, and lifelong customers. Digitalized societies primary tool for providing spot rewards is new total rewards process, a resource for global compensation, benefits, variable pay, equity and rewards plus recognition program information as well as job architecture valuable information. With the integration into the European Union, the new European membership with full rights, requires a focus on the needs of citizens, in accordance with the new European requirements, which causes improved performance of public servants, and thus improving the quality of training of civil servants. Without a professionalization of human resources in public administration, it is hard to believe that public institutions and administrative authorities will reach performance levels comparable to those of similar organizations in developed countries. Just based on experience, flair, experience, political and general education elementary level can not be effectively achieved outstanding results in the reform process and it is very hard to imagine that the Romanian public institutions will be approached in a reasonable time for performance public sector major European democracies. Getting allocation or distribution corresponding to a model of economic optimum, it is believed that the definition of integration of new modern management tolling, and it should be a mandatory requirement recovering full mobility of factors. Thus, in the context of technological developments in modern society appears to be absolutely necessary to maintain the quality of life at an optimal level and to respect the integrity of human rights during their work activities. So, directives on safety and health are foreseen to be moving towards sizing research in the field of limiting accidents due to human errors. Therefore, computerized management of public factors introduced as exogenous variables in the analyzed system and at the same time their quantifying effectuated through public management tooling encoding, allows the risk grading in accordance with the importance and frequency of maximum possible consequences on the human body, consolidating the control of known risks. For this to be possible, should be kept in mind that any government effectiveness in public service, professional quality is determined by the officials occupying various
management positions or running, which is why it requires continuous improvement of civil public. As recognition is being known worldwide as the greatest motivator and one of the greatest strengths of any organization are the people who work there, the necessity of implementing the new total rewards process becomes acute. Long-service employees provide the knowledge, experience, and attitudes that are responsible for much of digitalized societies success. In recognition of this, new total rewards are presented to eligible employees in celebration of their career milestones and to acknowledge their contribution to the company. By introducing the new total reward process the truly effective recognition will be no longer a program or a policy mandated by HR, it will become a way of organizational life that touches all corners of the organization most every day of the working week.
Bibliography: . Bondar Florin, Politici publice si Administratie publica, Editura Polirrom, Iasi 2007; . Gheorghe H. Popescu, Knowledge Society, Revista Metalurgia Internaţional, nr.1/2008, Editura Ştiinţifică F.M.R., 2008;; . Hiebert Ray Eldon, Public relations as a weapon of modern warfare, Public Relations Review, Volume 17, Issue 2, 1991; . Ioan Alexandru , Drept Administrativ, Editura Lumina Lex, Bucuresti 2005; . Matei Lucica, Management Public, Editura Economica, Bucuresti 2006; . Miron Dumitru, Folcut Ovidiu, Economia Integrarii Europene, Editura Universitara, Bucuresti 2008; . Mironescu, Alexandra., Popescu G.H., Nica Elvira, Stochastic Reengineering Of Human Capital Strategies In The Digital Environment, Global Conference on Business and Finance Proceedings, San Jose CostaRica, 2009; . Morariu Ana, Suciu Gheorghe, Stoian Flavia, Audit intern si guvernanta corporativa, Editura Universitara, Bucuresti 2008; . Nanes Marcela, Management general: Fundamente teoretice, Editura Pro Universitaria, Bucuresti, 2005; . Nica Elvira, Intelligent Capital Linkage to Human Factors Risk Management, The Institute for Business and Finance Research, Global Conference on Business and Finance, Las Vegas Nevada January 2-5, 2011, volume 6, Number 1, 2011; . Popescu Gheorghe, Nica Elvira, Mironescu Alexandra, The paradigmatic Changes Implications over the Human Resources Management, The Institute for Business and Finance Research, Global Conference on Business and Finance, vol.4, no. 2, ISSN 1931-0285 CD, ISSN online 1941-9589, Costa Rica, 2009; . Nica Elvira, Popescu Gheorghe H., Emphasis of interconnection between the public system of granting salary and incentives and the civil servants performance indicators, Revista Administratie si Management Public, Number: 8 (15): 36 – 43, 2010.
EMPHASIZING MANAGERIAL VIABILITY OF THE ECONOMIC FORCES CONCENTRATION HELD BY THE ACQUIRING AND THE ACQUIRED COMPANY WITHIN THE MERGER PROCESS Professor Natalia BURLACU, PhD Universitatea Liberă Internațională Moldova, Chișinau
firstname.lastname@example.org Mariana CRINTEA, PhD Candidate Universitatea Liberă Internațională Moldova, Chișinau email@example.com
Abstract: Emphasizing managerial viability of the economic forces concentration held by the acquiring and the acquired company within the merger process is setting the basis for ensuring future fulfillment of performance metrics. Thus structural and functional parameters must be taken into consideration upon shaping the company’s overall strategy within a well analyzed environment. Moreover, as the main objective of the new created entity, the managerial board will reconsider and act upon achieving an economically successful merger with due results, assessing past and current results and introducing the short-medium-long term objectives, making the company more visible within the specialized market, monitoring results in order to sustain reasonable improvements that will indeed increase productivity and company profits. Consequently, the merger will affect all of the company’s resources and for sure interfere with the organizational culture in its transition from adequacy to excellence. Thus, in order to increase the company’s managerial viability it must be taken into account both integrated and interactive modern adequate management tools. Keywords: managerial viability, economic forces concentration, the merger process, optimal economic cooperation, recovery and revival of companies JEL Classification: G34, M11, O32 1. INTRODUCTION Topical subject in the modern economy, especially in the context of global-scale digitization of business, mergers and takeovers tend to become a regular practice, if we consider the urgent need for recovery and revival of companies, due to the powerful striking imbalances generated by current uncertain context, the principal effect of this financial and economic crisis and social norm.
Therefore, the primary objectives of companies accessing procedure for merger and absorption lies in rescue attempts of companies declining alloying of companies to operate on a particular economic segment or geographical area, and why not: increase some market share of particularly companies economically and management viable by acquiring competitors or of companies of various sizes operating in a particular segment or in an area of strategic interest for the absorbent company development. Taking into account specific cultural elements, global mergers are a focal point in the agenda of governments, focusing on international cooperation and / or intra-regional to generate greater economic benefits. 2. INCORPORATING ENDOGENOUS AND EXOGENOUS VARIABLES OF CORPORATE GOVERNANCE TO RESIZE THE POST-MERGER COMPANY The latest and greatest interest for European economic resize the post-merger company is also incorporating endogenous and exogenous variables of corporate governance, corporate governance which has been proven effective in bringing benefits to both countries and companies regarding the post-merger activities. Moreover, the acceleration of globalization has created an urgent need for corporate governance, appropriate governance requires that governments and businesses make important changes, firms must change their mode of operation, the government must establish and specify the appropriate legal framework. Thus, good governance within a company reduces risk, improves performance, paves the way towards the financial markets, increases marketing ability for goods and services, improves driving style, show management transparency and social responsibility. In addition, in recent years, international banks and most development banks and national development started or expanded towards the corporate governance program. Within post-merger activities corporate governance also enjoys attention and in advanced countries generally within advanced industrial communities that have become aware that in order to attract investment and compete internationally they must change. Moreover, also within the post-merger context, specialized managerial analysis reveals also the fact that the structure of management bodies of companies also vary from country to country. But not related specifically to the mergers, but affecting it some countries, such as Germany and the Netherlands, have developed a two-headed management structure of firms. There is a clear distinction between the Board of Directors which consists of investors, creditors, employees and is responsible for supervising the company and the executive board or management that is responsible for the daily operational activity. In other developed countries, such as England and Canada, there is only one Board, and the independent members without executive tasks, being also significant. From this point of view, we consider appropriate to promote generalization of external benchmarking activities that involve comparison with other competitors, the remit of the organization, leaders and competitors to organize in other areas, with different profiles. Of course, in direct correlation with the company's management circumstances that will access external benchmarking benefits that must include the stance that will "dress" external benchmarking according to the internal needs.. Therefore we recommend competitive benchmarking, comparisons with other organizations aimed at competing with an objective: identical or similar. Thus it is recommended the monitoring competition to enroll currently on the agenda of the
management of any organization that is respected. Moreover, nominees that are already members of benchmarking clubs - which are associations in one area or another - should provide a minimum of information on each direct competitor, thereby facilitating the achievement of objectives of common interest. But we mention also the major difficulty faced by competitive makers of benchmarking represents, however, the collection of relevant information and complete practices employed in obtaining performance.
• ANALYZING POTENTIAL WELFARE COSTS AND BENEFITS OF MERGERS BETWEEN FIRMS
• COMBINING THE ORIGINAL SOCIO-TECHNICAL SYSTEMS OF THE MERGING ORGANIZATIONS INTO ONE SUCH NEWLY-COMBINED SYSTEM
• REVIEWING MERGERS AND ACQUISITIONS UNDER ANTITRUST / COMPETITION LAW
Figure 1. Stages kept into foreplan within merger benchmarking [source for inside information:http://en.wikipedia.org/wiki/Mergers_and_acquisitions] However, there are various functional benchmarking aimed at comparing with competitors-leading organization in its field of reference, both globally and at the level of functions - research, development, commercial, manufacturing, etc.. Furthermore, specialists consider that it is relatively easy to gather information about the results and how to obtain them from the leaders, their availability is aimed at initiating and developing collaborations with other organizations. But if it is considered relevant and appropriate one can access a generic benchmarking, which involves comparisons with organizations in other fields, some quite different. Obviously this type of benchmarking is very difficult due to difficult access to relevant data and information, and because the difficulties in finding similarities in a number of areas. Their recovery requires creativity and innovative managerial, technical skills and competencies.. Very important is to note the fact that the economic practice of the last decade has shown that when benchmarking is based on relevant background information and knowledge, which refers to a representative sample of organizations and / or activities in the areas involved and the management respective organizations show discernment, receptivity and capacity to adopt and implement high benchmarking results, competitiveness is significant.
Its foundation is to implement best management practices, financial, technical, commercial, human resources, that is, sets of knowledge with high added value to proven economic and social practice. 3. POST-MERGER ACTIVITIES AND THE ABILITY TO GENERATE PERFORMANCE WITHIN ORGANIZATION’S MANAGEMENT We believe that management benefit within post-merger activities integration, are highlighting benchmarking outputs, by comparison, the relative, but essentially, the ability to generate organization management performance. Continuing on the same line, a major aspect of increasing current area on which we consider necessary to point out certain elements refers to sources of scientific opportunities that the current conditions are becoming increasingly important. They enjoy special attention being addressed in the literature as the academic spin-offs. This premise is the fact that the foundation of the company's strategy, it is necessary to consider some aspects of economic, technical, managerial, social, human, legal, etc., in proportions that reflect their share of the operating mechanism of each organization. On the basis of the company as a system obviously it cannot be omitted as structural and functional parameters in shaping the overall strategy. In the current mergers, they tend to be an added-value factor; essentially, they consist in the transfer of knowledge and know-how of the universities and research institutions in economic activity through direct involvement of their employees who participate in entrepreneurial activities. So the specific that the academics, researchers and some students are directly involved in turning into profit the economic opportunities associated with this scientific knowledge they possess. Their work is both in initiating entrepreneurial activities and in providing dc consultancy, training, technical assistance, etc.. for recovery of economic opportunities identified. Therefore, the cooperation of the academic spin-off tends to occupy a worthy place in the design of effective post merger strategies and absorption as well as post-merger integration reengineering in order to meet the economic and managerial sizing profitability. In conclusion, we believe that companies will put at the forefront of merger and post-merger activities, complete and consistent management strategies of fundamental managerial circumstances, and being listed for sure in doctrine and practice specialty as examples of successful fusion. It takes good planning to keep prices, given the synergies and other benefits that are realistically expected from a purchase. Poor planning increases costs for everyone, especially for shareholders entrust their money to managers who, they hope, will work in their interest. The lack of a logical approach to implementation is also part of the set of generators causing failure of mergers. For strategies to succeed absorption type merger it is required a logical approach to implementation. The importance of this for all strategies was highlighted and is especially valid for merger and absorption strategies. The implementing diversification without having a plan and a well thought out implementation processors is like asking for trouble. Poor integration is undoubtedly central to the failure of mergers and takeovers worldwide. This is very often due to the failure of large transactions. For a merger to be successful no matter how small, structural integration should be performed, thus if the managerial board is sufficiently aware of the contextual benefits.
4. OBTAINING AN EFFICIENT ACTIVITY AFTER THE MERGER If we are taking into consideration obtaining an efficient activity, after the merger, it is important to count in merging functions or divisions, of the organization and clarify responsibilities and authority in organizations merged, as per the understanding of the particular guidelines of each department involved. Even more important to the success of merger and acquisition is cultural integration that is very outspoken in the ultimate period, as being a large cause of merger failure. Audit conducted in the planning stage can prepare acquiring company to cultural conflicts and other problems of the same kind. But even with good planning cultural integration is a formidable challenge which, if done poorly, can impair absorption merger and implementation strategies. Attempts to operate diversification strategy that ignores cultural management and cultural change are doomed to failure, without any doubt or question mark. Thus, we considered achieving a synoptic interregional the causes generating postmerger failure in conjunction with European experience and an overview of the causes generating interregional the post-merger success in conjunction with European experience. As an economic and social system, the company absorbent input means groups of employees engaged in work processes generating economic goods products, service. which satisfy the market demands. Its role in the economic activity of a country is crucial, hence the need to respect the economic dimension into the overall strategy. Therefore, management focus, to achieve an economically successful post-merger, and technologic world as it is visible and appropriate that reasonable improvements increase productivity and company profits. Also, research has shown the determining role of organizational culture in transition from adequacy to excellence. Thus, modem management must take into account both worlds, in an integrated and interactive pattern. Moreover, considering the implementation costs, they are the often overlooked implementation costs beyond the obvious expenses, taken into account in implementation strategies. Structural and cultural integration time and require management involvement. If implementation responsibilities are not clear, the decision time increases and frustrations arise. Managers may or may not leave the company "psychological surrender", the frustration is an unclear direction of any change. The support offered within the change segment must be available at any request, for not surrendering to the trap of “it cannot be done”. Thus post-merger implementation activities can generate opportunity costs, since time spent in implementing merger and absorption means less time available for other management tasks. Time dedicated to implementation can distract from other important forces of industry and competitive conditions, adversely affect the organization's performance. Real and opportunity costs, including those associated with management involvement in resolving the implementation issues is certainly a potential problem when trying to implement strategies of post-merger aspect and absorption. Of course, sometimes the time speed for transactions within merger and absorption and integration activities is predominantly as a good thing. But excessive speed may be dangerous. As heretical as it sounds, speed integration and cultural change can have serious disadvantages. When integrating an acquisition, the time spent for changing the contextual environment and the need to manage many conflicting factors simultaneously may result in a very complex change, with disastrous consequences, if not currently administrated at the needed moment.
Thus, economic practice management supports the results analysis supporting organizational culture as the genetic code of an organization, ruling partly written and partly unwritten, but mandatory. Hence the importance of organizational culture in implementing strategic management is without any doubt vital. It plays a very important role in awareness of the need for change by implementing policies and strategies developed in the contextual merger guidelines. Organizational culture is conservative by nature and therefore will oppose any major change innovations and trends that management wants to do. There is also the option of creating a dynamic corporate culture, but such a strategy is very difficult to implement. When successful, dynamic organizational culture contributes fundamentally to strategic success of the firm, the advantage of such a culture is to promote dynamic and creative thinking patterns, patterns that encourage change, not hinder. Appropriate focusing on innovation and continuous adaptation to their external environment leads post-merger companies to the expected profitability. The managerial board must be aware at any level that change can interfere with the normal managerial thinking as the unknown may stress out situation that have not been met before within the absorbent or absorbed company. Economic practice, also brings to the fore the need to achieve a comprehensive multidimensional optimization in the context of merger and absorption of the two companies, and access to post-merger success. 5. CONCLUSIONS In terms of government guidelines, efforts are made to create the legal space for optimal economic cooperation. But, above aligning legal contexts and countries involved in the merger we need to underline the managerial viability concentration of economic forces held by the acquiring and the acquired company. We make this statement because economic practice brings to the forefront famous failures of economic analysis, bad management attributed to incompatibilities or rather on account of inadequate design and ineffective management plans forward the basic characteristics of companies within the merger process and / or post-merger activities. Although all economic practice, we show that in some cases when the merger failed, there were not even considered managerial circumstances that subsequently proved to be behind the initial merger erosion. Hence, we must not undermine the basic role of managerial tooling as per considering more vital the short and medium profits. Thus, basing our statement on the doctrine of specialty, the European experience based on management components failure diagnosis and successful mergers of European renown, and the synthesis and processing of quantitative and qualitative European recent surveys stress the consequences of not taking into account the need to redesign the fundamental management and reengineering circumstances benefits of merger or absorption within optimal management companies concerned.
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RESIZING EMPLOYABILITY THROUGHOUT VOCATIONAL EDUCATION AND TRAINING PROMOTION Associate Professor Pawel PYZIAK, PhD Stanislaw Staszic State School of Higher Vocational Education Pila, Poland firstname.lastname@example.org
Assistant Lecturer Alexandra MIRONESCU, PhD Candidate Romanian –American University 1B, Expoziției Avenue, Sector 1, Bucharest email@example.com
Associate Professor Sebastian STEPIEN, PhD Stanislaw Staszic State School of Higher Vocational Education Pila, Poland firstname.lastname@example.org Abstract: The modern technique makes the human effort easier and increases the effectiveness enlarged the area and the variety of demands by adding many aspects or many "unknown" in the man-demand relationship. In these circumstances, it is justified and normal the modern society concern for more rational use of energy human, and so the research is gaining great importance in the role of design work conditions and effective recovery of human potential. For mental environment to allow adequate recovery teams work opportunities, a paramount function properly pays staff of consistent performance and overall management function. It comprises a series of basic tasks as: decision-making, establishing communications, motivation, personnel selection and training of subordinates, incentives. Hence, new skills, knowledge and competences are needed in the labor market, those who fit the market needs, in its current status. Keywords: vocational education, employability, acquiring skills, mobility and flexibility work, increased efficiency. JEL Classification: J53, M12, M 51. 1. INTRODUCTION Regarding human resources, is vital to access the information given by the European Union, for guidance in this transition period through which the universitary area passes, and to use information for the intellectual and professional forming.
Understanding the need of common settlements proves that the universitary area has realized that, in order to gain productivity its market has to align to the internationalization of trade and ethnology. And the best road for aligning to the European standards is to have access to the newest information. The lifelong learning system applied also in the universitary area will strengthen the human resources competitively on the European Union market and will also increase the human resources adaptability to different work places and structures. Romania's human resources, in the European Union accession context, have to adapt in order to be efficient. It is hoped that, the European Qualification Framework will be implemented and the universitary studies structure will be changed. For this to be done, the information that reaches the people has to be relevant and significant. Living in a globalized society based on knowledge, the human resources have to cooperate- national and also international – because lifelong learning can be applied, only through a variety of partnerships between people, institutions and countries. The starting road for an international cooperation is to create European networks regarding professional forming. In order to be accepted on the European Union market, the universitary area, have to reach the standards used in the European Union. 2. CREATING A MODERN ECONOMY BY THE CONDUCT OF THE REORIENTATION AND RETRAINING PROCESS From the perspective of creating a modern economy, ensure adequate labor is conditioned by the conduct of the process of reorientation and retraining. This practice which improves mobility and flexibility work contributes to reducing workforce training costs and effects of unemployment and obtaining higher wages. If the market in general and labor so solves its problems through mechanisms specific day for future developments, as is that of predicting the dynamics of supply and demand for labor is needed and developing scenarios and forecasts. As it is known the modern mentality of man, his conception about work, brought in by plan the importance of life quality in general, the professional life quality in particular, and also the comfort and safety at work. In these conditions we assist to the concern’s intensification to improve the working environment by taking in consideration the ergonomic requirements. Although the scientific and technical progress has determined qualitative changes in the process of work, and increasing efficiency followed a path almost parallel with the improvement of working conditions, paradoxically the full recovery issues of human potential and decreasing effort not only that are very present, but became with the passing of time more complex. Also the modern technique makes the human effort easier and increases the effectiveness enlarged the area and the variety of demands by adding many aspects or many "unknown" in the man-demand relationship. In these circumstances, it is justified and normal the modern society concern for more rational use of energy human, and so the ergonomic research is gaining great importance in the role of design work conditions and effective recovery of human potential. Therefore the contemporary research of human factors and ergonomic is directed towards improving the working methods and the working environment to enlarge the efficiency in the technological and revolutionary working environment development context by introducing computerized systems.
Thus, on the implications of retrofitting, as a way of promoting technical progress on labor studies undertaken in many countries, sectorial and enterprise level shows that if the short term, this process can lead to the elimination of jobs work long term due to increased input use efficiency, increasing the rate of profit and, on this basis, the possible accumulation occurs creating new jobs. In the increasing resizing of work systems complexity context the need to optimize the relationship between human capital and technology, located in a state of perpetual evolution, is being highly revealed. As ergonomics was determined by technology, within a reactive approach to systems design interacting with human factor, in the future ergonomics should determine the evolutionary trend of technology, with the emphasis on the proactive approach towards design. In this respect it is being shown the purpose of engineering towards reshaping the natural world in terms of protecting human needs. Therefore, the human capital-technology relationship substance materializes in promoting a holistic approach, focusing on human factors, leading to increased efficiency, productivity, performance and overall human welfare and not least on increasing the quality of life. Work involves the very existence of people with their physical and intellectual potential, is itself the manifestation of life, through a complex system of relationships between man and nature. 3. ACQUIRING SKILLS, KNOWLEDGE AND COMPETENCES NEEDED IN THE LABOUR MARKET New skills, knowledge and competences are needed in the labor market, those who fit the market needs, in its current status.
Raising Human Resource Flexibility
Easy Adaptation To The Employers Requirements
Increasing Labor Mobility
Raising Interest For Continuous Learning Programs
Reducing The Unemploy-ment Rate
Figure 1. Acquiring skills, knowledge and competences needed in the labour market
With the adoption of necessary measures on the various phases of the product life cycle must be an activity supported by marketing research and manufacturing enabling the successful launch of new products or services. Professional vocations refocusing on core business and cost required to meet the breakeven as soon as possible in order to increase volume and therefore profits return, which ensures improved work flows. Such centering is necessary to pursue adding value to an active person by upgrading products and technologies used. If, referring to the optimization of human factors-language-work environment report, we should reveal the high significance of human mind and body function in the operation of the nervous system healthy. So, human operator safety and health protection within work processes is being established as an essential goal, working and rest conditions occupying a truly vital role in ensuring a high quality of life. The interconnectivity of nervous cells and the interdependence of human body organs will become the physiological basis of perception, thinking, feeling and functioning of the whole human system, and with the effective functioning of the human system we can extrapolate and record the effective functioning of the entire organizational system. Measures to be adopted to achieve strategic orientation centering on professional vocations known and cost are of different specificity relative to the company. This centering requires abandoning those activities that produce losses or professional vocations of those who do not provide a good competitive position, focusing on those production units through activities are the most competitive selling those expensive or less profitable operations, and the sale of those activities which do not fall within the organizational culture of the company and not the good prospects in terms of competitiveness. In order to reduce expenses that are variable production cost component may be taken multiple ways, such as those relating to reducing consumption of raw materials directly, using advanced technologies that ensures products with lower material consumption, redesigning and upgrading products reducing labor and material consumption, rationalize product range and giving the products requiring high labor and material consumption, labor productivity growth, which decreases in payroll costs, streamlining production systems to increase yields equipment, systems reorganization distribution, packaging and transportation spending cuts affecting variable costs, etc. To achieve this goal, gathering information and analyzing their have to allow the reformulation of problematic points, so that fundamental issues can be pursued and evaluated in any phase of planning and conducting the action. Of course, only under the selection of appropriate criteria, one can foresee the possibility of analyzing actions aimed at changing in terms of their results. Therefore, being recognized at a transnational level, that it can not be considered an organization upward trend of progress in the absence promoting the development of human capital, it must be emphasized the mention under which: a change can occur individually or in group. Regardless of the change level towards which the change strategies are driven, one must take into account the needs of people. Reducing fixed costs data can be also appropriate measures such as reducing the depreciation charge by giving up the machinery and equipment without use structures and procedures simplification and reduction of administrative costs, reducing to a minimum of staff employed in company management, customers and accelerate payment borrowers, reducing storage costs of materials and products, etc. Measures to reduce production costs must be based on a careful analysis of their size, aiming to reduce prioritizing those expenditures that have a large share in the cost structure of production.
Harmonization of social policy with strategic and tactical business objectives is another strategic focus of the strategy for recovery and boosting business. This harmonization is necessary to aim at consensus all staff to achieve business objectives, based on a strong motivation it. 4. CONCLUSIONS Conducting effective social policies that contribute to the recovery company involves maintaining cohesion social forces of business, achieving good communication and union policies. The human capital development strategies focuses on their dimensions in terms of strategic and operational needs of the national economy and ensuring efficient use of these resources. They will help formulate strategies for economic development through the establishment of future human capital requirements, by identifying ways to top use of this capital, where human capital will be available to support the implementation of plans for economic development. But it must be shown that there are stringent limits on the use of human capital, such as shortages of qualified personnel, difficulties in recruitment of labor, low labor productivity, lower flexibility and adaptability to climate or insufficient discourages cooperation and committed staff. Maintaining social cohesion forces can be achieved by ensuring transparency in decision making and knowledge of the real situation of the business, while good communication policy implies a permanent dialogue between management and operational staff, as the use of simple language that can be understood of each one. In good human resource management plays an important role and political union based on a fair negotiation satisfy the needs of employees, between management and the trade unions. The strategy for recovery and boosting business activity is necessary to provide tactical guidance as it relates to revitalize the business and organizational change program. Work process very complex process does not occur by default but only because of the existence of structural elements and is not the result of momentary circumstances. Work process is a dynamic process resulting from relational interaction of elements as the task and process of physical and mental human living during the process - request. Therefore whatever angle we are trying to look at this complex issue in the end, it appears that a relational report: human-produced task (process) - request. This report must be addressed in all its aspects in order to know and define states and movements that occur by essence ergonomics system. Speaking of deeper analysis means that setting the requirements and demands in various fields, imposed work tasks, should be, in fact, a permanent goal, first order. Therefore, to define the abstract of the work process we will study all working conditions, as shown themselves in shape, image, factors and features. Ie that framework that characterizes the work process from abstract to concrete reveals to us the system by application. Working conditions are determined by a number of psychological factors, technical and social organizational, acting on the performer at work. The quality and scale of the factors influencing human action can have on positive, neutral or negativ, state and request it generates. For example, analyzing and comparing the values: load (S), work capacity (C) the potential to achieve physical and psychological burden (P) request (Sr), we find that the system can occur different types of relationships
For mental environment to allow adequate recovery teams work opportunities, a paramount function properly pays staff of consistent performance and overall management function. It comprises a series of basic tasks as: decision-making, establishing communications, motivation, personnel selection and training of subordinates, incentives. In the second place, the psychological atmosphere depends on how satisfied the organizational function that consists of the following groups of tasks: improving organizational structure, delegation of responsibility and authority, creating links and relationships comradely cooperation. Thirdly, psychological environment is influenced by how the control function is exercised. In this direction, there are precise criteria, an optimum frequency and level of detail of hierarchical control can have serious influence. It is recommended that as much as possible to expand the self and to stop generalizing and absolutization of hierarchical control, people should be educated to acquire standard and authority the facts and measure their results this to develop confidence and personal initiative. Innovative methods in the production process have created the premise sizing requirements introduced advanced equipment and technology to create conditions for recovery qualitative human potential and to achieve maximum economic results. From this point of view the dynamic context of automated operating systems led to the creation, implementation and use of computer interfaces that allow human-machine dialogue management under the aegis of protecting mental models of the human operator. Growth performance perspective human factor thus appears to be required to be supported by user interface enabling increased efficiency and reduced mental application. In the face of technological change, the performance is quantified through qualitative and quantitative share held by the human operator role in complex dynamic control technology systems. Thus from the perspective of the role of manual controls transposition of automated systems in their role as supervisor, it sees the need to implement interfaces that allow sizing computerized human performance, given the limited capacity of attention, perception and human memory, introducing interfaces must, also allow time to complete and update database cognitive characteristics of automated systems and maintaining them at their optimum level in the dynamic context. Performance thus promoting human factor should be supported by user interface enabling increased efficiency and reduced mental application. Also knowing that tends to balance the human-machine-environment system, in terms of maintaining and improving quality of life, implementing computerized interfaces to optimize automated systems must be made to reduce the physical effort of the human operator as well as mentally, maintain mental models of operating systems human factors that create context for control systems where complexity is too high to allow identification system status in real time.
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COMPLEX SEAPORTS MANAGERIAL EMPHASIS WITHIN THE ENVIRONMENTAL SECURITY AND SAFETY CONTEXT Associate Professor Florinel COSERIN, PhD Universitatea Liberă Internațională Moldova, Chișinău
Paul COȘERIN, PhD Candidate Universitatea Liberă Internațională Moldova, Chișinău
Abstract: In the current context water pollution, beginning with the last decade of our century, has become an imperative area of strategic debates within the strong industrial development world status, the difference between the quality of natural water sources and water quality required by consumers (drinking, industrial, irrigation, etc.) increased, reaching levels that, in many cases, led to the impossibility of applying treatment technologies known. Ensuring a certain quality level is the thinnest line that separates optimal from catastrophic. Thus, being in the fore, the complex seaports have a strategic role within the environmental security and safety context, and also within the national economy - in the sense of values being determined in the market, but cannot be marketed in the form of goods and services cannot be measured in monetary value and require new assessment tools that include quality aspects. Hence, we are strengthening in applying the concept of quality sustainable development, within which the government can influence the behavior of authorities, but more important businesses and individuals are also subjects of environmental policy instruments that aim to achieve positive reinforcing the links between development and the environment and breaking the linkages between economic growth and environmental damage. Stressing out the managerial guidelines, complex seaports as playing a strategic role within this context must for sure shelter endogenous and exogenous variables for securing from ecological risks. Still, the conclusions are redirected towards major element contents foundation of quality stages developing ecological studies. We are considering that their importance has a conditional placement for the complex seaports, size and alignment requirements mainly taking into accont the securing environment development from ecologic risking. Keywords: complex seaports, managerial emphasis, environmental security, ecologic risks, environment-economy feedback JEL Classification: L92, R41, R42
1. INTRODUCTION Discussing the managerial emphasis of complex seaports in the above named context, under different circumstances of time and place, even if some methodological shortcomings approached from the early stages, we are taking into fore point the shaping of natural resources issues and their limited nature, that stands for an imperative due, for our world existence. Obviously without proposes an approach to the history of economic thought related to this field, we want to point out only that, essentially, in terms of quality environment we can discuss about a long term sustainable development from which the future generations will feast also. Thus the environment area is not a for next year discussion but a today strategic due! 2. SUSTAINABLE DEVELOPMENT AND SPATIAL PLANNING Thus, another major element from the contents foundation stage is the development of ecological studies. Its importance is conditional for the seaport optimal functioning. Hence, complex seaports development involves an external cost borne by the environment, whose size, becoming more evident in recent years, although not yet properly considered and evaluated rates, questioning the long term viability of the process itself economic. Complex seaports environmental issues and ensuring their sustainable economic development are fundamental issues that, in the context of EU integration, are giving new dimensions to strategic and tactical processes at all levels. Ecological studies meet the imperatives of such processes, highlighting "critical areas" and polluting activities, the amount of pollutants emitted into the atmosphere, the impact on the environment and human health costs of pollution, and the main ways to mitigate or eliminate pollutant nature of activities microeconomic. Sustainable development and spatial planning, thus, go hand in hand, when projecting for new areas of exploitation, in which environmental policy instruments are acting as if they are not only necessary but also desirable in this period when our current the economy is browsing looking for an ecologic balance. In the current context water pollution, beginning with the last decade of our century, has become an imperative area of strategic debates within the strong industrial development world status, the difference between the quality of natural water sources and water quality required by consumers (drinking, industrial, irrigation, etc.) increased, reaching levels that, in many cases, led to the impossibility of applying treatment technologies known. Ensuring a certain quality level is the thinnest line that separates optimal from catastrophic. Currently, to leverage the pollution, solutions become more complicated, as many endogenous and exogenous variables are involved, some very hard to displace some emergent, some blameless on the man, incontrollable by him. Hence, in order to complete the strategies, efforts have to be sustained starting from individuals and going back to government policies that are compulsory. Consequently, as being one of the first line of interference with nature complex seaports are posing as first line also for strategic needs in terms of securing for ecological risk by ensuring non fume decisions.
Moreover, pollution is deteriorating the quality of physical, chemical or biological properties of water, caused directly or indirectly by human activity, from which water unfit for normal use for the purposes for which such use was possible before intervening alteration. The decision factors must provide for protective measures and all individuals must stamp for any dint that is assumed to be misplaced and stand for an ecologic risk. It is interesting to note the wide variety of contaminating substances who are found in water sources: - Inorganic compounds that accumulate in the bottom sediments; - Organic compounds with a very slow degradation; - Toxic mineral compounds containing heavy metals that cause changes in the organoleptic, physical and chemical; - Petroleum substances; - Bacteria, viruses, parasites; - Radioactive substances; - Dissolved mineral salts (chlorides, phosphates, sulfates, and so on). We are setting up a howl regarding water being charged with polluting materials that become forbidden for its use by humans in various practical purposes, and by contacting storm water (rain, snow) products of human activity found in the air and on the ground the contamination spread rapidly. Whereas the areas of water use takes the most diverse forms (drinking water, water industry, water in agriculture, fisheries, urban and recreational purposes), its possibilities are very high on pollution as there are found the largest quantities of wastewater from industrial plants, ferrous metallurgy, nonferrous metallurgy, inorganic chemistry, organic chemistry, etc.), and wastewater derived from domestic consumption (domestic hot water) in large enough quantity. Thus the quality of water stands under an enormous question mark regarding its leveling metrics. Modern life brings greater chances and choices for complex seaports , but also greater risks and uncertainties. Complex seaports have the freedom to adopt varied legislative guidelines, but equally the responsibility to shape their own managerial viability, in the commercial area. Accordingly, complex seaports play a central pillar role within the securing for ecologic risk. Struggling for faster and larger way of products transportation one may not take into account the effects on the environment, thus the ecologic risk securing guidelines go beyond actual seaports and being also displaced to sea transportation means. Polluting a large quantity of water in the middle of the sea/ocean stands for an emergent catastrophe but also for a seaport fault in terms of not ensuring the control for stamping the ship as inappropriate. As one can see the line between optimal and catastrophic is very thin if all the international environment regulation does not finds itself as being respected word by word. Not changing the emphasis we put forward the concept of sustainable development resulting from the very way in which environmental value does. In terms of securing for ecologic risks complex seaports are the very specific area for feedback data in terms of sea freight, as the maritime transport plays a vital role in achieving commercial traffic, the complex and diverse nature of trade is very sensitive to the risk of damage over sea. The basic concern is on account of environment protection by any means, as it is better to protect than redress, mainly because partly is impossible and the effective costs are tremendous.
3. BENCHMARKING FOR QUALITY AND COMPETITIVE SERVICES WITHIN THE ENVIRONMENTAL SECURITY AND SAFETY CONTEXT Thus, being in the fore, the complex seaports have a strategic role within the environmental security and safety context, and also within the national economy - in the sense of values being determined in the market, but cannot be marketed in the form of goods and services cannot be measured in monetary value and require new assessment tools that include quality aspects. Moreover, we underline that the risk of failure is associated to risk components which involve the use and development of overdue technologies and ecologic issues which contribute to lack of strategic objectives and action upon securing for ecologic risk. The risk must not be transferred to companies that provide in term of cost- service contracts, technical assistance or additional insurance, but be sconce at the level that was responsible for it. The importance of this dimension lies in the recently recognition by experts in environment management as a complex system, as both the space for the ecological empowerment, and the complex seaports are possessing the power unit in relation to the environment and the impact as power relations under socio-political pressures on the functioning of its internal or external environment variables. Accordingly, the role of strategic partners, as profit and non-profit organizations should also be taken into account giving the weight to the stage of development or specific difficulties, characteristics of the transition period. No doubt the year-sluggish economic development changes the natural environment, both in that it uses environmental factors in their capacity-renewable resources or not - and in that nuisance under products, waste generated by human activities and discharged into the environment affect in a greater or less, sometimes irreversible ecological balance. Hence, we are strengthening in applying the concept of quality sustainable development, within which the government can influence the behavior of authorities, but more important businesses and individuals are also subjects of environmental policy instruments that aim to achieve positive reinforcing the links between development and the environment and breaking the linkages between economic growth and environmental damage. Stressing out the managerial guidelines, complex seaports as playing a strategic role within this context must for sure shelter endogenous and exogenous variables for securing from ecological risks.
Encouraging and attracting freight traffic Providing the shortest alternative transport Total logistics management from stevedoring through outbound loading Multipurpose port with modern facilities
SUSTAINABLE DEVELOPMENT THROUGHOUT ENVIRONMENTAL PROTECTION
PROFITABLE MANAGEMENT OF MARITIME PORT COMPLEX
Environmental security and safety context Ecological equilibrium Protecting green infrastructure Diminish environmental risks
Figure 1. Quality and competitive services within the environmental security and safety context Where the degree of degradation is advanced, the concerns must be channeled, especially towards the second side. In this respect, and restoring the natural environment elements, judicious use of natural resources takes a certain priority in the design and overall spatial policy. Still, the conclusions are redirected towards major element contents foundation of quality stages developing ecological studies. We are considering that their importance has a conditional placement for the complex seaports, size and alignment requirements mainly taking into account the securing environment development from ecologic risking. Sustainable development pays special attention to complex seaports management, considered as a whole, as a complex system based on its assessment. The main implications of the concept of sustainable development on seaports, within the ecologic risks securing context, can be summarized as the need for a new optical integration of environmental problems, for sure, separated upon different levels of planning activity and decision factors. Hence the viable managing of a complex seaport, from the ecologic risk securing point of view grounds upon up-to-date information and knowledge drawn from such environment research that is found in studies that substantiate the seaport’s strategic projections both in terms of objectives and modalities, type and volume of resources involved in operationalization.
4. CONCLUSIONS As this is still a clamorous due the environment issues are currently considered a political priority internationally, cannot being excluded from enrollment concerns coordinates within a new economy, within a new market within our lives. Economic development involves externalities borne by the ambient environment, which makes us even consider the long term viability of the process itself, as we are bringing into the fore the interaction environment-economy as the interdependence that ensures stability. Accordingly, we consider as a strategic pressing measure acting upon feedback data! Working upon sustainable development, we will find the area of transformation in which the exploitation of resources, direction of investments, the orientation techniques and institutional changes take place in harmony, as a strong desideratum for raising life quality, more and more the central pillar criterion for selection of economic and structural policies adjustment in general and environmental policy and health especially at this stage. In other words, economic development involves an external cost borne by the environment, whose size, becoming more evident in recent years, if not properly considered and evaluated, questioning the long term viability of the process itself. Sea transport is in turn an important role in determining the level of customer satisfaction with the products and services offered by the company, the choice mode of transportation of goods directly influences sales prices, fast delivery and integrity of traded goods. As the doctrine states in applying the concept of sustainable development, the government can influence the behavior of authorities, businesses and individuals as subjects of environmental policy instruments that aim to achieve positive reinforcing the links between development and the environment and breaking the linkages between economic growth and environmental damage. This will mean moving the focus from quantity to quality in all the positive effects resulting from it. We enhance this statement with the basic due of natural resources securing. If we cannot multiply them, at least protect them and make use of them in a safety quality mode Consequently, complex seaports are one of the central pillars of the environment safety securing. As per their undermine-able role within the oversea communication and transportation, managerial viability, under the aegis of ecologic accuracy, the complex seaports stand for becoming increasingly vital for undertaking water pollution. More or less predicted environmental issues have become priorities at global level and EU level legislation has been developed as a complex. The fact that the heads of the most developed and powerful countries in the world have focused their last meeting on environmental issues, adopting some revolutionary decisions is evidence of these developments, as current sources state. As a result, analyzes and environmental studies will become increasingly important requirement increases according to their content and approaches to EU standards and their impact on strategy development and implementation organizations rapidly amplified.
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WORKING PAPER UPON COMPETITIVE BUSINESS RISK REVIEWHUMAN CAPITAL OUTCAST Associate Professor Sebastian STEPIEN, Ph.D Stanislaw Staszic State School of Higher Vocational Education Pila, Poland email@example.com
Assistant Lecturer Alexandra MIRONESCU, PhD Candidate Romanian –American University 1B, Expoziției Avenue, Sector 1, Bucharest firstname.lastname@example.org
Stanislaw Staszic State School of Higher Vocational Education Pila, Poland email@example.com Abstract: The information society represents a new stage of human civilization, a new way of life that implies intensive use of information in all domains of human activity and existence, with a great economic and social impact. The information society gives its members large access to information, a new method of work and a way of knowledge; it amplifies the possibility of economic globalization and the increase of social cohesion. Hence, competitive business risk review-human capital outcast is important for institutions for any short or long term activity. Benefits and opportunities must be seen not only in the context of itself, but also in relation to the multiplicity of stakeholders that may be affected. There are many risk management solutions that meet their goals. The solution is both managerial discipline and organization processes and existing systems because they provide necessary information on the risks inherent in which to adjust the policy options. Ability to handle strategic options is a key performance indicator which permits the risk management strategy. Thus, strategic planning based on prudent risk management involves taking calculated risks in order to obtain an advantage; this is maximizing value while maintaining acceptable risk tolerances of stakeholders: creditors, suppliers, customers, employees. Keywords: risks associated strategic decision-making, key performance indicator, risk review, calculated risks JEL Classification: D 81, G32, J24, O32.
1. INTRODUCTION Risk management is the core of any organization's strategic management. The process by which organizations identify risks associated with each activity in order to obtain significant benefits from each activity and the entire portfolio of activities. An effective risk management can help your organization to identify some potential risks that may arise in the implementation of the Strategy. The evaluation of potential risks, the organization is able to identify a number of strategic options to maximize benefits. Advance towards the information society, based on knowledge is considered, in the world, as a necessary evolution for ensuring sustainable development in the context of the "new economy", based mainly on product and intellectual-intensive activities in order to create an advanced socio-human civilization. In order to have a solid process of strategic decision-making, management organization should receive information and processes that allow decisions about risks. Such processes are vital to ensure the link between risk management and strategy, allowing the organization's management to establish a business strategy and resource allocation to achieve economic performance. Strategies for human capital development focuse on the dimensions of human capital in terms of strategic and operational needs of the national economy ensuring efficient use of these resources. They will help formulate strategies for economic development through the establishment of future human capital requirements, by identifying ways to use top of this capital, where human capital is available to support implementation of plans of economic development. But we have shown that there are stringent limits on the use of human capital, such as shortages of qualified personnel, difficulties in recruitment of labor, low labor productivity, flexibility and adaptability to climate insufficient or discourage cooperation and commit personnel. These facts being given it is vital for universitary studies structure to be redefined only from the labor market demands point of view. In order to do that, first, we have to take into reflection the globalization trend that shows us that we have to establish a connection between Romania’s Labor Market and European Union Labor Market. The binding agent between the two markets is no other than European Qualification Framework. What other better way to follow in the context of globalization, than to have common settlements? Putting into use the European Qualification Framework will facilitate labor market mobility across borders, using the communication between systems, following the transparency and the recognition of studies and competencies at a European level. Risk management is important for institutions for any short or long term activity. Benefits and opportunities must be seen not only in the context of itself, but also in relation to the multiplicity of stakeholders that may be affected. There are many risk management solutions that meet their goals. The solution is both managerial discipline and organization processes and existing systems because they provide necessary information on the risks inherent in which to adjust the policy options. Ability to handle strategic options is a key performance indicator which permits the risk management strategy.
2. MAXIMIZING VALUE WHILE MAINTAINING A STAKEHOLDERS ACCEPTABLE RISK TOLERANCES Strategic planning based on prudent risk management involves taking calculated risks in order to obtain an advantage, this is maximize value while maintaining acceptable risk tolerances of stakeholders: creditors, suppliers, customers, employees. Integrated risk management across the organization is closely linked with corporate management and internal control, as already mentioned, but there is a close connection with performance management. In order to ensure the objectives planned in advance, it is necessary to establish key performance indicators, based on which, subsequently, can be set the risk appetite, accepted by the organization. Thus, integrated risk management process management provides a framework for effective risk management approach and the ability to manage them, thus increasing the ability to increase the value added of the organization, value is created, maintained or eroded by every decision made by management at both strategic and daily activities targeting the organization. Under the circumstances of the complete integration within the European Union structure, global economy can be related to other social factors, which shall continue and extend the context of certain new requirements and opportunities in the field of employment policies. Under these circumstances, the globalized economy becomes a major dimension of a globalized world, in which major problems of mankind become global problems and impose the connection between the globalized and local solutions, thus creating a new context for employment policies. The information society represents a new stage of human civilization, a new way of life that implies intensive use of information in all domains of human activity and existence, with a great economic and social impact. The information society gives its members large access to information, a new method of work and a way of knowledge; it amplifies the possibility of economic globalization and the increase of social cohesion. In a society under globalization, in which information is global, the employment policies must become global itself, and that is the reason why, the work in a team is the most important part of training. The globalization compels the organizations to redefine the employees’ skills and competence, their specific work tasks and the marketing approaches. A progressive tendency is represented by the reduction of the products’ prices, of the services offered by manpower which is also cheap. The experts believe in the rivalry between the human capital in the developing countries and that in the western ones, the first being visibly more accessible due to the low retribution.
Fig. 1. Managerial variables monitoring threshold level profitability Source: Irina Isaic-Maniu, Masurarea si analiza statistica a riscului in Romania, Editura ASE, Bucuresti 2005 Today's business environment is similar in many respects to the European one. The main forces that create change are represented by: the digital revolution, the explosion of knowledge, business globalization, decentralization and privatization spread worldwide, increasing speed of change and reduced cycle time, convergence industries and less clear boundaries between industries, Internet and resulting deleveraging, increased competition cooperation, sensitivity to environmental issues and other social forces and overabundance of capital. Thus, faced with the needs of a dynamic business environment more easily through flexible organizational structure and oriented optimally contrasted with public bodies makers not to modernization and improvement works. At company level, risk reflects the possibility that the likelihood that financial and economic results evolve in a manner that can lead to bankruptcy, so the default. The sensitivity of the economic outturn operating risks each company makes an investment more or less risky. Risk assessment is a requirement of management as a function of monitoring risk factors and initiate measures to prevent, limit or counteract their effects. Therefore, Enhancing the complexity and dynamism of socio-economic activities fueled by contemporary Scientific and technical revolution, the deep economic and social policy changes is in the process of development Requires a new vision on how the perception of risk and, simultaneously Creating the organizational process for Implementing a functional and effective risk management and promoter of culture favoring the Implementation of organizational risk management process.
3. THE ECONOMIC RISKS FOOTPRINT-OUTLINING THE HUMAN CAPITAL EMPOWRING CONTEXT The relevant aspect, from this point of view, as the change is a permanent characteristic of humankind, consists in the establishment and development of new processes, which generate radical changes in the configurations of the workforce and the socioocupational and socioprofesional structures. These new processes are, in fact, the expression of new types of social actions promoted by various social actors, which hold various places in the power relations. Analyzing today’s world processes and tendencies, we shall highlight the complementary processes sets with the alternative and opposition elements. But still profitability stands for the central pillar of the organizational managerial viability. As we have ponited out in the next lines, the risk of profit can be analyzed from two angles: 1. the enterprise as socio-economic organization driven by the intention to increase heritage and appropriate remuneration of production factors; 2. outside financial investors interested in achieving the best investment in financial market conditions with many areas of different degrees of risk and return. First, in terms of economic risk analysts belonging to the enterprise or profit variability are due to changes in activity levels and therefore the company's business position to neutral. Variability profit from a change in the level of activity of the company is called generally elasticity coefficient and, in particular, operating leverage. As a measure of the activity is retained turnover (CA) characterized by a certain amount of variable costs (V), the fixed costs (F), including depreciation, and profit (P), and by a certain threshold of return (dead point- PM). It concludes that economic risk is even greater, as the variability of turnover is higher and the more margin on variable costs (l - v) is higher. Elasticity is also called operating leverage can be calculated as the ratio of the change in operating profit (Ap) to the variation in turnover (ΔCA), so that marginal profit. This relationship can highlight influence on the profit position of the company to break even (or neutral = PM):
ΔP P0 ΔCA CA0
CA0 (1 v ) = CA0 (1 v ) F0
Δca (1 v ) ΔF CA0 (1 v ) F0 ΔCA CA0
ΔCA0 (1 v ) CA0 (1 v ) F0 ΔCA CA0
F 1 v
Now we know that the relationship is breakeven (PM) and then operating leverage is determined as follows: e = economic risk which shows the dependence of variation of turnover and its relative position to break even: e =
CA0 the turnover is removed CA0 PM
from breakeven, the company is less risky (near breakeven company is more risky).
In conclusion, the economic risk is directly proportional to the size of fixed costs and turnover close to breakeven. Moreover, the corporate management term is acting to reorganize the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Alternate reasons for restructing include a change of ownership or ownership structure, demerger, or a response to a crisis or major change in the business such as bankruptcy, repositioning, or buyout. Restructuring may also be described as corporate restructuring, debt restructuring and financial restructuring. Executives involved in restructuring often hire financial and legal advisors to assist in the transaction details and negotiation. It may also be done by a new CEO hired specifically to make the difficult and controversial decisions required to save or reposition the company. It generally involves financing debt, selling portions of the company to investors, and reorganizing or reducing operations. The basic nature of restructuring is a zero sum game. Strategic restructuring reduces financial losses, simultaneously reducing tensions between debt and equity holders to facilitate a prompt resolution of a distressed situation. The nedeed steps: ensure the company has enough liquidity to operate during implementation of a complete restructuring, produce accurate working capital forecasts, provide open and clear lines of communication with creditors who mostly control the company's ability to raise financing, update detailed business plan and considerations. 4. MANAGEMENT OF PROFITABILITY THRESHOLD VARIABLES IN TERMS OF HRM
Analysis of the effects of evolution policies and strategies on capitalizing human resources, the amplification emphasizes the role of socio-economic management in all activities as a prerequisite for accomplishment of political transformation, economic, social, scientific is necessary, to increase efficiency at all levels of society, corresponding to major opportunities offered by the current financial and economic developments. The last decades have witnessed at least two fundamental and in many ways contradictory developments in the international order. We have the liberalization of trade and finance, the remarkable advance in technology of information and communication and the creation of the global market on one hand, and the increase of new actors, including many transnational non on one hand â€“ governmental organizations, active in areas of human rights, labor standards and the environmental protection on the other hand. Nowadays, the multinational corporations are eager to pursue the opportunities of global economic integration. They have become aware of the insecurities that their actions induce, so they try to find strategies to be on top. Among these strategies, the companies often stress the importance of training, which is not a neutral, invisible process, but a way of developing skills and competencies in order to become the top level entities. The big challenge is yet working not just in a team, but in a multicultural team of trainers. We intend to bring up an overview of issues which can help teams build some sustainable relationships and erase the difficulties they face during the training process It marks the beginning of a new era in its socio-political and administrative. Therefore, flexibility and optimize specific activities of central and local government is now no longer a prerequisite for membership but requires context management adimistrative raising the level of a European state.
The methods of learning and many others ways to access information offer opportunities to expand our horizons. In order to survive in today’s changing world, with a global business environment and instantaneous access to information, we must continue to learn how to adapt and maximize our own growth potential. As technology evolves, new knowledge, skills, and abilities are created every day. An undergraduate or advanced degree earned tomorrow will incorporate many new aspects that were not even blips on the radar ten years ago. How then, to further our individual development? We must begin to see learning as more than just a formal education process and embrace continuing education and lifetime learning. There are many options to choose from when seeking to further knowledge of a particular area. Most commonly, people will look to a formal educational environment. More and more university programs are offering specialized degrees to students in areas such as project management, procurement, information assurance, and specialized engineering curriculum such as genetic or optical engineering. These programs and many more are wonderful opportunities for students to immerse themselves in a traditional learning environment. For students that are working and have scheduling constraints, many colleges and universities are now offering evening and online classes. All offer the chance to exchange ideas and develop new competencies. The relevant aspect, from this point of view, as change is a permanent characteristic of humankind, consists in the establishment and development of new processes, which generate radical changes in the configurations of the workforce and sociooccupational and semiprofessional structures. These new processes are, in fact, the expression of new types of social actions promoted by various social actors, which hold various places in the power relations. Analyzing today’s world processes and tendencies, we shall highlight the complementary processes sets with the alternative and opposition elements. More so, European organizations are supporting the assessment and recommendations of the European comisiuniilor goes to reducing and eliminating activities that generate risks in the development of public services and to implement those types of administrative strategies, the experience proved to be beneficial public machine. Today’s world is characterised by permanent changes in all fields of activity, especially in the social and economic domain, which has known an alert rythm of change. We are thus witnesses to the transition to a knowledge-based economy, and here are some relevant factors to be taken into consideration: the accession to the European Union, the increase of the minimal national wage, the introduction of calculation indexes of the minimal national wage according to the level of professional training, the obligation of appointing a person for a certain job according to the education requirements of the respective position (higher education, highschool education, unskilled workmen), to the apparition of social groups which promote the new processes and modify the changing tendencies.
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The School of Management-Marketing of the Romanian-American University prides itself that as ambitious newcomers in the educational field, w...
Published on Sep 3, 2012
The School of Management-Marketing of the Romanian-American University prides itself that as ambitious newcomers in the educational field, w...