221 10 3494 https://omeka.ibu.edu.ba/files/original/10752d9818d3397e19894a506918d544.docx 7be506ade89423961c750a996e182294 https://omeka.ibu.edu.ba/files/original/b51f8df2c21dc916fe9ad27abf392713.pdf cfef525dda3d245b09e8a9bcbd4f2d3a PDF Text Text Public and Private Universities in Bosnia and Herzegovina Muhammet Sait Dinc International Burch University Bosnia and Herzegovina sdinc@ibu.edu.ba Abstract: Universities are educational institutions where students get knowledge, training and improve their talents before starting professional life. The increase in unemployment rate in especially developing countries has made the quality of education at the universities an agenda. While public universities which has proven itself in the quality education with experienced academicians were adequate for students in last decade, today, private universities with better infrastructures and education opportunities have been established. Bosnia and Herzegovina (B&H) is one of the developing and transitional countries in Eastern Europe. Before ethnic and political tensions of 1990s, the number of public universities was eight. After Dayton agreement in 1995, 34 private universities have been founded following the conflict years. Demographical differences in public and private universities after the conflict years and the impact of these differences on their performance have attracted curiosity. In this regard, the purpose of the study is to make an exploratory analysis at public and the private universities in B&H. 515 surveys were collected from academics and administrative staff at these universities in B&H. Descriptive analysis was used to give demographic information about public and private universities in B&H. Keywords: the public universities, the private universities, Bosnia and Herzegovina. 180 �180 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2659 Title A name given to the resource Public and Private Universities in Bosnia and Herzegovina Author Author DINC, Muahmmet Sait Abstract A summary of the resource. Universities are educational institutions where students get knowledge, training and improve their talents before starting professional life. The increase in unemployment rate in especially developing countries has made the quality of education at the universities an agenda. While public universities which has proven itself in the quality education with experienced academicians were adequate for students in last decade, today, private universities with better infrastructures and education opportunities have been established. Bosnia and Herzegovina (B&H) is one of the developing and transitional countries in Eastern Europe. Before ethnic and political tensions of 1990s, the number of public universities was eight. After Dayton agreement in 1995, 34 private universities have been founded following the conflict years. Demographical differences in public and private universities after the conflict years and the impact of these differences on their performance have attracted curiosity. In this regard, the purpose of the study is to make an exploratory analysis at public and the private universities in B&H. 515 surveys were collected from academics and administrative staff at these universities in B&H. Descriptive analysis was used to give demographic information about public and private universities in B&H. Keywords: the public universities, the private universities, Bosnia and Herzegovina. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2014-04 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/0cc13608ed0edfebfb768026085fc02f.pdf 4146e7ee9ca8aefa2def3964da2f8721 PDF Text Text Public Awareness towards Environmental Issues in Turkey Hasan AKC A Gaziosmanpasa University, Faculty of Agriculture Department of Agricultural Economics Tokat, Turkey akcahasan@yahoo.com Cetin KAPLA N Gaziosmanpasa University Dincerler School of Tourism and Hotel Management, Tokat, Turkey kaplancetin@hotmail.com M urat SAYILI Gaziosmanpasa University, Faculty of Agriculture Department of Agricultural Economics Tokat, Turkey muratsayili@yahoo.com Abstract: This study presents public awareness of environmental issues in Tokat province of Turkey. The effective sample size was 300. Questionnaire was carried out between January and May 2008. Chi-square test (χ2) was used while analyzing the relationship between socioeconomic characteristics and environmental conscious. Statistically significant relationship was found between separating domestic waste at home and education level (χ2 =19.493, df=12, P=0.077). Similarly, there was a statistically significant relationship between gender and separating domestic waste at home (χ2 =8.276, df =3, P= 0.041). This study revealed that no statistically significant relationship was found between occupation of the respondents and separating domestic waste at home (χ2 =25.039, df=18, P=0.124), nor between area of residence and separating domestic waste at home (χ2 =13.640, df=9, P=0.136). Keywords: Environmental issues, public awareness, Turkey Introduction Up to last quarter of 19th century, environmentalimpact of economic activities has been small enough for the natural environment to recover unaided. However, impact of human beings on the environment has grown rapidly and steadily since the industrial revolution. Recently, the environmental impact of human activity has increased beyond the Earth's abilityto recover (RICOH 2003). Atthetime ofthe Stockholm World Environment Congress in 1972, human beings were mainly concerned about environmental pollution damage to nature. Afterwards, people were gradually aware of the damage to human health. Consequently, more and more people became concerned about the environment (Xi et al. 1998). After Chernobyl disasterin 1986, the environmental movement accelerated its global-local responsiveness. Today's environmental movement has matured. It started out saying: Think globally, actlocally. Now it's: Think and actlocally;think and act globally (Warshal 2001). Climate change, desertification, deforestation, depletion of the ozone layer, transboundary air pollution, solid waste management, sea pollution, transport of hazardous waste, over-consumption of natural resources, loss of bio diversity especiallyinthe rain forests ofthe Amazon, Africa and Asia are examples of environmental issues thatthe world faces (Decamps 2000, Joubert 2001). Development of environmental awareness in Turkey has coincided with the development of democracy and human rights. The unifying dimension of environmentalism in Turkey is significant. Under mottos such as “One World” or “We are allin the same boat”, members of different cultural backgrounds have gathered on the same platform to work forthe protection ofthe environment,joining theirforces and energies for a better planet and brighter future (Ozdemir 2005). Tokat province was chosen as research area because it was one of the 17 provincial centres (out of 81 provinces) with high concentrations of sulphur dioxide (SO2) in Turkey. According to SO2 concentrations, obtained from the measurement stations in January 2007 compared to the previous January, Target Limit Value (150 µg/m3) was exceeded in Tokat while First Warning Level Limit Value (700 µg/m3 ) was not exceeded 439 �(TURKSTAT 2007). On the other hand, some major projects have been implemented by local governments to solve environmental problems in the city and to live a clean and healthy environment for future generations. Number of studies analysing the relationship between socio-demographic characteristics of both urban and rural dwellers and environmental issues are very limited. Therefore, this study aims at explaining public awareness towards environmentalissues in Tokat province of Turkey. Material and Methods A survey of randomly selected people living in Tokat province (828 027 residents) of Turkey was conducted to determine their awareness and knowledge of sources of environment. The survey delivered 320 questionnaires and the effective sample size was 300. It was conducted in the months of January-May 2008. Chi-square test (χ2) was used while analyzing the relationship between socio-economic characteristics of people and environmental conscious. A 0.05 level of significance was employed for all tests in the study. Algebraically χ2 teststatisticis given as follows (Gujarati 1995, Mirer 1995): χ 2 = ∑i =1 k (Oi − Ei ) 2 Ei W here Oi isthe observed frequency in class orintervali and Ei isthe frequency expected in classi on the basis of the hypothesized distribution, say, the normal. If the null hypothesis is correct, χ2 has a chi-square distribution with (r-1)(c-1) degrees of freedom (df), where r is the number of rows and c is the number of columns in the main body ofthe contingency table. Results and Discussion A mong the sample population, 62.3% were male. The professions of the respondents were government employees (17.7%), retired people (6.4%), housewife (15.3%), workers in industry and manufacturing (15.0%), student (20.3%), people engaged in agriculture/fishing/livestock (12.3%), and business/tradesman (13.0%). Educational backgrounds of the questioned people were primary school (15.7%), secondary school (14.3%), high school (31.7%), vocational college and faculty (31.0%), and postgraduates degrees (Master and PhD) (7.3%). Nearly 70% of the respondents live in city centre. The rest live in district(11%), town (8%), and village (11%). Inthe study, 13 environmental problems werelisted and respondents were asked to selectthe most serious problems atlocal, country and globallevel (Tab. 1). Environmental Problems Tokat Turkey W orld Garbage Problem 81.3 32.3 39.3 Air Pollution 63.3 43.3 50.6 Water Pollution 82.6 47.3 39.0 Noise Pollution 58.3 49.6 39.3 Soil Pollution due to excess agrochemicals usage 47.6 61.6 34.0 Use of Agricultural Lands forDifferent Aims 50.0 64.0 30.0 Unplanned Urbanisation 69.6 59.3 21.0 Destroying Natural Resources 49.0 40.6 41.0 Global Warming 32.0 44.6 82.3 Ozone Depletion 26.3 36.0 81.3 Radiation Problem 18.0 45.0 69.6 Devastation 18.3 30.0 63.0 Erosion 36.0 69.0 51.3 Table 1: Most serious environmental problems atlocal, country and the world level (%) According to respondents, global warming, ozone depletion,radiation problem, and devastation were the most serious environmental problems in the world. As far as Turkey is concerned, erosion, use of agricultural lands for different aims, and soil pollution due to excess agrochemical use are main environmental problems at country level while water pollution, garbage problem, and unplanned urbanisation were severe environmental problems atlocallevel. These resultsare paralleltotheliterature. For example, Onder(2006) statedthatthe most serious environmental problems are ozone depletion and global warming in the world; unplanned urbanisation and depletion of natural resources in Turkey. Esengun et al. (2006) questioned 16 governmental and NGOs in 440 �Tokat province to determine their views on environmental problems. Findings indicated that air pollution is the most environmental concern,followed by domestic waste,soil pollution,lack of a centralcontrol system, illegal construction, unplanned organisation,lack of green areas, water pollution, waste water, use of agriculturallands for unsuitable aims, deforestation, and noise pollution. Inadequate financial resources,lack of trained personnel and inadequate environmentallegislation are the main weaknesses in dealing with environmentalissues. The authors asked people whetherthey know “World Environment Day (June 5)” or not.More than threefourths of respondents answered with “no” and only 22.7% with “yes”. Another question was “whether being heard a campaign thatis a pine treefor people who collect20 batteries” or not?. Only 37.7% ofthe respondents said they heard this campaign but 62.3% did not heard. Respondents were asked to identify reasons for water pollution in “Yesilirmak River” in Tokat province. According to respondents, water pollution is associated with litter storing place along the river (41.3%) and waste ofleather processing plants established nearthe river (32.0%). Other pollutants were animal wastes caused by livestock farms (12.0%) and domestic wastes (9.3%). The remaining (5.4%) said they had no idea. A significant number of interviewees say that obeying hunting rules (74.3%), destruction of forest areas (58.3%), agrochemicals(52.0%) and decreasing number of wetland (22.0%) are mostimportantfactors affecting decrease inthe number of wild animalsinthe research area. People were asked: “Which actions can be active in environmental conscious?” People chose more than option for this question. Education within the family (74.6%) and at school (71.3%), and television & radio programs (68.6%) came first,second and third on the list. Otherimportant actions were determined as magazine & newspaper (38.0%), NGO activities (32.6%), legal regulations (20.0%), and training at working place (20.3%). Respondents were asked to identify the actors having power for environmental conservation. Questioned people ranked them as municipality (1st), governorship ofthe province (2nd),family (3rd),N G Os (4th),and Media (5th), University (6th), and Health Organisations (7th). Only 4.6% said they had no idea. To determine the attitudes of the people towards environmental issues following question “How would you liketo be a part ofthe environmental conservation activities?” was asked. More than half ofthe respondents (52.7%) indicated thatthey could attend environmental protection activities voluntarily. Nearly one-fifth (22.3%) of the people do not want to attend any environmental conservation activities. In the sample, 21.3% answered “donation”. Only 3.7% of the sample said they could pay extra tax. In a study of rural population and environmental relations, Gokce (1997) found that 57.9% was willing to donate part of his income, 35.0% is willing to give extratax and 68.1% thought government should meetthe expenses. The question “whatis your reaction against people who pollutethe environment?” was asked the sample in order to probe their environmental attitude towards environmental issues. Nearly two-thirds of the respondents (64.7%) said that they prefer warning the people polluting the environment politely while 22.7% do not warn the polluters. The rest(12.6%) preferto make formal complaintsto government administrators orlegal institutions. Television, newspaper, and internet were the most com mon used information sources towards environmental issues by respondents (Tab. 2). This was line with previous studies (Onder 2006, Ostman & Parker 1985, Chan 1998, Haron et al. 2005). Information Source (*) Number % Newspaper 195 65.0 Journal 60 20.0 Television 281 93.6 Radio 98 32.6 Extension staff 30 10.0 Internet 125 41.6 Friend 84 28.0 Governmental Organisations 18 6.0 N G Os 34 11.3 School 43 14.3 Brochure 33 11.0 Table 2: Information sources about environmentalissues (*) More than one answer Particularly television was shown to be a powerful instrument for changing public attitudes (AbdulWahab 2008). Christine (1990) found that news programs were effective at increasing level of environmental knowledge among those who watched the program. Schultz (1994) reported the role of mass media in recognition of environmentalproblems. Respondents were asked to whetherthey heart and know meaning of 11 environmental concepts (Tab. 3). 441 �The issues people heart and knew most were recycling (80.00%) and organic farming (79.33%). Sustainable development (39.67%), rain forests (39.33%), acid rain (39.33%), and Rio Conference (38.67%) were issues which a high proportion of questioned people heard but did not know its meaning. Great majority of the respondents (85.33%) had notheard of externality before. I heart and know I heart but do not know Concepts its meaning its meaning I did not heartit Sustainable Development 44.67 39.67 15.66 Organic Farming 79.33 11.67 9.00 Rain Forests 17.67 39.33 43.00 Green Peace 24.00 32.67 43.33 Acid Rain 19.33 39.33 41.34 Externality 4.67 10.00 85.33 Recycling 80.00 9.33 10.67 Brundland Report 4.33 27.00 68.67 Rio Conference 9.33 38.67 52.00 Ecosystem 56.67 10.33 33.00 Biodiversity 54.33 24.00 21.67 Table 3: Whether knowing meaning of some words related to environmentalissues (%) People were asked to choose between scenarios where (A) establishment of a factory first,considering the environment later;(B) considering the environment first, establishment of a factory later; and (C) establishment of a factory and environmental protection have the same priority. The results showed that 62.67% of the respondents consider the environment a high priority, while 21.00% of the people chose establishment of a factory as a top priority. Only 16.33% of the sampled people chose both first. This means that most of the questioned people reject approaches based in ignoring environmental conservation while establishment of a factory in orderto produce new products and create new employment opportunity for unemployed people. Literature review shows that public awareness of environmental problems has typically been associated with different socio-demographic variables such as age, income, social statutes, gender, education, area of residency (rural or urban), occupation, origin (immigrant or non-immigrant), and political ideology (Girdner & Akis 1996, Stern et al. 1993, Guagnano & Marke 1995, Swarnakar & Sharma 2006, Akca et al. 2007). It was hypothesized that there is a relationship between separating domestic waste at home and four demographic variables (gender, residence area, occupation and education). Statistically significant relationship was found between separating domestic waste at home and education level of respondents (χ2 =19.493, df=12, P=0.077). This was line with literature. Scott & Willits (1994) found that environmental attitudes and behaviour are strongly related to education. Similarly, there was a statistically significant relationship between gender and separating domestic waste at home (χ2 =8.276, df=3, P=0.041). However, Girdner & Akis (1996) did notfind any relationship between sex of the respondent and reusing empty bottles. No statistically significant relationship was found between occupation of the respondents and separating domestic waste at home (χ2 =25.039, df=18, P=0.124), nor between area of residence and separating domestic waste at home (χ2 =13.640, df=9, P=0.136). Conclusion Today, people living in both urban and rural areas are paying more attention to activities that reduce damage to the global environment,including the sorting of waste,recycling, and prevention of global warming. Manufacturers face such challenges as promoting smaller products with longer lifecycles, energy conservation, and resource recycling, as well as providing the maximum benefit to society and companies with minimum resources. Global companies as well are expected to support and promote the awareness of environmental conservation in developing countries and regions so that they can achieve economic progress with minimum environmental impact (RICOH 2003). In this context,there is a need to explain what the situation is in Tokat province in terms of environmental protection. In 2005, three Municipalities in Tokat province prepared Infrastructure Projects focusing on “Rehabilitation of Old Landfill and Left Flow Direction of Yesilirmak River in Central County of Tokat”; “Rehabilitation and Extension of Drinking Water Supply, Transmission and Storage Facilitiesin Turhal County”; and “Elimination of Nitrogen inthe Refuse Waterin Erbaa County through Research and Design”. They were awarded by the EU in the context of Regional Development Program me in 2006. Another study isto establish a Solid Waste Storing and Processing Plantin Tokat province. Municipalities signed a finance agreement through credit with international sources. In addition, project related to supplying natural gas to Tokat started in April 2007 instead of using coal and wood for heating. Itis expected that use of natural gasinthe future willsignificantly reduce pollution in terms of Sulphur Dioxide (SO2 ) and Particulate 442 �Matter(PM). On the other hand, Turkish government started toimplement KOYDES Projectin ordertoincrease environmental quality of rural areas.In the context, many projectsthat cover supplying clean drinking water to 148 villages, development of soil and small waterresources in 12 villages,sewerage systems in 33 villages have been carried outlocal administrations.It can be said that Tokat province would solve biggest parts of the major environmental problems and breathe clean airifthese projectsimplemented successfully in both rural and urban areas in the short or medium terms. References Abdul-Wahab, S.A. (2008). A preliminary investigation into the environmental awareness of the Omani Public and their willingness to protect the environment. American Journal of Environmental Sciences, 4 (1), 39-49. Akca, H., Sayili, M., & Yilmazcoban, M. (2007). Rural dwellers’ awareness to environmental issues: the case of Turkey. Polish Journal of Environmental Studies, 16 (2), 177-182. Chan, K. (1998). Mass media and environmental cognition in Hong Kong. Proceeding of ICA/NCA conference, Rome, July 15-18. Christine, C. (1990). The impact of television on public environmental knowledge concerning the Great Lakes. Master’s Thesis, Ohio State University. Decamps, H. (2000). Demanding more of landscape research (and researches). Landscape and Urban Planning, 47 (3), 105109. Esengun, K., Sayili, M., & Akca, H. (2006). Perceptions of environmental issues in a Turkish province. Polish Journal of Environmental Studies, 15 (4): 635-642. Girdner, E.J., & Akis, S. (1996). Environmental attitudes in Northern Cyprus. METU Studies in Development, 23 (4), 477508. Gokce, O. (1997). Rural population-environment relations and a case study from Turkey. Turkish Journal of Agriculture and Forestry, 21, 413-418. Guagnano, G.A., & Marke, N. (1995). Regional differences in the socio-demographic determinants of environmental concern. Population and Environment, 17, 135-150. Gujarati, N. (1995). Basic Econometrics, NY: McGraw-Hill Inc. Haron, S.A., Pain, L., & Yahaya, N. (2005). Towards sustainable consumption: an examination of environmental knowledge among Malaysians. International Journal of Consumer Studies, 29 (5), 426-436. Joubert, F. (2001). The need for harmonisation between sustainable development and the implementation of a global environmental law regime. In Sustainable development international, London: ICG Publishing Ltd. Mirer, T.W. (1995). Economic statistics and econometrics. NY: Prentice-Hall Inc. Onder, S. (2006). Environmental pollution and solution recommendations of Konya city, Turkey. Journal of Applied Sciences, 6 (4), 864-871. Ostman, R.E., & Parker, J.L. (1985). Awareness of, concern for, and perceived lifestyle effects of environmental messages in television and other mass media. Proceedings of the Popular Culture Association. Ozdemir, I. (2005). The development of environmental consciousness in modern Turkey. In Environmentalism in Muslim World. NY: Nova, 17-36. RICOH (2003). Pursuing the ideal society (www.ricoh.com/environment/management/earth.html). Schultz, C.J. (1994). The role of the mass media in extension and interpretation. International Journal of Environmental Education, 13 (4), 371-384. Scott, D., & Willits, F.K. (1994). Environmental attitudes and behaviour: A Pennsylvania survey. Environment and Behavior, 26 (2), 239-260. Stern, P.C., Dietz, T., & Kalof, L. (1993). Value orientations, gender and environmental concern. Environment and Behavior, 25, 322-348. 443 �Swarnakar, P., & Sharma, A.K. (2006). Understanding environmental concern: A study using new environmental paradigm scale (www.iipsindia.in/abstractfiles/200682123437_01_swarnakar_sharma_IIPS2006.doc). TURKSTAT (2007). Press release of Turkish Statistical Institute on air pollution. Available on 29 March 2007. (www.turkstat.gov.tr/SONIST/CEVRE/290307.doc). Xi, X., Fan, L., & Deng, X. (1998). Public environment awareness in China: An analysis of the results of public surveys. The Centre for the Integrated Study of the Human Dimensions of Global Change, Carnegie Mellon University. Warshal, P. (2001). A whole earth view of the environmental movement. GBN Global Business Network Inc. (www.gbn.com/ArticleDisplayServlet.srv?aid=1125). 444 � https://omeka.ibu.edu.ba/files/original/6759f447993572815d30ac06f5385e9b.doc c1b4f51bacd10f705085148dbf0090cb Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 525 Title A name given to the resource Public Awareness towards Environmental Issues in Turkey Author Author Akca, Hasan KAPLAN, Cetin SAYILI, Murat Abstract A summary of the resource. This study presents public awareness of environmental issues in Tokat province of Turkey. The effective sample size was 300. Questionnaire was carried out between January and May 2008. Chi-square test (χ2) was used while analyzing the relationship between socioeconomic characteristics and environmental conscious. Statistically significant relationship was found between separating domestic waste at home and education level (χ2 =19.493, df=12, P=0.077). Similarly, there was a statistically significant relationship between gender and separating domestic waste at home (χ2 =8.276, df =3, P= 0.041). This study revealed that no statistically significant relationship was found between occupation of the respondents and separating domestic waste at home (χ2 =25.039, df=18, P=0.124), nor between area of residence and separating domestic waste at home (χ2 =13.640, df=9, P=0.136). Date A point or period of time associated with an event in the lifecycle of the resource 2009-06 Keywords Keywords. Conference or Workshop Item PeerReviewed Q Science (General) https://omeka.ibu.edu.ba/files/original/bd3a7f408161e05028bd57ae792cd56d.pdf 2d8dbaebe8b8ad1152f270344a6922d6 PDF Text Text 2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Public Expenditure and Political Business Cycles inTurkey Recep TARI Faculty of Economics and Administrative Sciences, Department of Economics, Kocaeli University, Turkey rtari@kocaeli.edu.tr Filiz ÖZKAN Kaynarca Vocational School, Department of Economics and Administrative Sciences Sakarya University, Turkey fozkan@sakarya.edu.tr Abstract: According to the theory of ―Political Business Cycles (PBC)‖, politicians prefer to pursue opportunistic policies in order to increase their chance of election. For this reason, they apply expansionary policies before the elections. Hence, they start to do this by increasing public expenditures. There is an increase in the indicators of money parallel to the increase in public expenditures. In this study it is examined that whether there have been appropriate developments in terms of PBC theory during the elections of six congressmen in the period after 1980. In order to determine the effect of PBC ―the traditional opportunistic model‖ from Nordhaus is used to test the PBC effect. ―The opportunistic model‖ from Nordhaus is tested through the autoregressive analysis method which is used by Alesina, Cohen and Roubini (1991,1992) in their studies for the OECD countries and industrial countries. The results obtained as a result of the empirical analysis support the PBC theory. Introduction The history of economics is the history of debates between the ones who claim that the government intervention is necessary and who claim that it is unnecessary. In the framework of these debates, applications of both of these approaches are observed due to the economic conditions of each period. However, there is a fact which should be accepted that every day the state intervenes in the economic life with different reasons and through various legal and institutional regulations. If the economists are not able to put their developed theories into the application, then they just do brain gymnastic. Thus, this situation is seemed during many years and this distinction between economics and politics give the idea to the politicians that they can arrange the economic life according to their own vote calculations. This idea becomes widespread along with the economists isolate themselves from the legal and institutional structure of the society (SavaĢ, 1997). Especially in the developing countries with a less institutional and legal structure, the public share in the economy is more than others. Through the political instabilities it is understood that the financial issues are not the only reason of this situation. In the beginning the state is seem as maintaining the social order and it is associated with the Leviathan which is a superhuman being, whereas later it is seen that the state is transformed to a monster that gives harm to its environment. Especially, after the Second World War the rapid increase in the contribution of state in the economic life is defined as a very big danger (Erim, 2007). If being away from the economic life is impossible for the state, at least there should be a limit of this contribution. Politics and political institutions should be accepted as endogenous rather than exogenous in the economic theories. After the long historical development process from this view, the Political Economic Theory (PET) is developed. According to the PBC theory economy is manipulated by policy makers during the electoral periods since politicians behave with political interest mostly in these periods. If the politicians are not restricted enough with the laws in terms of their usage of economic policy tools, they prefer to pursue opportunistic policies instead of policies for the interest of the public. In order to affect electorates, they mostly increase public expenditures. The financing of the increased public expenditures is funded through increasing the money supply instead of increasing taxes since taxes are not pleased by the electorates (Azgün, 2006). In this study, it is examined that whether the PBC has an effect on the money variables of public expenditures, money supply and money in circulation during the general elections of six congressmen in the period after 1980 in Turkey. ―The traditional opportunistic model‖ of Nordhaus is used in order to test the effect of PBC. ―The opportunistic model‖ from Nordhaus is tested through the 471 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo autoregressive analysis method which is used by Alesina, Cohen and Roubini (1991, 1992) in their studies for the OECD countries and industrial countries. Political Business Cycles Models The concept of Political Business Cycles is firstly used by Nordhaus. According to Nordhaus, by aiming vote maximization politicians pursue expansionary policies before the elections in order to boost the economy whereas they pursue contractionary policies after the elections in order to remove the effects of these expansionary policies. Therefore, a cycle occurs in economy due to the electoral periods (Nordhaus, 1975). When the studies related with Political Business Cycles is examined it is observed that the literature regarding to this issue is developed on two cycles. The first one is ―traditional model‖ that is considered in two categories and the first of these is the opportunistic model developed by Nordhaus and the second one is the partisanship model developed later by Hibbs (Hibbs, 1977). According to opportunistic model, politicians do not have partisan objectives, they just appeal all kinds of manipulations in order to win elections. According to partisanship model, politicians try to gain votes of their own electoral group by implementing ideological policies. Secondly, in the framework of ―rational expectations theory‖ which is popular in 1980s, the PBC theory has been developed as a ―modern approach‖. With the acceptance of rational expectations theory, the PBC theory is criticized at the beginning. However, as a result of the empirical studies positive findings are obtained regarding to that the PBC theory can still be explanatory even though the rational expectations theory is valid. According to the modern PBC theory, because of the asymmetric information between the governments and citizens governments continue to exhibit opportunistic or partisanship behaviors. Methodology In this study, in order to determine whether the politicians pursue opportunistic policies or not in the electoral periods, the autoregressive analysis method is used which is applied by Alesina, Cohen and Roubini (1991,1992) in their studies for the OECD countries and industrial countries (Alesina, 1991). The autoregressive models are preferred instead of the structural models regarding each macroeconomic indicator which is due to the reason that by testing each variable with the same model it is aimed to decrease the probability of difference that can be arisen from modeling error in the determination of the effect of electoral periods. Furthermore, in the literature it is emphasized that structural models are mainly valid in the developed countries with strong economy whereas their validity is questionable in the less developed and developing countries with fragile economic system (Özkan, 2005). General notation of the autoregressive model which is used in this study is as in the following: Yt = α0 + α1 Yt-1+ α2 Yt-2+……+ αn Yt-n+PBCDUMMY + εt (1) Here, Yt represents each macroeconomic indicator. PBCDUMMY is the dummy variable that indicates the dynamic implications of the theory of political business cycles. PBCDUMMY is defined as ―1‖ for the election quarter and three quarters before the election, and defined as ―0‖ for other periods. εt represents the error terms. The lagged values of autoregressive model is determined through the ―from general to special theory‖. The stability of series is examined through the ADF unit root test (Dickey and Fuller, 1990). The Jarque-Bera(JB) test is used in order to test whether the normality assumption, which is one of the necessary assumptions to perform autoregression analysis, is satisfied or not (Bera and Jarque, 1981). After these models are tested, through the Breusch Godfrey (LM) test it is checked whether there is an autocorrelation between the error terms or not (Godfrey, 1988). For error terms having constant variance is another necessary condition for autoregression analysis. The ARCH LM test is used in order to determine whether the error terms have constant variance or not. Test Results Unit Root Analyses Result When the graphic of public expenditures series in real terms is examined, seasonal effects are observed in the series. It is observed that the coefficients are significant in the regression analysis which is performed with the seasonal dummy variables. The seasonality effects are removed from the series and the stability of the series is checked with the ADF test. As seen on Table 1, the real public expenditures series which does not include seasonal effects is not stable as its degree. It is seen that the yearly percentage change of series is stable with 0.05% significance level according to the ADF model which has a constant term and trend. 472 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo 12000000 150 10000000 100 8000000 50 6000000 0 4000000 -50 2000000 0 -100 88 90 92 94 96 98 00 02 04 06 08 88 90 92 KAMUHARREEL 94 96 98 00 02 04 06 08 KAMUHARREELSAYD Figure 1: Degree of Public Expenditures and Its Yearly Percentage Change Graphics When the graphic of public expenditures series in real terms is examined, seasonal effects are observed in the series. It is observed that the coefficients are significant in the regression analysis which is performed with the seasonal dummy variables. The seasonality effects are removed from the series and the stability of the series is checked with the ADF test. As seen on Table 1, the real public expenditures series which does not include seasonal effects is not stable as its degree. It is seen that the yearly percentage change of series is stable with 0.05% significance level according to the ADF model which has a constant term and trend. 50000000 60 40 40000000 20 30000000 0 20000000 -20 10000000 -40 88 90 92 94 96 98 00 02 04 06 08 88 90 92 94 96 RELM1 98 00 02 04 06 08 RE LM1YD Figure 2: Degree of Real M1 and Its Yearly Percentage Change Graphics When the graphic of Real M1 series is examined, at first it is observed that the series is not stable. Furthermore, it appears that there can also be seasonal effect. It is seen that the coefficients are significant as a result of the regression analysis done with the seasonal dummy variables. However, when the yearly percentage change is considered the seasonality effect disappears. Furthermore, when Table 1 is examined it is seen that while the real M1 series is not stable, the percentage change is stable in all ADF models in terms of various significance levels. 24000000 60 20000000 40 16000000 20 12000000 0 8000000 -20 4000000 -40 88 90 92 94 96 98 00 02 04 06 08 88 90 REELDOLPARA 92 94 96 98 00 02 04 06 08 RE ELDOLPARA YD Figure 3: Degree of Real Money in Circulation and Its Yearly Percentage Change Graphics 473 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo When the graphic of real money in circulation is examined, it is understood that the series is not stable, however it is not certainly understood whether there is a seasonal effect or not. As a result of the regression analysis done with the seasonal dummy variables it is seen that the coefficients are insignificant, therefore it is understood that there is no seasonality effect. When the results of the unit root test is examined, it is observed that the series of real money in circulation is not stable in degree of level whereas the percentage change is stable in all ADF models in terms of various significance levels. The results of ADF unit root test, which is performed to determine the stability structures of series, are shown on Table 1. with constant term Public expenditures -2,04 Public expenditures % -1,80 M1 0,03 M1% -2,70*** Money in circulation 1,62 Money in circulation % -2,85*** %1 -3,51 Kritical values, %5 -2,89 %10 -2,58 Lag. 3 8 4 4 6 4 constant and trend -1,47 -3,79** -1,00 -4,08* 0,37 -4,90* -4,06 -3,46 -3,15 term Lag. 3 3 4 7 6 3 without constant term and trend -0,91 -0,76 0,98 -2,02** 2,12 -2,44** -2,59 -1,94 -1,61 Lag. 4 4 4 8 6 4 Table 1: ADF Test Results Autoregressive Model Analyses Results The summary of statistical values for autoregressive model examining public expenditures, money supply and money in circulation is shown on Table 2. The autoregressive models which are estimated by lagged values are as in the following: Pub.Expen. = 2,53+ 13,6 Pub.Expen. (-2) + 0,18 Pub.Expen. (-4) + 0,39 PBCdummy (0,00) (0,03) (0,08) (0,00) M1 = 7,47 (0.05) (0.00) +0,79 M1(-1) (0,01) +0,42 M1(-5) (0,00) + 0,21 M1(-7) (0,04) – 0,22 M1(-8) (0,03) +8,22PBCdummy (0,06) M.Cir. = 2,95+ 0,49 M.Cir.(-1) + 0,20 M.Cir.(-2) - 0,33 M.Cir.(-4) + 26 M.Cir.(-5) + 11,79 PBCdummy (0,41) (0,00) (0,07) (0,00) (0,01) (0,00) Independent Varieble PBC 2 R Dummy DW F probably JB LM ARCH Dependent Variable Public Money Supply α t ist. t pro αi t ist. t ol. Harcamaları i 13,6 2,17 0,03 8,22 1,87 0,06 ** *** 0,25 0,62 2,07 2,07 0,00 0,00 47,47 (0.00) 1,40 (0,49) 0,85 (0,47) 0,53(0,58) 0,92 (0,40) 0,30(0,73) Money Circulation αi t ist. t prob 11,79* 3,07 0,00 0,44 2,05 0,00 17,10 (0,00) 0,56(0,56) 1,27(0,27) Table 2: Autoregressive Analyses Results According to the regression estimate results on Table 2, it is observed that there is no autocorrelation and changing variance problems in the LM and ARCH tests. Even the normality assumption is not satisfied in the model regarding money supply since the number of observation (80) is sufficient enough and since there is no changing variance problem the regression is highly confidential. 474 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo When coefficient estimate results regarding to the examined variables are concerned, it is seen that PBCDummy coefficient is positive and significant as appropriate to the theory. This acquired result confirms the argument of the PBC theory that when the politicians try to affect the electorates they mostly use the ―public expenditures‖ as fiscal policy tool. As a result of the increase in public expenditures there is an increase in money supply and money in circulation. Conclusion Manipulating the macroeconomic policies in the direction of politic interests is one of the significant problems of Turkish economy as in the economies of many countries. In order to come to power and to establish government, politicians do not avoid using macroeconomic policies as instruments. In this study it is aimed to determine whether politicians have opportunistic behavior or not. Therefore, it is analyzed that being appropriate to the PBC theory whether there is a significant change in policy instrument variables such as public expenditures, money supply and money in circulation during the electoral periods. When the obtained results are examined it is observed that the election dummy variable regarding public expenditures, money supply and money in circulation is positive and statistically significant which is appropriate to the theory. These findings assert that governments pursue opportunistic policies in electoral periods in Turkey. References SavaĢ, V.F., (1997), Anayasal Ġktisat, Ġstanbul: Avcıol Basım Yayım. Nordhaus, W,(1975), The Political Business Cycle, The Review of Economic Studies, 42(2), 169-190. Alesina, A., Cohen G.D. & Roubini, N., (1991), Makroeconomic Policy and Elections in OECD Democracies, NBER Working Paper, National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge. Özkan, F., (2005), Döviz Kuru Öngörü Yöntemleri: Türkiye Uygulaması, Y. Lisans Tezi, Zonguldak Karaelmas Üniversitesi, Sosyal Bilimler Enstitüsü. Erim, N., (2007), Ġktisadi DüĢünce Tarihi, Ankara: Palme Yayıncılık. Azgün, S., (2006), Kamu Açığı ve DıĢ Açıkların GeliĢimi: 1980–2004 Dönem Analizi, E-Akademi Hukuk, Ekonomi ve Siyasal Bilimler Dergisi, 53(7). Hibbs, D.G., (1977), Political Parties and Macroeconomic Policy, The American Political Science Review, 71 (4), 1467-1487. Dickey, D.A. & Fuller, W.A., (1979), Distribution of the Estimators for Autoregressive Time Series with a Unit Root, Journal of the American Statistical Association, 74, 427–431. Perron, P., (1990), Testing for a Unit Root in a Time Series With a Changing Mean, Journal of Business Economic Satistics, 8(2), 19-25. Godfrey, L.G. (1988), Spesicification Test in Econometrics, Cambridge, UK: Cambridge. Bera, A. & Jarque, C. (1981), Efficient est for Normality, Heterosedasticity and Serial Indepence of Regression Residuals: Monte Carlo Evidence, Economics Letter, 7, 313-318. 475 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 249 Title A name given to the resource Public Expenditure and Political Business Cycles inTurkey Author Author TARI, Recep ÖZKAN, Filiz Abstract A summary of the resource. According to the theory of ―Political Business Cycles (PBC)‖, politicians prefer to pursue opportunistic policies in order to increase their chance of election. For this reason, they apply expansionary policies before the elections. Hence, they start to do this by increasing public expenditures. There is an increase in the indicators of money parallel to the increase in public expenditures. In this study it is examined that whether there have been appropriate developments in terms of PBC theory during the elections of six congressmen in the period after 1980. In order to determine the effect of PBC ―the traditional opportunistic model‖ from Nordhaus is used to test the PBC effect. ―The opportunistic model‖ from Nordhaus is tested through the autoregressive analysis method which is used by Alesina, Cohen and Roubini (1991,1992) in their studies for the OECD countries and industrial countries. The results obtained as a result of the empirical analysis support the PBC theory. Date A point or period of time associated with an event in the lifecycle of the resource 2010-06 Keywords Keywords. Conference or Workshop Item PeerReviewed HB Economic Theory https://omeka.ibu.edu.ba/files/original/b6af977adf3771558e0b879b23a7facb.pdf a15d3b13e611bad510f75284ce841a95 PDF Text Text Journal of Economic and Social Studies Public Procurement System in Service for Strengthening the Market Economy in Bosnia and Herzegovina Merim Kasumovic University of Tuzla, Bosnia and Herzegovina merim78@hotmail.com Sanela Meholjic-Kalajdzic Foundation for Sustainable Development Bosnia and Herzegovina s.meholjic@hotmail.com Harun Meholjic Elektroprivreda BiH, Bosnia and Herzegovina harunmeholjic@hotmail.com Abstract: Public procurement system in Bosnia and Herzegovina Keywords: Public procurement (BH) is defined by various laws and regulations and is often identified with the legal profession. However, it is actually more significant and relevant for economists and public officials. One of the key challenges remains the application of transparency to the system of public procurement in the context of strengthening market competition in BH, as well as the market economy in general. The research methods applied reveal the market strength of the contracting authorities (buyers) and market competition among suppliers (sellers) in the public procurement market in BH, as measured by their market shares. Based on the research, the connection between the market strength of contracting authorities and the level of development of competition on the public procurement market in BH in the period from 2010 to 2012 was examined in terms of choosing more or less transparent procurement procedures. Volume 6 | Number 2 | Fall 2016 system, transparency, market competition JEL Classification: H57, H44, H41, H76 Article History Submitted: 14 July 2015 Resubmitted: 23 August 2016 Accepted: 31 August 2016 http://dx.doi.org/10.14706/JECOS S16618 79 �Merim Kasumovic, Sanela Meholjic-Kalajdzic, Harun Meholjic Introduction Public procurement market represents one of the key areas for financial interaction of public and private sector. Public procurement regulations are a novelty in domestic legislation. The public procurement system in Bosnia and Herzegovina (BH) is a new system of awarding contracts in public procurement procedures, and it is based on the Act of Public Procurement of BH i (Act), which establishes the rights and obligations of participants in the procurement process as well as the control of public procurement. According to Rička et al. (2008) the purpose of this law is to ensure: (1) the most effective way of using public funds with regard to the purpose and object of the procurement; (2) procurement execution and awarding a public procurement contract that is carried out by contracting authorities in accordance with the procedures established by this act, and (3) contracting authorities will take all necessary measures to ensure fair and active competition among the potential suppliers, by applying equality of treatment, non-discrimination and transparency. The public procurement system in BH has both its theoretical and practical dimensions. While the theoretical dimension is determined by the external environment such as legal, political and economic environment, its practical aspects lie in the accomplishment of various economic goals. – This is important to all countries, especially for countries in development and transition like BH. Just like there is no system that can accomplish all goals, there is no country that can expect that goals of its system will always remain the same. The current objectives of the single public procurement system in BH (Public Procurement Agency, 2010) are: continuous execution of procedures of public procurement and transparent public procurement contract awarding, equality treatment for all participants in procedures of public procurement, encouragement of sustainable market and economic growth and ensuring legal protection at the same time. The European Commission reported that public procurement of goods, services and works, in the European Union in 2010 was estimated at 2.406 billion euros, that is 19.7% from total GDP. The public procurement stake in developing countries was even bigger and ranged from 25% to 30% from total GDP (Knežević, 2007). Therefore, public procurement is considered to be a source of economic growth stimulation, strengthening the private sector and the market economy in general (Rička et al., 2008). Countries in transition accomplish their objectives within different political and economic environments, but their common goal is to establish 80 Journal of Economic and Social Studies �Public Procurement System in Service for Strengthening the Market Economy in Bosnia and Herzegovina an efficient bureaucracy that will support creating politics and manage realization of public procurement in an economical manner, without abuse of power. Economic transition requires that a transparent and efficient system of public procurement has to be placed as a priority, so it can support demonopolisation and privatization (European Commission, 2007). Therefore, we can state that a public procurement system, based on transparency, can be in service of strengthening market competition and private sector development. However, in countries in transition, like Bosnia and Herzegovina, at the beginning stages of a market economy, there are great dangers. Bribes and similar tampering threaten real competition and may discourage and repel domestic and foreign investors, which results in a decrease of growth rate in such countries. Considering the importance and purpose of the public procurement system in BH, the question emerges, how the existing procurement system in BH is applied, and what are its effects in economic terms.That is, whether more transparent procedures for public procurement that strengthen fair market competition are applied, contributing thereby to the strengthening of the market economy in BH, and what are further restrictions on public procurement system which stand in the way of achieving a functioning market economy in Bosnia and Herzegovina? In an effort to find answers to these questions, the subject of research has been defined, and it is reflected in the assessment of theoretical and practical aspects of applying the transparency of public procurement in the context of strengthening the market economy in BH. The overall objective of this paper is to explain the importance of the principle of transparency in the public procurement system, in the context of the creation and growth of a functioning market economy. This is one of the main preconditions for the existence of market competition. Transparency System of Public Procurement in Bosnia and Herzegovina (BH) Public procurement is defined as purchasing goods, services and works by contracting parties in accordance with the rules and regulations of public procurement.They are administrative bodies and enterprises that are subjected to the Law and have to carry out the procedures for public procurement, prior to the conclusion of the public procurement of goods, services and works. Procedures of public procurement and conditions for its execution are also defined by the act, where final decision is made by the contracting authority, depending on the fulfillment of conditions defined by the act. Contract value is estimated by the contracting authority in the beginning of the procedure of public procurement, and Volume 6 | Number 2 | Fall 2016 81 �Merim Kasumovic, Sanela Meholjic-Kalajdzic, Harun Meholjic that value represents the so called value class on the basis of which the types of public procurement procedure to be applied is determined. In the act, there are two categories of value classes: • • primary i.e. domestic value classes – when the contract value is equal or greater then 50.000,00 KM in case of procurement of goods or services, and equal or greater then 80.000,00 KM in case of procurement of works; and international value classes – when contract value is equal or greater then 500.000,00 KM for state authorities or 700.000,00 KM for local authorities and public entities in case of procurement of goods and services, and equal or greater than 2.000.000,00 KM in case of procurement of works. The act establishes five primary procedures for the award of contracts in public procurement, which are equal to or above the primary value class and for international competition (described in Chapter II of the act), as follows: (1) open procedure; (2) restricted procedure with prequalification; (3) negotiated procedure with publication of procurement notice; (4) negotiated procedure without publication of procurement notice; (5) a design contest project. The act provides for the application of two more procedures (as described in Chapter III of the act), as follows: (1) a direct agreement, and (2) the competitive request of quotations, which are applicable to public procurement procedures below the primary value class, or governing contracts of lesser value. The basic principles on which the Act of Public Procurement in BH (Act) is based on, and the EU Directives on public procurement, which the contracting authorities must respect throughout the procurement process are the principles: equal treatment (non-discrimination), transparency, fair and open competition, economy and legality (Rička et al., 2008). The principle of transparency in public procurement procedures demands availability of relevant information to all interested parties, consistent and in a timely manner, via accessible and prevailing medium, at no or at reasonable cost (Public Procurement Agency, 2009). Respect for the principle of transparency is guaranteed by the regulations which are presented in Table 1. 82 Journal of Economic and Social Studies �Public Procurement System in Service for Strengthening the Market Economy in Bosnia and Herzegovina Table 1: Legal regulations that implement transparency requirements LEGAL REGULATIONS Article 11. Article 13. Article 18. Article 19.-20. Article 38. Article 40. Article 41. Article 42. TRANSPARENCY REQUESTS Rules of selection of the public procurement procedures, and in accordance with them, basic and preferential procurement procedure is an open procedure. Contracting authority has the obligation to prepare tender documentation which contains a collection of information on the procurement. Give the tender documentation to interested suppliers. Publication of public procurement notices. Requesting for informing the candidates and tenderers of the decisions made during the procurement procedure. Requesting for the publication of contract award notices. Report about procurement procedure. Archiving documents of the given procurement procedure by the contracting authority. Source: adapted in accordance to EUPPP Manual (European Commission, 2007) However, depending on whether the act established the obligation to perform certain operations or left it as a choice to the contracting authority, public procurement procedures prescribed by the act can be viewed as more or less transparent compared with each other. Pursuant to the provisions of the Act, authors themselves carry out a qualitative analysis of the transparency assessment of public procurement procedures, according to following criteria: whether it is obligatory or not to publish procurement notice and tender documentation, whether it is obligatory or not to publicly display the offers, whether it is obligatory or not, to have a minimum deadline for offer acceptance and minimum number of offers and bidders, and whether the tender documentation is free or not. Authors classified all procedures in three groups: most transparent procedures, less transparent procedures, and least transparent procedures, as it is show on the Figure 1. ii Volume 6 | Number 2 | Fall 2016 83 �Merim Kasumovic, Sanela Meholjic-Kalajdzic, Harun Meholjic Figure 1: Public procurement procedure in BH - transparency assessment MOST TRANSPARENT PROCEDURES LESS TRANSPARENT PROCEDURES LEAST TRANSPARENT PROCEDURES • Open • Limited with prequalification • Negotiated with publication of notices • Negotiated without publication of notices • Competitor request • Direct agreement The transparency of the public procurement system is not an end in itself; it is a mechanism that is used to accomplish a certain goal. Trepte (2006) states that the transparency of the public procurement system is primarily used as a mean to protect economic efficiency, and ensure control by regulator (national or international), of the whole procurement system. Economic efficiency, as a natural result of free market, is based on establishing perfect competition. Therefore, imposition of transparent procedures, defining conditions and specifications in advance and publishing the criteria for selection and awarding the contract, are mechanisms that are used to avoid direct discriminations that could endanger desired competition. Methodological Framework of the Research The empirical part of the research covered dynamic analysis of two research areas: (1) the existing public procurement system in BH, its framework and limitations considering transparency principle; (2) the public procurement market in BH in determining market power of contracting authorities and suppliers by measuring their individual and collective market shares in period from year 2010. to 2012. Theoretical Concept of Empirical Research The research was conducted using secondary research and available statistical data. According to authors' adaptations, the theoretical concept of empirical research is shown in Figure 2, and it states that the most significant factors for competition development in the public procurement market in BH are: scale and structure of 84 Journal of Economic and Social Studies �Public Procurement System in Service for Strengthening the Market Economy in Bosnia and Herzegovina market demand, eventual barriers for entering the market, purchasing power of buyers (contracting authorities), whether or not procedures are transparent and open, and market power of the suppliers. Figure 2. Most significant factors for competition development in public procurement market in BH BEHAVIOR OF CONTRACTING AUTHORITIES IN TERMS OF PRESENCE OF OPEN PROCEDURE market power of seller MARKET COMPETITION DEVELOPMENT ON THE PUBLIC POROCUREMENT MARKET size and structure of demand market power of buyer barriers in attempt to enter the market Authors are considering the correlation between the most significant factors for competition development in the public procurement market in BH (Figure 3), in the way that scale and structure of demand, eventual barriers for entering the market and individual shares of contracting authorities in the public procurement market determine their market power. Market power of buyers determines their behavior in regards to selection of certain public procurement. Their choice of more or less transparent procedures contributes to the decrease or increase of competition in the public procurement market in Bosnia and Herzegovina. In this context, besides the central research hypothesis: increase in transparency of public procurement contributes to the strengthening of market competition in Bosnia and Herzegovina, two backup hypotheses have been established: Volume 6 | Number 2 | Fall 2016 85 �Merim Kasumovic, Sanela Meholjic-Kalajdzic, Harun Meholjic H1: In the case that contracting authorities have more market power, they will utilize less transparent procedures. H2: In the case that contracting authorities have less market power, they will utilize more transparent procedures – open procedures. Figure 3: Correlation between the factors of market competition in the public procurement market in BH Market power of buyers (contracting authorities) Measured by market concentration of five leading buyers (cr5) Behavior of contracting authorities regarding transparency principle ensurance Selection of less transparent procedures Selection of more transparent procedures Market power of suppliers (sellers) Measured by market concentration of five leading suppliers (sellers)(cr5) Market competition For the assessment of contracting authorities regarding their selection of procedures, authors used the data published by the Public Procurement Agency of BH (Agency). Two hundred of the largest contracts, completed in years 2010, 2011 and 2012, and which refer to: the procurement subject description (goods/services/works), the name of the contracting authority and its supplier for each contract, the type of executed procedure and the contract value. The Agency could not deliver the data for the years 2008 and 2009 because data from those years were not representative. Two hundred of the largest contracts that were completed in 2010 and in 2012 represent more than 50% of the total public procurement market in Bosnia and Herzegovina, and in year 2011, 200 of the largest contracts represented just 34.60% of the total market. In other words, 200 of the largest contracts in the year 2010 constituted 51.57% of the total demand, in the year 2011, 34.60%, and in the year 2012 86 Journal of Economic and Social Studies �Public Procurement System in Service for Strengthening the Market Economy in Bosnia and Herzegovina 58.61% of the total demand for goods, works and services in the public procurement market (Table 2). Table 2: Representativeness of samples for examining the market power of participants in the public procurement market TOTAL VALUE OF COMPLETED CONTRACTS 2010 3.469.981.667,61 TOTAL VALUE OF COMPLETED CONTRACTS IN A SAMPLE 1.789.620.514,48 REPRESENTATIVENESS OF THE SAMPLE 2011 3.128.833.371,96 1.082.513.780,32 34,60 % 2012 3.560.468.418,94 2.086.767.392,45 58,61 % 51,57 % Source: adapted from the Public Procurement Agency of BH data Size and Structure of the Public Procurement Market Considering that there are more than 2000 contracting authorities that are subjected to the act of public procurement of BH, and that annual value of public procurement is getting close to 4 billion KM (Public Procurement Agency, 2013),we can state that it is large and important market. Based on data published by the Directorate of Economic Planning of BH(2013), the public procurement share in GDP of BH in the year 2012 was 12.95%. Structure of the public procurement market can be analyzed by the subject of procurement: goods, services and works. During all observed years, in total value of completed contracts of public procurement, the market of the public procurement of goods was the largest. In other words, demand for goods was the largest, while the lesser demand was for works and the least for services. In the European Union as opposed to BH, services were the predominating demand, and in the year 2010 it constituted 42% of all public procurement. While 36% was the demand for work, and goods were in last place, constituting only 22% (European Commission, 2012). Analyzing the sample of 200 of the largest completed procurement of public procurement in BH (Table 3), the major procurement in years 2010 and 2011 was procurement of goods that consisted 54.4% and 74.16% of total public procurements, respectively. In the year 2012, a slightly larger procurement of works was recorded (48.21%) in regard to procurement of goods (40.70%). Volume 6 | Number 2 | Fall 2016 87 �Merim Kasumovic, Sanela Meholjic-Kalajdzic, Harun Meholjic Table 3: Structure of demand with regard to the subject of the procurement in observed sample YEA R GOODS 2010 2011 2012 SERVICES WORKS TOTAL KM % KM % KM % KM % 973.545.490, 04 802.753.121, 10 849.231.383, 10 54,4 0 74,1 6 40,7 0 213.286.929, 33 158.607.096, 00 231.599.765, 66 11,9 2 14,6 5 11,1 0 602.788.095,1 1 121.153.563,2 2 1.005.936.243, 69 33,6 8 11,1 9 48,2 1 1.789.620.514, 48 1.082.513.780, 32 2.086.767.392, 45 100,0 0 100,0 0 100,0 0 Source: adapted from Public Procurement Agency of B&H data Behavior of contracting authorities in BH – public procurement procedure selection All responsibility for adequate implementation of the public procurement system in BH lies with contracting authorities that make the final decision about utilization of a certain procedure (that can be more or less transparent), depending on the fulfillment of the conditions prescribed by law. Therefore, it was necessary to analyze their behavior in the context of ensuring the transparency principle during the selection of the procedures of public procurement. Transparency of public procurement is identified as an independent variable in the central research hypothesis. The following indicators for transparency of public procurement in BH are used: • • Presence of certain procedures in total public procurement; Variations of open negotiation procedures without notice shares in total public procurement. While in the EU transparency in public procurement procedures is rising year in and year out according to data reported by European Commission (2012), in BH transparency is dropping gradually. Data analysis of applied procedures in public procurement, represented in Table 4, has shown an apparent decline of transparency in conduction of public procurement in observed period of time. Open (most transparent) procedure in year 2012 had only 37.13% of the share in total public procurement, while in the year 2008 it had even 91.89% of the share in total public procurement. A procedure opposed to negotiation without publication of notification that is, the least transparent procedure in group of procedures from 88 Journal of Economic and Social Studies �Public Procurement System in Service for Strengthening the Market Economy in Bosnia and Herzegovina Chapter II of the Act, in the year 2008 had the share of 3.99% of total public procurement. Until the year 2012 its share increased to 49% of total public procurement. Variation of open and negotiation procedure without notice shares are presented in Figure 4. Table 4: Public procurement procedures applied in period between 2008. and 2012. Procedures from the Chapter II of the Act YE AR NEGOTIATION PROCEDURE iii Procedures from the Chapter III of the Act COMPETITIVE DIRECT REQUEST AGREEMENT OPEN PROCEDURE LIMITED PROCEDURE 20 08 KM 1.598.03 7.250,83 % 91, 89 KM 62.150.50 0,68 % 3, 15 78.788.985,5 7 3,9 9 KM 191.465.3 28,57 % 9,7 1 KM 41.829.98 1,63 20 09 1.507.30 6.001,68 82, 95 34.806.81 3,94 1, 91 275.141.970, 96 12,9 5 240.465.4 98,04 11, 32 67.093.63 2,79 20 10 1.343.82 1.679,59 38, 73 47.762.31 2,35 1, 38 1.510.857.88 6,84 43,5 4 423.359.6 03,82 12, 2 144.180.1 85,00 20 11 20 12 1.169.51 5.441,01 1.321.88 2.884,64 37, 38 37, 13 18.256.71 0,88 60.962.41 3,53 0, 58 1, 71 1.549.709.73 3,15 1.744.479.03 7,03 49,5 3 49, 00 * * * 355.389.8 73,35 9,9 8 77.754.21 0,10 % 2, 1 2 3, 1 6 4, 1 6 * 2, 1 8 TOTAL PUBLIC PROCUR EMENT KM 1.972.330. 047,28 2.124.813. 917,41 3.469.981. 667,60 3.128.833. 371,96 3.560.468. 418,65 *data not available because the Agency did not publish the report for year 2011. Source: adapted from Public Procurement Agency annual reports (2008, 2009, 2010 & 2012) and Transparency international BH for year 2011 Figure 4: Open and negotiation procedure -variations of shares 100 91,89 82,95 80 60 40 43,54 38,73 37,38 37,13 20 3,99 49,53 49,00 12,95 0 % OPEN PROCEDURE 2008 2009 Volume 6 | Number 2 | Fall 2016 % 2010 NEGOTIATION PROCEDURE 2011 2012 89 �Merim Kasumovic, Sanela Meholjic-Kalajdzic, Harun Meholjic Source: adapted from Public Procurement Agency annual reports (2008, 2009, 2010 & 2012) and Transparency International BH for the year 2011 With the fact that the least transparent procedures (competition request, direct agreement, negotiation procedure without notice) reached almost a 70% share of the total contracts signed, we can say that the behavior of contracting authorities in the context of ensuring transparency principle has failed and that it violates fair market competition. Competition on Public Procurement Market in BH Business strategies of firms affect the structure and organization of the market as well as their own functioning (Sharma and Tomić, 2011). There are many factors that affect shaping of competitive relations between participants on the market: number and size of individual participants on offering and/or demanding side, limitations and possibility of new competitors emergence, spatial distribution of customers and suppliers, greater or lesser homogeneity or differentiation of products, elasticity degree of demand for certain products, etc. (Jurin and Šohinger, 1990). Useful basic indicators of participants’ market power and the market power of their competitors are determining the market shares and level of market concentration of the observed market (Croatian Competition Agency, 2005). The greater the market share of a concentration participant, the greater the probability that such an entrepreneur has market power as well. Term – market power of an entrepreneur can be defined as a long-term ability to sell its products at a higher price than the market price.On the basis of said we can conclude that entrepreneur has significant market power if he is characterized by a large market share and high financial power that enables him to dictate purchase (market) conditions, and to exclude competitors from the market. His market power is greater if he operates on closed market. The entrepreneur with high market power has the ability to act independent of potential and real competitors, customers’ interest, suppliers, and society on the whole. Market competition is identified as an independent variable. It is also a precondition for strengthening market economy in general. For measurement of market competition on the public procurement market in B&H, based on the observed sample, the following indicators were used: • 90 The market shares of customers and sellers Journal of Economic and Social Studies �Public Procurement System in Service for Strengthening the Market Economy in Bosnia and Herzegovina • The market concentration ratio of the five largest buyers/sellers on submarkets of goods, services and works procurement. • The (Non)Existence of buyers/sellers domination on the public procurement market The Market Concentration ratio (CR) is one of the usual measures of market concentration. It shows the total (joint) market share of a relatively small number of the largest entrepreneurs that operate on the same market. The higher the CR is, the market is more concentrated. Considering a number of entrepreneurs whose market share is observed, the market concentration ratio is denoted with CR2, CR3, CR4, etc. A higher ratio of market concentration indicates that market competition has decreased, and vice versa. To measure (non)existence of dominant buyer/seller on the public procurement market in B&H, the following criteria, established by provisions of the competition Act, ivwere used in this paper: • • • A buyer/seller is dominant on the market if it has more than 40% of market shares. Two or three buyers/sellers are dominant on the market if they, together, have more that 60% of the market shares. Four or five buyers/sellers are dominant on the market if they, together, have more than 80% of the market shares. Market Power of Buyers (contracting authorities) On the procurement of goods, the market concentration ratio of five leading suppliers indicates that they have high market power because their total shares (CR5) ranged from 43.58% in the year 2010, 38.9% in the year 2011 and to 40.53% in the year 2012. They do not have a dominant position but they do have significant power on this market. Three enterprises that emerge in five leading suppliers are: coal mines Kreka Tuzla, brown coal mines Kakanj and brown coal mine Banovići. Their cumulative shares are increasing each year, and in year 2012 they were 32.73%. On the procurement of works market, it has been recorded that the market concentration of the five leading suppliers was the highest in regards to market of goods and services. CR5 was 80.03% in year 2010, 37.31 in year 2011, and finally it Volume 6 | Number 2 | Fall 2016 91 �Merim Kasumovic, Sanela Meholjic-Kalajdzic, Harun Meholjic rose to 82.0% in year 2012. In accordance with set criteria, five leading suppliers are dominant in this market. On the market of services procurement, CR5 indicates that market concentration of the five leading suppliers is rising with each year, ranging from 37.58%, over 47.59% to 48.93% in the year 2012. There are no enterprises or group of enterprises that are dominant on this market. Figure 5: Concentration of public procurement of goods, works and services markets in terms of suppliers (CR5 in period from 2010-2012) 2010 2011 82,00 80,03 43,58 38,90 40,53 GOODS 2012 47,59 48,93 37,58 37,31 WORKS SERVICES Source: adapted from Public Procurement Agency data On the overall public procurement market in terms of suppliers, high market concentration has been recorded for the five leading suppliers in year 2012 (CR was 48.12%), which indicates that these five leading buyers have relatively high market power, but not a dominant position. In regards to the market power of the five leading buyers, their market power is significantly lower. Different companies have had the position of the largest supplier in the years 2010, 2011 and 2012: NISKOGRADNJA with a share of 24.27%, Kreka coal mines with a share of 10.36%, and CHV Czech Republic with 33.63% of the share, respectively. Their individual shares are big but these suppliers were not dominant in the overall market. 92 Journal of Economic and Social Studies �Public Procurement System in Service for Strengthening the Market Economy in Bosnia and Herzegovina Results of Empirical Research of the Public Procurement Transparency Impact on Streightening Market Competition in BH Starting from the theoretical concept of empirical research and the relationship between the most significant factors of market competition development, based on the results obtained, it is possible to test the proposed research hypothesis and examine the impact of increasing the transparency of public procurement to strengthen the market competition in BH. Results of the study based on a sample of the 200 largest, completed public procurement contracts in BH in the period from 2010 to 2012 are presented in Table 5, and refer to the information on:  size and structure of demands for goods, works and services,  market concentration of the five leading buyers on the market of goods, works and services,  market concentration of the five leading suppliers on the market of goods, works and services,  the amount of open procedures in the total procurement of goods, works and services. Table 5: Research results INDICATO RS SIZE AND STRUCTU RE OF THE DEMAND IN % MARKET CONCENT RATION OF BUYERS CR5 AMOUNT OF OPEN PROCEDU RES IN % MARKET CONCENT RATION OF SUPPLIERS GOODS PROCUREMENT MARKET WORKS PROCUREMENT MARKET SERVICES PROCUREMENT MARKET 2010 2011 2012 2010 2011 2012 2010 2011 2012 54,40 74,16 40,70 33,68 11,19 48,21 11,92 14,65 11,10 75,83 64,91 75,16 84,32 42,39 95,66 59,28 62,92 64,56 18,45 29,02 18,85 7,98 8,47 14,32 3,57 10,21 2,91 43,58 38,90 40,53 80,03 37,31 82,00 37,58 47,59 48,93 Volume 6 | Number 2 | Fall 2016 93 �Merim Kasumovic, Sanela Meholjic-Kalajdzic, Harun Meholjic CR5 Testing auxiliary hypotheses will be conducted by re-examining the relationship between market power of the largest buyer in the whole public procurement market in BH (Elektroprivreda BiH) and the amount of the open procedures in its procurement, because research shows that the public enterprise "Elektroprivreda BiH" achieved the highest individual share of 26.55%, 38.34% and 55.44% in the period from 2010th to 2012th year Research Results on the Market of Procurement of Goods In the reporting period, a higher demand for goods than for works and services has been recorded. Considering that a high demand for goods offers possibility to make a profit, many suppliers are present on this market, and therefore larger competition is expected. In the reporting period, the highest reported demand for goods was reported in year 2011 and it amounted to 74.16% from total public procurement in BH. High demand resulted in the decreasing of market concentration of the five leading buyers (CR5 was 64.91%). As a result of the decreased market power of buyers in year 2011, the amount of open procedures was highest (29.02%). This contributed to the increase in competition and in final, decreasing of the market concentration of the five leading suppliers to the smallest level in the reporting period (CR5 was 38.90%). This relationship can be seen in Figure 6. Observing this market in the year 2012, when lower demand was recorded than in the year 2011, the market power of buyers increased again, as they used their higher market power to conclude smaller value contracts with open procedure than in the year 2011. That was the reason why the market concentration of five leading buyers increased, i.e. competition on this market was lower. Figure 6: Relationship between market concentration of suppliers, amount of open procedures of total public procurement procedures and market concentration of buyers (period from 2010 to 2012) in % MARKET CONCENTRATION OF BUYERS CR5 AMOUNT OF OPEN PROCEDURES IN % MARKET POWER OF BUYERS CR5 75,83 43,58 72 38,9 18,45 2010 75,16 64,91 29,02 2011 40,53 18,85 Journal of Economic and Social Studies 2012 �Public Procurement System in Service for Strengthening the Market Economy in Bosnia and Herzegovina Source: data from Table 5 The largest buyer, JP Elektroprivreda BiH, acted in accordance with its market power. This buyer had a dominant position in all observed years on the market of goods with shares over 40%. As its market power as a buyer increased, the amount of open procedures in the market decreased, which can be seen in Figure 7. Figure 7: Relationship between the market share of public enterprise “Elektroprivreda BiH” and open procedure on the market 50 45 40 35 30 25 20 15 10 5 0 47,28 45,41 47,37 OPEN PROCEDURE MARKET SHARES 12,4 7,26 2010 2011 7,82 2012 Researching the impact of increasing the transparency of public procurement on strengthening market competition on the commodities market we came to the following conclusions: • With increase in the market power of buyers, the amount of most transparent procedures decreases i.e. transparency of public procurement decreases. Volume 6 | Number 2 | Fall 2016 95 �Merim Kasumovic, Sanela Meholjic-Kalajdzic, Harun Meholjic • With the decrease of public procurement transparency, market concentration of the five leading suppliers increases i.e. market competition decreases. Research Results on the Procurement of Works Market The highest demand for works was reported in year 2012, when it amounted to 48.21% of the total public procurement in BH. As opposed to the commodities marketwhere very high demand for works did not result in an increase of competition between suppliers; on the contrary, the largest market concentration of five leading suppliers has been reported. That year, they had very high market power and dominant position (CR5 was 82%), in accordance to research criteria (Figure 8). Causes of such phenomenon can be found in the undeveloped market of works in which operates a small number of construction companies that have had difficulties surviving in periods of economic crisis. If we add to it barriers that occur with entering the market (licenses, the necessary references, business expenses etc.), high market (negotiation) power of the five leading buyers that have dominant positions on this market (CR5 95.66%), then it is not surprising that the level of market competition is at such a low level. The market power of buyers and suppliers has contributed that amount of open procedures from the total public procurement procedures was merely 14.3% in the year 2012, although values of signed contracts were high. Considering indicators recorded in the year 2011, when the lowest demand for works was recorded (11.19%), it is clear that the market power of buyers (CR5 42.39%) and sellers (CR5 37.31%) was at the lowest level in the observed period. Due to the low presence of open procedure in all the years, especially in 2010 and 2011 when it was about 8%, contracting authorities, applying the least transparent procedures for the award of public works discouraged the entry of new companies into the market and thereby jeopardizing the development of competition and the market economy in general. 96 Journal of Economic and Social Studies �Public Procurement System in Service for Strengthening the Market Economy in Bosnia and Herzegovina Figure 8: Ratio of market concentration of suppliers, representation of the open procedure and market concentration of buyers (period from 2010 to 2012) Source: data from Table 5 Public Enterprise “Elektroprivreda BiH”, which has almost achieved monopoly in the works market in year 2012, with shares of 71.57% in this market acted in accordance with its market power. The lowest level of amount of open procedure (2.54%) in total procurement of this buyer was in year 2012, when their market power was highest (Figure 9). Figure 9: Market share of public enterprise “Elektroprivreda BiH” and open procedure on the works market ratio 80 71,57 70 60 50 MARKET SHARES 40 30 10 0 OPEN PROCEDURE 19,64 20 0,46 1,1 2010 5,13 2011 2,54 2012 Source: Author’s interpretation according to data from Public Procurement Agency of BH Examining the impact of the increase in public procurement transparency on the strengthening of market competition in works market, the following conclusions were made: • Market power of buyers and suppliers is very high – the five leading buyers and suppliers have a dominating position on the market. • Undeveloped market and the existence of real barriers for new companies to enter the market makes the market power of buyers and suppliers even stronger • The very low level of public procurement transparency on this market is a consequence of very a high market power of buyers i.e. their dominant position. Volume 6 | Number 2 | Fall 2016 97 �Merim Kasumovic, Sanela Meholjic-Kalajdzic, Harun Meholjic • The lower the level of public procurement transparency is, the greater is the market concentration of suppliers i.e. lower is the market competition. Results of the Research on Services Procurement Market On the services market, continual growth of the market power of buyers and sellers has been recorded, as well as the percentage of open procedures on observed submarkets (3% - 10%). The market power of the five leading buyers is growing each year because of low demand for services, specific procurement cases and real barriers for new companies to enter this market. The very small percentage of open procedure on this market contributes to the ever growing concentration of the five leading suppliers i.e. weakening market competition. Figure 10: Market concentration of suppliers, percentage of open procedure and market concentration of buyers ratio (period 2010 to 2012) MARKET CONCENTRATION OF SUPPLIERS CR5 AMOUNT OF OPEN PROCEDURES IN % MARKET CONCENTRATION OF BUYERS CR5 59,28 37,58 3,57 2010 62,92 47,59 10,21 2011 64,56 48,93 2,91 2012 Source: Data from Table 5 The classic example of the market power of buyers and the amount of open procedures ratio is the case of largest buyer on the services market, Public Enterprise “Elektroprivreda BiH”. The higher the market share of the buyer was, the smaller the amount of open procedures and vice versa. When the market share of this buyer was at its lowest level (7.34%) the highest percentage of open procedure was recorded (1.87%), which can be seen in Figure 11. 98 Journal of Economic and Social Studies �Public Procurement System in Service for Strengthening the Market Economy in Bosnia and Herzegovina Figure 11: Market share of “Elektroprivreda BiH” and open procedure percentage ratio on services market 16 14,9 14 12 11,65 10 8 OPEN PROCEDURE 7,34 6 MARKET SHARES 4 2 1,87 0,59 0 2010 2011 0,85 2012 Source: Authors' interpretation according to data received from public procurement agency of BH In examining the impact of increased public procurement transparency on strengthening market competition on the services market, following the conclusions can be stated: • • • • Higher market power of buyers and suppliers is continually increasing each year. Undeveloped market and the existence of real barriers for new companies to enter the market additionally strengthens the market power of buyers and sellers. Very low level of public procurement transparency on this market is a consequence for the high market power of buyers. The lower the level of public procurement transparency, the higher the market concentration of suppliers i.e. market competition is weaker. Conclusion Insights into the public procurement system, the market power of contracting authorities and suppliers, measured by their individual and cumulative market shares, as well as insights into their behavior in the context of ensuring transparency principles in public procurement have contributed in drawing one general Volume 6 | Number 2 | Fall 2016 99 �Merim Kasumovic, Sanela Meholjic-Kalajdzic, Harun Meholjic conclusion: the public procurement system in BH can be used as an instrument for strengthening the market economy altogether with the transparency mechanism by contributing to strengthening (free) market competition, because market competition represents foundation of functional market economy. By the scientific research method, it has been determined that there is a high market concentration of five leading buyers and five leading suppliers on the market. That means a lower level of market competition. It has also been determined that public procurement transparency is decreasing. Based on quantitative evidence about the size of market competition on the public procurement market, and quantitative analysis of the transparency system impact on market competition, we can conclude that the research hypothesis has been confirmed and that: increase of public procurement transparency contributes strengthening market competition in Bosnia and Herzegovina. The results of the research give us one more insight: behavior of contracting authorities in terms of ensuring the transparency principle is determined by their market power i.e. higher their market power, measured in market shares the lower the percentage of open procedures in public procurement.“, Intentionally or not, contracting authorities negatively affect the development of market competition and therefore functional economy in BH, by not preferring most transparent procedure - open procedure. Theoretical, methodical and empirical insights on the impact of the public procurement system’s transparency on market competition and the market economy in general, represent an argument for urgent reform of the existing public procurement system that enables contracting authorities to weaken the development of market competition and the market economy in Bosnia and Herzegovina. References Council of Ministers of Bosnia and Herzegovina (2012). Chapter 5: Public procurement. Retrieved from: http://www.dei.gov.ba/dei/dokumenti/uskladjivanje/default.aspx?id=10896&langTa g=bs-BA 100 Journal of Economic and Social Studies �Public Procurement System in Service for Strengthening the Market Economy in Bosnia and Herzegovina Croatian Competition Agency (2005). Instruction on the procedure for the assessment of horizontal enterpreneurs' concentration. Retrieved from: http://www.aztn.hr/uploads/documents/tn/zakonodavni_okvir/Naputak_3.pdf Directorate for Economic Planning of Bosnia and Herzegovina (2013). Economic trends: Annual report for 2012. Retrieved from: http://www.dep.gov.ba/dep_publikacije/ekonomski_trendovi/Archive.aspx?langTag= bs-BA&template_id=140&pageIndex=1 European Commission (2007). EUPPP Manual: Public procurement lecturers training in B&H – part 1. Retrieved from: http://www.javnenabavke.ba/publikacije/EUPPPI.pdf European Commission (2007). EUPPP Manual: Public procurement lecturers training in B&H – part2. Retrived from: http://www.javnenabavke.ba/publikacije/EUPPPII.pdf European Commission (2012). Commission staff working document –Annual Public Procurement Implementatation Review. Retrieved from: http://ec.europa.eu/internal_market/publicprocurement/docs/implementation/2012 1011-staff-working-document_en.pdf Jurin, S., & Šohinger, J. (1990). Teorija tržišta i cijena. Zagreb: Globus Knežević, B. (2007). Elektronske javne nabavke na Zapadnom Balkanu, Evropsko zakonodavstvo, VI (19-22), 37-41. Madžar, L. European Union Competition Policy. Retrieved from: http://www.vps.ns.ac.rs/Materijal/mat12420.pdf Public Procurement Agency of Bosnia and Herzegovina (2009). How to apply the principles of the Article 1 of the Act of the Public Procurement of Bosnia and Herzegovina? Retrieved from: http://www.javnenabavke.ba/index.php?id=16odg&odg=1&jezik=bs Public Procurement Agency of Bosnia and Herzegovina (2010). Development strategy of public procurement system in Bosnia and Herzegovina for the period 2010-2015. Retrieved from: http://www.javnenabavke.ba/index.php?id=03vij&vij=25&jezik=bs Volume 6 | Number 2 | Fall 2016 101 �Merim Kasumovic, Sanela Meholjic-Kalajdzic, Harun Meholjic Public Procurement Agency of Bosnia and Herzegovina (2013). Annual report on contracts concluded in public procurement procedures. Retrieved from http://www.javnenabavke.ba/index.php?id=11izv&izv=21&jezik=bs Rička, Ž., Buza, H., Petričević, S., & Stanarević, M. (2008). Zakon o javnim nabavkama –komentar i primjena. Sarajevo: Revikon. Sharma, S., & Tomić, D. (2011). Mikroekonomska analiza tržišne moći i strateškog ponašanja preduzeća. Zagreb: Mikrorad. Transparency international BH (2012). Public Procurement Act of BH: Monitoring of implementation. Retrieved from: http://ti-bih.org/wp-content/uploads/2012/12/Monitoring-javnih-nabavki-2012.pdf Trepte, P. (2006). EUPPP Manual: Right and EU public procurement policy: Transparency requests. Retrieved from: http://www.javnenabavke.ba/publikacije/pravo_i_politika_javnih_nabavki_eu_bs_hr _sr.pdf i “Official Journal B&H”, number 49/04, 19/05, 52/05, 94/05, 8/06, 24/06, 70/06, 12/09, 60/10 & 87/13. ii Design contest project as one of the possible procedures was excluded from the analysis due to his specific application. iii The Public Procurement Agency in the Annual reports does not publish data of the value of concluded contracts by negotiated procedure with publication of procurement notice and negotiated procedure without publication of procurement notice separately. iv Criteria have been established based on the provisions of Act of Public Procurement of Bosnia and Herzegovina 102 Journal of Economic and Social Studies � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 3321 Title A name given to the resource Public Procurement System in Service of Strengthening the Market Economy in Bosnia and Herzegovina Author Author KASUMOVIC, Merim MEHOLJIC-KALAJDZIC, Sanela MEHOLJIC, Harun Abstract A summary of the resource. Abstract: Although the public procurement system in Bosnia and Herzegovina is represented the area of the legal profession because it is defined by laws and regulations, it is actually more important for economists and all public officials in the country. The subject of this work is theoretical. and practical aspects of applying the transparency to the system of public procurement in the context of strengthening market competition in Bosnia and Herzegovina, and the market economy in general. The special significance of this work lies in the fact that for the first time, research methods were applied to reveal the market strength of the contracting authorities (buyers) and market competition among suppliers (sellers) in the public procurement market in Bosnia and Herzegovina, as measured by their market shares. Based on such findings, the relations of market strength of contracting authorities and the level of development of competition on the public procurement market in Bosnia and Herzegovina in the period from 2010 to 2012 was examined in terms of choosing more or less transparent procurement procedures. Keywords:public procurement system, transparency, market competition. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2016-11 Keywords Keywords. Article PeerReviewed H Social Sciences (General),HB Economic Theory,HG Finance https://omeka.ibu.edu.ba/files/original/c9437f33b52cf14878e3e616f992d902.pdf 322410a76895493ccea0cef6aeefcbaa PDF Text Text Punctuation And Capitalisation Errors Of Turkish Efl Students In Composition Classes: An Evidence Of L1 Interference Gencer ELKILIÇ Faculty of Science and Letters, Department of English Language and Literature, Kafkas University, Kars/Turkey Gencerelkilic1322@gmail.com Turgay HAN , Faculty of Science and Letters, Department of English Language and Literature, Kafkas University, Kars/Turkey turgayhan@yahoo.com.tr Selami AYDIN NecatiBey Education Faculty Department of English Language Teaching, Balıkesir University Balıkesir/Turkey selami.aydin@hotmail.com Abstract: While writing composition, Turkish EFL students sometimes confront punctuation and capitalization problems due to their L1 habits. Although such problems can be ignored if the learner is not trained for teaching the target language in future, it is not the case, most of the time, for a teacher candidate or a person expected to work or use it for his or her carrier; in this sense proficiency in Target language(here English) is inevitable. In the present study, punctuation and capitalization errors of the students, studying at Kafkas University, in the Department of English Language and Literature, were determined and the errors stemming from L1 interference were recorded through exam papers as well as through inclass or out of class composition papers. A total of 300 papers written by 32, intermediate level students, (12 males, 20 females); attending the classes regularly, 225 papers written by 29 upper-intermediate level students (8 males and 21 females) were examined in this study. According to the result of the study both intermediate and upper-intermediate students committed fewer interference errors (20, 3 % and 17 %, respectively) than general errors and as the level increases, the rate of the interference decreases (20, 3 % for intermediate level students, whereas 17 % for upper-intermediate students). Keywords: punctuation errors, capitalization errors, Turkish EFL students, L1 interference, composition classes, Kafkas University. Introduction In academic life writing skill has a special importance as it is an active skill in evaluation the actual language competence of language learners. Yet, the students who study at English Language Departments are not enough trained in composing activities during their high school education since they are accepted to the universities by taking a general test (YDS ) in which there are grammar, translation, reading comprehension and some organization questions in paragraph, but there are no such active skills as writing and speaking skills test questions. On ground that, especially freshman students struggle for composing for some time till they get enough instruction on the issue how to compose. However, the writing skill courses do not always cover punctuation and capitalization topics in detail even they raise students’ awareness in linguistic skills as grammar and other organizational problems in composition. When it comes to mechanical issues in composing, there are lots of problems evident in exam papers of freshman students may be stemming from neglecting them but emphasizing other areas of linguistic categories. In this context, students fall in short conveying their ideas in wittings clearly, so, here, drawing their attentions to the punctuation and capitalization may be effective in getting rid of ambiguity in their written works. 279 �To express thoughts and ideas more clearly, to specify the structure of a sentence and also the pauses in a sentence; moreover to ease reading comprehension and to state the ways of intonation and stress on a sentence punctuation is crucial (Akalın et al. 2005: 32). Then, "good punctuation is crucial for successful academic writing. Many students’ essays use little punctuation beyond commas and full stops. But to be restricted to just two forms of punctuation mark, when writing your essay, is like building a house using only a hammer and a saw: you can do it; but not very well. By learning to use more, or all, of the available forms of punctuation you will be able to communicate and express your ideas, and arguments, more clearly (Collinson et al. 1998)." On the other hand, an effective writing should present some important signals to the reader to help to grasp the exact meaning or idea of it. In this context, it is claimed that: "punctuation is in large part a system of conventions the function of which is to assist the written language in indicating those elements of speech which cannot be conveniently set down on paper: chiefly pause, pitch, and stress (Markwardt 1942 cited in Nunberg 1990:11) . Limitations The mechanical errors but not other types of errors were examined and analysed in terms of interference. The Review of Literature Contrastive Analysis Hypothesis (CAH) Contrastive language hypothesis declares that a learner’s L1 interferes with his or her acquisition of a second language, and that it, for that reason, comprises the most important difficulty to master a new language. CA maintains that when the structures of L1 are different from those of L2, errors that reflect the structure of L1 are committed. So, these types of errors are assumed to be the effect of L1 habits on L2 production (Dulay et al. 1982:97). Contrastive analysis also relies on structural linguistic. Davies underlines that “prior to the emergence of applied linguistics in the late fifties/early sixties, the combination of structural linguistics and behavioural psychology led to contrastive analysis approaches in language acquisition study and to behaviouristic methods of language teaching (repetition, habit formation, translation).”(Davies & Elder 2004:249) To sum up, according to Gass and Selinker (2008: 96-97), the assumptions that the contrastive analysis based on are as followings: 1. Contrastive analysis is based on a theory of language that claims that language is habit and that language learning involves the establishment of a new set of habits. 2. The major source of error in the production and/or reception of a second language are the native language. 3. One can account for errors by considering differences between the L1 and the L2. 4. A corollary to item is that the greater the differences, the more errors will occur. 5. What one has to do in learning a second language is learn the differences. Similarities can be safely ignored as no new learning is involved. In other words, what is dissimilar between two languages is what must be learned. 6. Difficulty and ease in learning are determined respectively by differences and similarities between the two languages in contrast. Also, CA puts forward the term interference which stems from unfamiliarity with the L2, that is to say, learner’s not having mastered L2 structures (Dulay et al. 1982:99). Moreover, it must be born in mind that the terms ‘interference’ and ‘transfer’ are important in CA. The former one means that “...due to the unfamiliarity with the L2, that is, to the learner’s not having learned target patterns...” ( Dulay et al. 1982:97) on the other hand, according to Lado (1957) the latter is about “...the grammatical structure of the native language tends to be transferred to the foreign language... we have here the major source of difficulty or ease in learning the foreign language .... Those structures that are different will be difficult.”(Lado 1957:58-59 cited in Dulay et al. 1982: 99). The term ‘transfer’ was elaborated by behaviourist psychologist as positive and negative transfer referring to such a process in which the automatic, uncontrolled, and subconscious past learned behaviours are used to construct new responses. Needless to say, negative transfer refers to the errors stemming from old, 280 �habitual behaviours that are different from new behaviours. On the other hand positive transfer is the correct performance of L2 learners the new behaviour is the same as old ones (Dulay et al. 1982:101). Error Analysis Ellis (1986) criticizes contrastive analysis and thinks that CAH fall in short to predict all the errors that learners’ commit. “First, there were the doubts concerning the ability of contrastive analysis to predict errors. These doubts arose when researchers began to examine language learners’ language in depth. Second, there were a number of theoretical criticisms regarding the feasibility of comparing languages and the methodology of contrastive analysis. Third, there were reservations about whether contrastive analysis had anything relevant to offer to language teaching (p.27).” Methodology Subjects 32, intermediate level students, (12 males, 20 females), attending the classes regularly, and 29 upperintermediate level students (8 males and 21 females) were the subjects of this study. Instruments A total of 300 papers written by 32, intermediate level students, and 225 papers written by 29 upper-intermediate level students were examined in this study. Procedure The composition papers were collected from January 5th 2009 to May 29th, 2009. The papers in question were from the compositions or paragraphs written at home as assignments and also written in class hours studies by the intermediate level prep class students. The collected paper was examined to signify only ‘mechanical errors’ and then the errors were counted and categorized. Finally, the results obtained by contrastive analysis were discussed in terms of interference. Research Questions o o Do L1 punctuation and capitalization interfere with L2 composition papers of Turkish EFL students? Does interference decrease as level of the students increase? Contrastive Usage of Some Punctuation Marks and Capitalisation When compared English punctuation system to Turkish, there exists some critical and completely different usages; therefore, errors of interference are abundant in the written production of the novice EFL writers. The below tables present the completely different usage of some punctuation marks between English and Turkish are given and supported by examples. Full Stop (.) Example English Usage Turkish Usage Common after abbreviations Dr. Laura √ √ Numbers 12.315 X √ Decimals 5.5 √ X To separate part of dates 29.05.2007 X √ Between hours and minutes 11.30 X √ Table 1. Uncommon usage of ‘full stop’ in both languages (English-Turkish) 281 �(Note: This table has been adapted from Akalın et al.(2005), Swan (2005 and English Style Guide, University of Copenhagen, 2007, p.3, http://ordbog.ku.dk/pdf/styleguide.pdf/) Comma Example English Usage Turkish Usage Co-ordinate Clause Dr. Laura √ X Subordinate Clause If you study hard, you will be successful. √ X Numbers 7,827 √ X X √ √ X √ X Decimals 3,5 Insert an additional comma before the final ‘and’ (or ‘or’) if needed for clarification (the Oxford comma): Sugar, beef and veal, and milk products Linked sentences. Use a comma to separate two sentences linked by a conjunction such as ‘but’, ‘yet’, ‘while’ or ‘so’ to form a single sentence: The committee dealing with the question of commas agreed on a final text, but the issue of semicolons was not considered. Table 2. Uncommon usage of ‘comma’ in both languages (English-Turkish) (Note: This table has been adapted from Akalın, Ş. et al.(2005), Swan (2005 and English Style Guide, University of Copenhagen, 2007, p.3, http://ordbog.ku.dk/pdf/styleguide.pdf/) Apostrophe Example Plurals of abbreviation do not take an apostrophe Plurals of figures do not take an apostrophe. MEPs, UFOs Pilots of 747s undergo special training. English Usage Turkish Usage √ X X √ Table 3. Apostrophe in English and Turkish (Note: This table has been adapted from Akalın, Ş. et al.(2005), Swan (2005 and English Style Guide, University of Copenhagen, 2007, p.3, http://ordbog.ku.dk/pdf/styleguide.pdf/) On the other hand, capitalisation is another challenging issue for the EFL students as Turkish has some different capitalization, particularly upper case of the letter ‘i’ can be traced on any written production easily which is the evidence of L1 interference. Capitalization Example English Usage Using lower case for job Laura, professor √ titles after name Using upper case of the ACCİDENTS X letter ‘i’ as ‘İ’ Table 4. Capitalisation in English and Turkish 282 Turkish Usage X √ �Problems in Punctuation for Learners of English Most of the language share some common usage of the punctuation and capitalization rules; however, there are also some uncommon rules that can be explained by the characteristics of the languages; especially, in Turkish, possessive markers with the pronouns carry different punctuation. Below the most probable mechanical errors of the EFL students’ production in the compositions and exam papers are tried to be explained (English Style Guide, University of Copenhagen, 2007, p.13, http://ordbog.ku.dk/pdf/styleguide.pdf/) . 1. Its/It’s. Note that “its” is a possessive determiner (like mine, yours, his, hers, ours), whereas the -s in “it’s” is an abbreviation for is (it is). Do not confuse with the use of possessive –s (genitive), which is usually separated by an apostrophe: Peter’s thesis, the faculty’s students. 2. Seasons, etc. No capitals for spring, summer, autumn, winter; capitals for weekdays, months and feastdays: Tuesday, November, Christmas Day. 3. Numbers and fractions. Numbers take hyphens when they are spelled out. Fractions take hyphens when used attributively, but not when used as nouns: twenty-eight, two-thirds completed.” In English a hyphen is used to indicate fraction, however in Turkish derivational morphemes such as –lik, -lık, -luk, -lük are used. 4. Sometimes L2 learners overgeneralize contracted forms. For example; It had ≠ it’d It was ≠ It’s 5. Courtesy questions. No question mark is needed after a request or instruction put as a question for courtesy: Would you please sign and return the attached form? 6. Nouns ending in -s, including proper names and abbreviations, form their singular possessive with -’s, just like nouns ending in other letters. an actress’s pay; Mr Jones’s paper; Helios’s future is uncertain; AWACS’s success Discussion and Conlusion In this study we tried to seek answers to following research questions: 1.Do L1 punctuation and capitalization interfere with L2 composition papers of Turkish EFL students? 2.Does interference decrease as levels of the students increase? Level Intermediate TPs 300 TEs 221 G Es 176 % 79,7 Upper-intermediate 225 118 98 83 L1 IEs % 45 20,3 20 17 Table 5. Distribution of Error Types Depending on the Level of the Students Note: TPs= total papers; TEs= total errors; G Es= general errors; L1 IEs= L1 interference errors. The error types and levels of the students have been given in Table 5. According to the table, both intermediate and upper-intermediate students committed fewer interference errors (20,3 % and 17 %, respectively) than general errors. Another important result of the study is that as the level increases, the rate of the interference decreases (20,3 % for intermediate level students, whereas 17 % for upper-intermediate students). As a result of the study it is clear that EFL students are prone to commit punctuation and capitalization errors which can be traced to the drawback of learners’ L1. Even though the number of such errors isn’t so high and such errors can diminish as the level increases , for the immediate purposes such as passing the written exams during the study period one has to be proficient enough in using punctuation marks as well as capitalisation. Interference errors or errors of other types can be ignored if the students are learning English for the purposes other than teaching in the future, but if they are expected to teach in the target domain, they have to learn and use them properly. It is recommended that in order o avoid L1 interference Turkish EFL students 283 �should be taught punctuation marks and capitalisation comparatively and explicitly. References Akalın, Ş.H., Toparlı, R. Korkmaz, Z., Gözaydın, N. Zülfikar, H. and Yücel, B. (2005). Yazım Klavuzu. Ankara:Türk Dil Kurumu. Collinson I., Mort, P. & Downey, T.L. (1998), The Learning Centre, The University of New South Wales, http://www.lc.unsw.edu.au/onlib/pdf/puct.pdf) Retrieved on 12th March, 2009. Davies, A., Elder C. (2004) The Handbook of Applied Linguistics. UK: Blackwell Publishing. Dulay, H., Burt, M.& Krashan, S.(1982). Language Two. NY: Oxford University Press. English Style Guide, University of Copenhagen, 2007, p.3, http://ordbog.ku.dk/pdf/styleguide.pdf/.Retrieved 0n 23rd March 2009. Gass, Susan M.&, Selinker, L. (2008). Second Language Acquisition, An Introductory Course. NY: Routledge. Marckwardt, A. H. (1942). Introduction to the English Language. New York: Oxford University Press. Nunberg, G. (1990), The Linguistics of Punctiation, CSLI Lecture Notes Number 18, Stanford, California: CSLI Publications. Robert, L. (1957), Linguistics Across Cultures. Ann Arbor: University of Michigan Pres. Swan, M. (2005).Practical English Usage. Oxford: Oxford University Press. http://www.languagechic.com/english_punctuation.html 284 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 355 Title A name given to the resource Punctuation And Capitalisation Errors Of Turkish Efl Students In Composition Classes: An Evidence Of L1 Interference Author Author ELKILIÇ, Gencer HAN, Turgay AYDIN, Selami Abstract A summary of the resource. While writing composition, Turkish EFL students sometimes confront punctuation and capitalization problems due to their L1 habits. Although such problems can be ignored if the learner is not trained for teaching the target language in future, it is not the case, most of the time, for a teacher candidate or a person expected to work or use it for his or her carrier; in this sense proficiency in Target language(here English) is inevitable. In the present study, punctuation and capitalization errors of the students, studying at Kafkas University, in the Department of English Language and Literature, were determined and the errors stemming from L1 interference were recorded through exam papers as well as through inclass or out of class composition papers. A total of 300 papers written by 32, intermediate level students, (12 males, 20 females); attending the classes regularly, 225 papers written by 29 upper-intermediate level students (8 males and 21 females) were examined in this study. According to the result of the study both intermediate and upper-intermediate students committed fewer interference errors (20, 3 % and 17 %, respectively) than general errors and as the level increases, the rate of the interference decreases (20, 3 % for intermediate level students, whereas 17 % for upper-intermediate students). Date A point or period of time associated with an event in the lifecycle of the resource 2009-06 Keywords Keywords. Conference or Workshop Item PeerReviewed L Education (General) https://omeka.ibu.edu.ba/files/original/21903024b473422b176d2d77eab847cc.docx c77011a9d8552cedac94a6135b538b3c https://omeka.ibu.edu.ba/files/original/54ac882004bd8ea46ad95d77f0da2a39.pdf 16c997b7882681a827497590cef9c818 PDF Text Text Punningly Confusing Homophones of the English Language Lidija Perkić University of Tuzla/ Tuzla, Bosnia and Herzegovina Key words: English homophones, rapid speech, spelling, pronunciation, misunderstanding ABSTRACT Homophones are words that sound exactly the same, but have different meanings and (usually) spelling. However, having homophones in a language may pose a rather significant problem, as the essence of speech is to have differently-sounding words, or else there would be no spoken language. Moreover, the more homophones there are in any language, the more faulty is that language as a scientific and convenient vehicle of speech. Another underlying problem is the difficulty in determining where one word ends and another one begins. In rapid, connected speech, we unconsciously tend to "merge" words, so that every multi-word utterance we produce is actually heard as a continuum of sound, i.e. as if it consisted of a single long word. This is also a source of many frustrating spelling-related problems in English. Nevertheless, one way of escaping from these unfavorable circumstances lies in the fact that homophones require the company of other words in order to be understood properly. When found in a proper context, they do manage to survive in everyday speech. This paper aims to address some of the methods which shall help raise and enhance learner awareness of these particular subtleties of English pronunciation. Specifically, we describe and analyze a number of representative examples in order to master various homophonous sequences of sounds. By knowing the underlying principles that affect words in rapid speech, nonnative speakers may be able to successfully recognize and solve many ambiguous sequences, the consequence of which may be potential misunderstanding and inadvertent puns. Evidently, the paper may have implications on the way that homophones are taught, where future applications of this work may involve improved class material designed for communicative language activities centered on the connected speech phenomena. � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1886 Title A name given to the resource Punningly Confusing Homophones of the English Language Author Author PERKIC, Lidija Abstract A summary of the resource. Key words: English homophones, rapid speech, spelling, pronunciation, misunderstanding ABSTRACT Homophones are words that sound exactly the same, but have different meanings and (usually) spelling. However, having homophones in a language may pose a rather significant problem, as the essence of speech is to have differently-sounding words, or else there would be no spoken language. Moreover, the more homophones there are in any language, the more faulty is that language as a scientific and convenient vehicle of speech. Another underlying problem is the difficulty in determining where one word ends and another one begins. In rapid, connected speech, we unconsciously tend to "merge" words, so that every multi-word utterance we produce is actually heard as a continuum of sound, i.e. as if it consisted of a single long word. This is also a source of many frustrating spelling-related problems in English. Nevertheless, one way of escaping from these unfavorable circumstances lies in the fact that homophones require the company of other words in order to be understood properly. When found in a proper context, they do manage to survive in everyday speech. This paper aims to address some of the methods which shall help raise and enhance learner awareness of these particular subtleties of English pronunciation. Specifically, we describe and analyze a number of representative examples in order to master various homophonous sequences of sounds. By knowing the underlying principles that affect words in rapid speech, non-native speakers may be able to successfully recognize and solve many ambiguous sequences, the consequence of which may be potential misunderstanding and inadvertent puns. Evidently, the paper may have implications on the way that homophones are taught, where future applications of this work may involve improved class material designed for communicative language activities centered on the connected speech phenomena Publisher An entity responsible for making the resource available IBU Publishing Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-03 Keywords Keywords. Article PeerReviewed https://omeka.ibu.edu.ba/files/original/433af0f49486ea9f3389d71be57ab7fe.pdf 2194256d498ce4cb4c34f8813f5afc66 PDF Text Text PROCEEDINGS th ______ The 5 International Symposium on Sustainable Development_______ ISSD 2014 QUALITATIVE CHARACTERISTICS OF INTRODUCED PEACH VARIETIES IN HERZEGOVINA Jasmina Aliman1, Ahmed Džubur1, Semina Hadžiabulić1, Azra Skender2, Dinko Bećirspahić2, Fikreta Behmen3 1 “Dzemal Bijedic” University in Mostar, Agro Mediterranean faculty, USRC «Midhat Hujdur Hujka», 88000 Mostar, Bosnia and Herzegovina (E-mail: jasmina.aliman@unmo.ba) 2 Biotechnical faculty, University of Bihac, Pape I. Pavla II, Bihać, Bosnia and Herzegovina 3 University in Sarajevo, Faculty of agriculture, Zmaja od Bosne 8, Sarajevo, Bosnia and Herzegovina Summary The paper presents three year research on qualitative characteristics of introduced peach varieties: Maycrest, Spring Lady, Rich Lady and Elegant Lady, and standard variety Springcrest in Herzegovina. The varieties were described according to the method of the International Board for Plant Genetic Resources (IBPGR), including subjective assessment. The highest marks for attractive fruit were given to the varieties Rich Lady and Elegant Lady, that are characterized by extremely large fruit, attractive blush colour, and easy stone adherence. Early and medium ripening varieties (Maycrest and Springcrest) are characterized by extremely firmness of flesh which provides greater transportability. The highest stone cracking was found for variety Maycrest, the lowest was noticed for Elegant lady, while the other varieties have medium stone cracking (mark 5). Concerning stone adherence, clingstone was found for the varieties Maycrest and Springcrest, semi-freestone was noticed for the variety Spring Lady, while varieties Rich Lady and Elegant Lady had free stones, actually it is completely free from flesh, characteristic which is highly appreciated by consumers. Key words: peach, fruit, flesh, stone 1 “Dzemal Bijedic” University in Mostar, Agromediterranean faculty 63 | P a g e �ISSD 2014 th The 5 International Symposium on Sustainable Development_______ PROCEEDINGS Introduction Taking into account the total fruit production in the world, peach is in eight place and it is in third place in Bosnia and Herzegovina. Total world production of peach in 2012, was 21.083.151 t (FAOSTAT 2014), and out of that number China has production of 12.000.000 t or 56,92%. Modern market trends that define production parameters of this fruit type are globalization and need for supply with fruit through the year, big variety of products and integral concept of production of healthy safe food, large diversity of products and integral concept of production of healthy safe food. Such market demands are putting tasks before breeding programmes aiming creation of new varieties that would offer longer harvest season of fruits of higher quality with controlled use of plant protection. Special attention is on diversification of pomological features, better fruit storing and modifications of crown architecture in order to adjust trees in programmes to grow in dense plantings. As a result of breeding activities, a variety was created which has perfects fruit features and technological deelopmen that provide realization of its full genetic potential. Today, fruit quality has fundamental value for acceptance of peach and nectarine varieties by consumers due to big market competition (Crisosto & Crisosto 2005, Crisosto et al. 2006b, Iglesias & Echeverría 2009). Skin appearance (colour and without damages), texture, taste and content of sugar and acids are key factors which determine quality of fresh peach and nectarine (Badenes et al. 2006). All these parameters may act independently of each other, therefore they have to be studied as whole and their relation between each other in order to improve selection of production goals. Previous researches carried out for peach (Byrne et al. 1991, Génard et al. 1994, Esti et al. 1997, Génard et al. 1999) revealed connection between some pomological features that refer to fruit quality. Material and method Research was carried out at three the most important locations of peach cultivation in Bosnia and Herzegovina (Mostar, Čapljina and Stolac) during three vegetative seasons: 2009, 2010 and 2011. Materials used for research were newly introduced peach varieties: Maycrest, Spring lady, Elegant lady, Rich lady, and standard variety Springcrest. Rootstock for examined varieties is GF 677. Highly intensified agro-technical and pomotechnical treatment has been carried out in the examined orchards (soil cultivation, fertilization, plant protection). The experiment was set in the accordance to the "Method of randomized block experiment", with 5 trees for every variety, at every location, actually 75 trees in total. Planting distance was 4 x 2,5 m, teee for was slender spindle. Total fruit analyses in examined varieties were carried out on random sample of 50 fruits for every particular parameter. The following quality parameters were examined: fruit attractiveness, ground and red over colour, skin pubescence, skin cracking suspectability. The following flesh features were analysed: colour, firmness, texture and taste. Stone analyses comprehended: form, cracking and stone adherence to flesh. International peach descriptor “Descriptor list for peach“ IBPGR, by Bellini et al. (1984) was used for determination of qualitative fruit features. 64 | P a g e �PROCEEDINGS th ______ The 5 International Symposium on Sustainable Development_______ ISSD 2014 Results and discussion Fruit appearance Peach fruit quality is determined by a collection of internal and external features that are mutually complemented in their expression, and they significantly influence on satisfaction and acceptance of some varieties by their consumers. Fruit attraction is collection of external features which leaves visual effect on consumer. From external features fruit attractiveness is influenced by a shape and size of fruit, ground and red over skin colour, skin pubescence, and from internal factors flesh firmness, texture and taste. Through ripening of peach fruit, additional skin colour is developed over the ground colour, and it can vary from blush to red colour of various intensity (Byrne et al., 1991; Delwiche & Baumgardner, 1985). These changes are happening probably due to chlorophyll degradation (green), unmasking of carotenoids (yellow, orange) (Cory & Schlimme, 1988) and synthesis of anthochyanin (red, purple) in fruit skin. Red colour is determined with the influence of genetic and ecological factors. Intensity of red colour is under the influence of light availability within the crown (Bible & Singha, 1993; Correlli Grappadelli & Coston, 1991; Day et al., 1989; Erez & Flore, 1986; Marini, 1985). Results of the fruit assement of examined varieties of peach is presented in the Table 1. Table 1. Appearance of fruit of examined cultivars of peach, IBPGR, 2009-2011. Variety Fruit attractiveness Maycrest Springcrest Spring Lady Rich Lady Elegant Lady 5 5 7 7 9 Ground colour of skin 5 5 5 6 5 Red over colour Skin pubescence Skin cracking susceptibility 6 6 6 9 7 5 5 5 3 3 5 3 3 7 7 Analysing marks given for fruit attractiveness, presented in the table 1. It may be concluded that all the examined varieties have high marks and it goes from fair (5) for varieties Maycrest and Springcrest, good (7) for Spring Lady and Rich Lady, and excellent (9) for variety Elegant Lady. Based on the presented classification, it may be seen that the most of examined varieties have yellow (5) as skin ground colour, except the variety Rich-Lady which has yellow-orange (6) as skin ground colour. Table 1., also shows that varieties of early and mid season harvest maturity (Maycrest, Springcrest and Spring Lady) have medium red – red over colour (6), variety Elegant Lady has mostly red (7), while Rich Lady has red-wine (9) colour. Further checking of IBPGR results, shows that varieties Maycrest, Springcrest and Spring Lady have intermediate pubescence (5), while the varieties Rich Lady and Elegant Lady have poor pubescence (3). Varieties Springcrest and Spring Lady have low skin cracking susceptibility, variety Maycrest medium, and varieties Rich Lady and Elegant Lady high degree of skin cracking susceptibility, which has to be taken into consideration during determination of harvet time and the way of transport. 65 | P a g e �th ISSD 2014 The 5 International Symposium on Sustainable Development_______ PROCEEDINGS Skin colour is the one that mostly attract attention of consumers, and it is caused by pigments located in cells of epidermis and parenchyma. Yellow and amber colour originates from products of changed chlorophyll, carotene and their derivates. Pink and all tones to red colour originate from anthocyan dissolute in cell fluid. Skin ground colour may be yellow, greenish, green-yellow, yellow-greenish and orange cover with redness on certain parts or on the entire surface. Concerning the red colour is dominant over the yellow and white colour. Features of fruit flesh Flesh analyses comprehended: colour, firmness, texture and taste is presented is by table 2. Ground colour of flesh may go from light greenish to less or more intensive yellow, white or red in tones. The most of peach varieties are divided to white and yellow in the accordance with colour of fruit flesh. White and yellow colour of peach fruit flesh is the most popular and they are basic criteria for classification of peach varieties due to extreme significance of this feature. White colour of flesh is monogenic and dominant comparing to yellow. Red colour around a stone is dominant. Table 2. Features of fruit flesh of examined peach varieties, IBPGR, 2009-2011 Variety Colour of flesh Maycrest Springcrest Spring Lady Rich Lady Elegant Lady 4 5 5 6 5 Firmness of flesh 7 7 5 7 5 Texture of flesh 5 5 7 5 7 Taste of flesh 5 7 9 9 9 Reviewing the results presented in the table 2., it may be concluded that all examined peach varieties have yellow-greenish to yellow-orange flesh colour. Maycrest variety yellowgreenish ground colour of flesh, Rich Lady has yellow-orange, while the other varieties have yellow ground colour of flesh. Table 2., also presents that varieties Maycrest, Springcrest and Rich Lady have fine flesh, while varieties Spring Lady and Elegant Lady have intermediate flesh firmness. Varieties Maycrest, Springcrest and Rich Lady have intermediate texture, while varieties Spring Lady and Elegant Lady have fine texture. Based upon the classification of examined varieties presented in the table 2., it is obvious that variety Maycrest has fine taste (5), variety Springcrest good (7), while varieties Spring Lady, Rich Lady and Elegant Lady have excellent taste (9). Various tones of red colour of skin and flesh of fruit of peach come from anthocyan. Peach fruit, besides table use, is also used a lot for processing into different juices, jams,.... Dark colour of these products is appearing due to the activity of phenoloxidase and anthocyan degradation (Tešović et al., 1996). Stone fetaures of examined peach varieties Size and shape of stone may be used as descriptive characteristic of varieties (Jakubowski & Lewandowska 2004). Shape of fruit stone is ovoid and it varies from variety to the variety. (Quilot et al., 2004). 66 | P a g e �PROCEEDINGS th ______ The 5 International Symposium on Sustainable Development_______ ISSD 2014 Table 3. presents stone features in the accordance with the International descriptor IBPGR. Table 3: Stone features of examined peach varieties Variety Maycrest Springcrest Spring Lady Rich Lady Elegant Lady Shape of stone 4 4 4 4 4 Cracking of stone 7 5 5 5 1 Stone adherence 3 3 2 1 1 It is visible in the Table 3., that all the examined varieties have elongated shape, as classified by IBPGR with 4. It can also be concluded, that variety Elegant Lady has very low cracking predisposition, and actually inconsiderable number of cracked stones were registered for this variety. Medium cracking predisposition was noticed for varieties Springcrest, Spring Lady and Rich Lady, while high level of cracked stone has been registered for the variety Maycrest at all the location within the researched period. Checking the classification results, it is obvious that clingstone was registered for the varieties Maycrest and Springcrest, semi-freestone for the variety Spring Lady, while varieties Rich Lady and Elegant Lady have freestones, completely free from flesh, characteristic appreciated by consumers. Conclusion Analysing assessments of qualitative features of fruit of the examined peach varieties, it may be concluded that all the examined peach varieties have high assessment for fruit attractiveness. Especially variety Elegant Lady has excellent marks for its extremely attractive fruit. (9). Through the results of IBPGR classification of examined varieties, it is obvious that all the varieties have high marks related to flesh features. (colour, texture, firmness and taste). According to the stone cracking susceptibility, variety Elegant Lady has extremely low susceptibility, varieties Springcrest, Spring Lady and Rich have a low susceptibility, while medium was registered for the variety of Maycrest, at all the locations within the examined period. Based upon the conducted research, it may be concluded that all the examined varieties were adapted to the specific conditions of sub-mediterranean Herzegovina and by their qualitative-quantitative characteristics they fulfil required demands of modern market, therefore they may be recommended to famers to be used in practice. References 1. Badenes M.L., LLácer G., Crisosto C.H. (2006): Mejora de la Calidad de Frutales de Hueso. In: Llácer G., Díez M.J., Carrillo J.M., Badenes M.L. (eds) Mejora genética de la calidad en plantas. Sociedad Española de Ciencias Hortícolas y Sociedad Española de Genética, Valencia, p 551-578 2. Bellini E., Watkins R., Pomarici E. (1984): Descriptor list for Peach, IBPGR Secretariat, Rome, CEC Secretariat, Brussels. 3. Bible, B.B. and S. Singha. (1993): Canopy position influences CIELAB coordinates of peach color. HortScience 28:992–993. 67 | P a g e �ISSD 2014 th The 5 International Symposium on Sustainable Development_______ PROCEEDINGS 4. Byrne, D.H., Nikolic, A.N., Burns, E.E. (1991): Variability in sugar, acids, firmness and color characteristics of 12 peach genotypes. J. Amer. Soc. Hort. Sci., 116: 1004–1006. 5. Corelli-Grappadelli, L. and D.C. Coston. (1991): Thinning pattern and light environment in peach tree canopies influences fruit quality. HortScience 26:1464–1466. 6. Cory, K.A. and D.V. Schlimme. (1988): Relationship of rind gloss and groundspot color to flesh quality of watermelon fruit during maturation. Scientia Hort. 34:211–218. 7. Crisosto C.H., Crisosto G.M. (2005): Relationship between ripe soluble solids concentration (RSSC) and consumer acceptance of high and low acid melting flesh peach and nectarine [P. persica (L.) Batsch] cultivars. Postharvest Biology and Technology 38:239-246 8. Crisosto C.H., Crisosto G.M., Neri F. (2006b): Understanding tree fruit quality based on consumer acceptance. Acta Horticulturae 712:183-189 20 9. Day, K.R., T.M. DeJong, and A.A. Hewitt. (1989): Postharvest and preharvest summer pruning of ‘Firebrite’ nectarine trees. HortScience 24:238–240. 10. Delwiche, M.J. and R.A. Baumgardner. (1985): Ground color as a peach maturity index. J. Amer. Soc. Hort. Sci. 110:53–57. 11. Erez, A. and J.A. Flore. (1986): The quantitative effect of solar radiation on ‘Redhaven’ peach fruit skin color. HortScience 21:1424–1426 12. Esti, M., Messia, M.C., Sinesio, F., Nicotra, A., Conte, L., Notte, E., Palleschi, G. (1997): Quality evaluation of peaches and nectarines by elektrochemical and multivariate analyses: relathionships between analitical measurements and sensory atributes. Food Chemistry, 60: 659–666. 13. FAOSTAT. 2014 http://www.faostat.fao.org. 14. Genard, M., Souty, M., Holmes, S., Reich, M., Breuils, L. (1994): Correlations among quality parameters of peach fruit. J. Sci. Food Agric., 66: 241–245 15. Génard M., Reich M., Lobit P., Besset J. (1999): Correlations between sugar and acid content and peach growth. 542 Journal of Horticultural Science & Biotechnology 74:772-776 16. Iglesias I, Echeverría G (2009): Differential effect of cultivar and harvest date on nectarine colour, quality and consumer acceptance. Scientia Horticulturae 120:41-50 17. Jakubowski, T., Lewandowska, G. (2004): Evaluation of fruit size and quality of plum seedlings (Prunus domestica L.), Acta Hort. (ISHS) 663:309-312. 18. Marini, R.P. (1985): Vegetative growth, yield, and fruit quality of peach as influenced by dormant pruning, summer pruning, and summer topping. J. Amer. Soc. Hort. Sci. 110:133–139 19. Quilot, B., Kervella, J., Génard, M., (2004): Shape, mass and dry matter content of peaches of varieties with different domestication levels, Scientia Horticulturae, Volume 99, Issues 3-4, 387-393 20. Tešović Ž., Nidžović S., Plazinić R., Mitrović M. (1996): Antocijani ploda breskve, abstrakti, X kongres voćara Jugoslavije, Čačak Uvodni referati i Jasmina Aliman received her graduate degree from the University of Sarajevo in 1988. MA degree, she gained at the Faculty of Agriculture and Food Sciences University of Sarajevo in 2008. Doctoral thesis “Pomological characteristics some peach varieties (Prunus persica L.) in ecological condition Submediterranean Herzegovina” was done at Agomediterranean Faculty of Dzemal Bijedic University of Mostar in 2012. Her research and scientific activities are in field of fruit growing. She is an author and co-author in 23 scientific works and 5 research studies, and she was participating in several projects funded by EU and by various Ministries in BiH. 68 | P a g e � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2478 Title A name given to the resource QUALITATIVE CHARACTERISTICS OF INTRODUCED PEACH VARIETIES IN HERZEGOVINA Author Author ALIMAN, Jasmina DŽUBUR, Ahmed HADŽIBULIĆ, Semina SKENDER, Azra BEĆIRSPAHIĆ, Dinko BEHMEN, Fikreta Abstract A summary of the resource. Summary The paper presents three year research on qualitative characteristics of introduced peach varieties: Maycrest, Spring Lady, Rich Lady and Elegant Lady, and standard variety Springcrest in Herzegovina. The varieties were described according to the method of the International Board for Plant Genetic Resources (IBPGR), including subjective assessment. The highest marks for attractive fruit were given to the varieties Rich Lady and Elegant Lady, that are characterized by extremely large fruit, attractive blush colour, and easy stone adherence. Early and medium ripening varieties (Maycrest and Springcrest) are characterized by extremely firmness of flesh which provides greater transportability. The highest stone cracking was found for variety Maycrest, the lowest was noticed for Elegant lady, while the other varieties have medium stone cracking (mark 5). Concerning stone adherence, clingstone was found for the varieties Maycrest and Springcrest, semi-freestone was noticed for the variety Spring Lady, while varieties Rich Lady and Elegant Lady had free stones, actually it is completely free from flesh, characteristic which is highly appreciated by consumers. Key words: peach, fruit, flesh, stone Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2014-05-15 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 978-9958-834-36-3 Q Science (General),QH301 Biology,QH426 Genetics https://omeka.ibu.edu.ba/files/original/84719377efd977e3e9be07d21ca21f86.pdf a67930dae22fe8c2180d1f591a2c8542 PDF Text Text 3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo [4] Z.Hasan (2001-2002) Recent Financial Crisis in Malaysia: Response, Results, Challenges, “The Indian Economic Journal, Vol. 49 No.1, pp.28-49 [5] Z. Hasan (2010) Dubai Financial Crisis: Causes, Bailout and After, Journal of Islamic Banking & Finance, Vol. 27, No. 3, pp. 47-55 [6] http://www.cato.org/pubs/pas/pa017.html (accessed from 31.01.2012) [7] http://208.43.71.196-static.reverse.softlayer.com/english/politics/3410/429108.html (accessed from 02.02.2012) [8] Z. Hasan (2011) (unpublished), Money creation and control from Islamic perspective, Department of Economics & Governance, INCEIF: Global University of Islamic Finance [9] M. A . Haneef and E. R. Barakat (2006) (A.D/1427 A.H), Must Money Be Limited to Only Gold and Silver?: A Survey of Fiqhi Opinions and Some Implications, JKAU: Islamic Econ., Vol. 19, No. 1, pp: 21-34 [10] C. Murat (2010): The Case Against the Islamic Gold Dinar, INCEIF, Kuala Lumpur, Unpublished. [11] A. B. B. M. Yusuf, et al. (2002) The Implementation of Gold Dinar is It the End of Speculative Measures?, Journal of Economic Cooperation, 23-3, pp. 71-84 [12] Reuters. "Malaysia Plans To Initially Use Gold Dinar Within Small Group" The Star, 2/5/2002. [13] A. K. M. Meera & M. Larbani (2003) The Gold Dinar: The Next Component in Islamic Economics, Banking and Finance, International Conference on Banking, Monash University, Prato, Italy. [14] A.K.M. Meera (2002) The Islamic Gold Dinar, Pelanduk Publications, Kuala Lumpur, [15] http://www.goldcentro.com/home (accessed from 25th January 2012) [16] www.kitco.com (accessed from 4.2.2012) Quality Costs Accounting And A Firm Application Hilmi Kirlioğlu, Zülküf Çevik, Sakarya University, Sakarya, Turkey E –mails: hilmik@sakarya.edu.tr, zcevik@sakarya.edu.tr Abstract Contemporarily, the competition in the markets has thoroughly heated up. Many companies try to decrease their costs in order to survive in this cruel market. In this respects, the quality costs gain importance in all over the world and in Turkey, too. Companies need to gaining profit for sustainability. And also gaining profit is one and first of companies’ two basic goals. In order to achieve this first goal and to gain sustainability, companies have to provide customers’ and potential costumers’ needs and demand as well as 44 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo they do, and also they should gain sustainable competitive advantage by improving its technology, and its product quality. With the globalization and non-boarding trading, the markets turned into cruel competitive place. In that kind of markets, unfortunately, using low pricing model is not enough for selling goods and services. Companies also need to provide high quality products. In other words, being successful in the global markets, the companies need to have not only low price products, but also high quality products. As it is stated above, in order to gain sustainable competitive advantages in the market, companies need to act two actions at the same time. Firstly, improving the quality of products and services causes gaining sustainable competitive advantages in the market. Secondly, decreasing production costs by improving efficiency in order to promoting the product, brand or company in the market.In addition, the quality cost system utilizes the production efficiency. Therefore, the quality cost system should be established in every company in which it can be applicable. Keywords: Total Quality Management, Quality Costs, Managerial Accounting. 1.INTRODUCTION In recent years, competitive environment of companies are getting harder. In order to have sustainable competitive advantage, companies should produce their products to entirely supply customers’ needs, wants and demands. Subsequently, companies need to have more quality products to remain competitive with other companies. Quality means providing goods and services as suitable for use, and it means fulfilment of clients’ demands. Quality product means having conformity with quality standards in the finished goods. To gain a competitive advantage over rival companies, a company should produce high quality products. While producing high quality product, the company should also take into account its quality costs. Shortly, companies need to produce high quality products in a low quality costs. Consequently, quality and quality costs gain vital importance for a company to survive in a highly competitive market. The importance of this study is to comprehend the necessity of the quality system for a company which operates in the global and local markets. Another importance of the study is to provide recognition of quality costs system benefit to the profit and brand name. The quality costs system causes decreasing in the production cost and increasing in the brand name which will be perceived as producing qualified products. The aims of this study are to show importance of the quality costs for a company which competes in a highly competitive market, and also to demonstrate the necessity of quality costs system in order to have high qualified product with a low quality costs. As it is well known, the quality cost is not a responsibility of a department or an individual, on the contrary, every person in an organization should be responsible for quality. Highly qualified products can be reached by collaboration of all departments in an organization. In this sense, main aim of this study is to demonstrate the function of accounting department in quality costing activities. Those activities can be summarized as, measurement of quality costs, classification of this costs and reporting techniques of the quality costs. In this respect, showing the importance of quality costs’ reporting. 45 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 2.QUALITY Many people define quality in many different ways, because quality is a multi-dimensional concept(Karabınar, 1998). Quality is the degree of consumer satisfaction about the goods and services which they consume. In other words, quality is the degree of fulfilment consumers’ needs and demands for produced product and served services. J. M. Juran, who is one of the quality gurus, thought that quality has many meanings, but two of them have critical importance to managing for quality. First one, quality is the features of products which meet customer needs and thereby provide customer satisfaction. Second one, quality means freedom from deficiencies(Juran & Godfrey, 1998). According to D. C. Montgomery, Quality means fitness for use, and also he defined quality as inversely proportional to variability(Montgomery, 2005). Quality concept is shaped as a conformance of consumers’ needs and use by today’s technologic, economic and social conditions(AYDEMİR, 1999). In addition to those definitions, other quality gurus (Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa, Robert M. Pirsig) had been defined quality as(Hoyer & Hoyer, 2001); - - - Crosby defines quality as “conformance to requirements” Feigenbaum’s definition of quality is “the total composite product and service characteristics of marketing, engineering, manufacture and maintenance through which the product and service in use will meet the expectations of the customer.” According to Ishikawa, quality means “quality of work, quality of service, quality of information, quality of process, quality of division, quality of people, including workers, engineers, managers and executives, quality of system, quality of company, quality of objectives, etc.” Pirsig’s definition of quality is that “Quality is a characteristic of thought and statement that is recognized by a nonthinking process. Because definitions are a product of rigid, formal thinking, quality cannot be defined.” To summing up those definitions, quality is the whole good and service characteristic features of fulfilment power for stated and demanded needs. In other words, many quality gurus defined quality in terms of the degree of the product’s conformance to its requirements to maintain customer satisfaction and in terms of a product that contains no defects(Ömürgönülşen, 2009). 2.1.Quality Costs Quality cost is a cost for detection and anchoring of low quality about goods and services. Simply, Costs of quality are the costs which occur because poor quality may or does exist(Hansen & Mowen, 2006). Quality costs are a measurement of the costs particularly related with the accomplishment or non-accomplishment of product or service quality. To making those explanations more specific, Jack Campanella defined cost of quality as(Campanella, 1999); “More specifically, quality costs are the sum of the cost incurred by (a) investing in the prevention of non-conformances to requirements, (b) appraising a product or service for conformance to requirements, and (c) failing to meet requirements.” At the definitions of Campanella, it is understood that the quality costs consist of three main parts; Prevention Costs, Appraisal Costs, Failure Costs. 46 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 2.2.Quality Components 2.2.1.The Quality of Design The quality of design is the measurement of how much intended requirements and expectations reverberate to the finished products by taking into account production factors. Therefore the quality of design is to designate specification and requirements in order to fulfilment of products’ expected usage function. The quality of design is to approach/reach the quality level of intended product. The important issue is whether the final product conforms to the design and performance standards that have been arranged for it, and not the content or validity of those standards(Garvin, 1984). Determine requirements by - Customers’ Surveys, - Sales Call or Visit Reporting Specifications Sellers Report Specifications to the Organization Company Customers Figure 1: The Process of Design Quality Source;TÜRKEL Asuman, “İşletme Yöneticileri için Toplam Kalite Yönetimi Ve İnsan Kaynakları”, Türkmen Kitabevi, İstanbul, 1998, s.36 The figure above represents the process of the design quality. The design quality has started by customers’ surveys and sales calls; afterwards, specifications have been determined. This process can continue to reach perfect products or services. It is the fact that consumers have endless needs so this process can continue after having perfect products. 2.2.2.The Quality of Conformance The quality of conformance is simply expenditures for reaching desired finished products. It is a company’s fulfilment ability of conformity to design specifications for satisfying customers’ needs, wants and demands. In other words, the quality of conformance shows the conformity degree of a product or a unit to the specifications which had been defined at the stage of quality design in production process. The quality of conformance is conformity between the actual specialty of finished products and the intended speciality which is determined at the stage of product design. Sellers Conformance Company Customers Figure 2: The Process of Quality Conformance Source;TÜRKEL Asuman, “İşletme Yöneticileri için Toplam Kalite Yönetimi Ve İnsan Kaynakları”, Türkmen Kitabevi, İstanbul, 1998, s.57 47 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo The process of quality conformance is illustrated in the figure above. The aim of this process is to reach conformity with specification which have stated in the stage of product design. As increasing the development of the process of quality conformance, the customer’s complaints and direct material costs, labour costs, maintenance costs would be decreased dramatically, and also the products would be produced in time, in a good quality and in a good price or cost. 2.2.3.The Quality of Usage The quality of usage can be also called the quality of performance. It demonstrates the level of product performance in the market by performing customers’ surveys, sales call and sales analysis. It is an indicator of how well the product working by resulting of marginal consumers usage. Shortly, it is usefulness degree of a product which has been bought by consumers.In this respect the quality of performance is the functional result of design and conformance quality. Having Consumers’ Satisfaction with the help of Usage/Performance Reporting Specifications Sellers Redesign Company Customers Figure 3: The Process of Usage Quality Source;TÜRKEL Asuman, “İşletme Yöneticileri için Toplam Kalite Yönetimi Ve İnsan Kaynakları”, Türkmen Kitabevi, İstanbul, 1998, s.15 Source;TÜRKEL Asuman, “İşletme Yöneticileri için Toplam Kalite Yönetimi Ve İnsan Kaynakları”, Türkmen Kitabevi, İstanbul, 1998, s.15 The process, which shown in the figure 3, illustrates usage quality. This process starts with stating the performance levels of the companies’ products in the market by making customer’s surveys and sales analysis. According to these surveys, company redesigns its product to satisfy consumers’ needs, wants and demands. 2.3.Development of Quality Concept Before 20th century, quality was concerned as detection which means that products had been produced and then checked weather the goods were defective or not. Quality was viewed as a problem and product uniformity had been emphasized and also inspection department was responsible for quality. By the year of 1920, it was the first time to use control schemas in the processes. By means of those schemas, which were developed by Walter Andrew Shewhart, make the process more intelligible about how quality is the outcome (product), how it is reliable, and whether the process under control or not. On the other hand, after 1950s, William Edwards Deming, who is the American quality expert, suggested that the important thing is not the outcomes, it is the process itself. It was really important approach for those years. 48 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo By the year of 1956, Arnold Feigenbaum put quality concepts one step further and come up with Total Quality concepts. According to Feigenbaum, if production department singly interested in quality, the high quality product production would be just a dream. All parts of an organization - Marketing, engineering, purchasing and production department - should be interested in product quality instead. By the 1960s, the concept gained a broader meaning. Quality started to be perceived as a thing that included not only the production process, but also the entire organization(Reid & Sanders, 2004). Early TIME: 1900s 1940s 1960s 1980s and Beyond FOCUS: Inspection Statistical Organizational Sampling Quality Focus Customer Driven Quality Old Concept of Quality: New Concept of Quality: Inspect for quality after production. Build quality into the process. Identify and correct causes of quality problems. Figure 4: Timeline showing the differences between old and new concepts of quality Source: Reid R. Dan, Sanders Nada R. “Operations Management: an Integrated Approach”, Wiley, 2nd edition, 2004, p.143. Until 1970s quality was perceived as something which is just a work consists of inspecting and correcting, even if some quality gurus made good effort for quality approach. In 1980s and beyond, fortunately, the quality was concerned as a management tools. It was viewed as a competitive opportunity. The market and consumer needs gained importance and this importance pushed the companies to produce high quality product, otherwise they would not compete in the market. The inspection aspect of quality has been changed. Quality has been built into production process. Causes of quality problems began to be identified and corrected before the production process and quality was not viewed as an inspection after production, anymore. 3.THE CLASSIFICATION OF QUALITY COSTS In an organization, in order to produce quality product, companies have to be in an activity which started from purchasing raw materials to taking into place quality products. Those activities charge company some costs which can be classified as two main parts – Activity Costs and Investment Costs. Cost of Quality 49 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Activity Costs Investment Costs Prevention Costs Interest Costs Appraisal Costs Amortization Costs Failure Costs Opportunity Costs Internal Failure External Failure Figure 5: The Classification of Quality Costs 1.1. The Cost of Investments in Quality Companies have to bear some costs in order to continue their activities, so it is also natural for a company to bear quality costs in order to emerge in the market. Quality investment costs can be defined as the cost to setup research facilities, tests & trials tools and the depreciation of those tools and facilities for taking into place quality goods and services. Internal Failure Costs External Failure Costs Appraisal Costs Prevention Costs Target Current Situation Figure 6: Total quality costs can be reduced by investing in prevention activities. Source:Sippola, Kari, “Two case studies on real time quality cost measurement in software business”, University of Oulu, Finland, p.77 1.2. The Cost of Activity Quality Having quality product brings some requirements. For example, companies need to bear some costs for quality activities. The most important and well known optimal quality model is TQM. Besides TQM, the prevention-appraisal-failure (PAF) model also known as the optimal quality model (Seokjin & Behnam, 2008). In 1961, Feigenbaum indicated that the required quality activities will incur costs and he categorised quality costs into three main parts – Prevention, Appraisal and Failure Costs – Those can be also stated as PAF model (Jaju & Lakhe, 2009). Failure costs should be taken into consideration as two subtopics which are called internal and external failure costs. Cost of Quality Activities 50 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Prevention costs Appraisal Costs Failure Costs Internal Failure External Failure Figure 7: Classification of Quality Activities Costs Source: SuhansaRodchua, “Factors, Measures, and Problems of Quality Costs Program Implementation in the Manufacturing Environment”, Journal of Industrial Technology, Vol.22, No.4 (Oct. 2006 through Dec. 2006), p.3. In the figure 8, three main classifications of quality activities costs have been shown. Those costs do not occur at the same period of the production process. So, it should be also classified as time periods in which they occurred. Consequently, quality cost classification can be classified in time periods. For example, prevention costs encompass the stage of both pre-production and during production and appraisal costs cover the three stages of production –preproduction, production and after production stage. Failure costs divided into two subtopics which internal failure costs and external failure costs. Internal failure costs encompass the period of both production and after production stages. External failure costs just related with the stage of after sale. Before Production During Production Prevention Costs After Production After Sale Appraisal Costs Internal Failure Costs External Failure Costs Feedback Loop Figure 8: Time-Phased Model for Quality Costs Source: Barfield, Jesse T., Raiborn, Cecily A., Kinney, Michael R., “Cost Accounting: Traditions & Innovations”, South-Western College Pub, 5 edition, 2000, p.317 1.2.1. Prevention Costs Prevention costs are the preliminary activities’ costs to reach quality goals for producing goods and services and to avoid deviations of those goals (Kırlıoğlu, 1998). Prevention costs are the activities costs for preventing nonconformity of the goods and services to the costumers’ wants, needs and expectations. Prevention costs are occurred to prevent low quality in the goods or services being produced (Hansen & Mowen, 2006). If prevention activities are adequately performed, these efforts will result in relatively high quality products and low internal and external failure costs. In other word, prevention costs cause to maintain Appraisal and Failure Cost to minimum. Prevention costs are related with quality planning, designing, implementing and managing the quality system, auditing the system, supplier surveys, and process improvements (Rodchua, 2006). 1.2.2. Appraisal Costs It is an activity cost of measuring the suitability of the product to customers’ needs. It is incurred to identify non-conformance to requirements (Oliver & Qu, 1999). 51 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Those costs are related with the supplier’s and customer’s assessment of purchased materials, processes, intermediates, products and services to assure conformance with the specified requirements (Tsai, 1998). These costs can be summarised as Tests and Trials Costs for Incoming Direct Materials, The Costs of Control and Tests for Laboratory Acceptance, Maintenance of Test Device and Equipment, The costs of associated supplies, materials and employee 1.2.3. Failure Costs Failure costs are the costs of quality deviation to the pre-stated quality specifications and quality target in the any stage of product quality process. As a result of low quality product, companies have to bear additional costs and it indicates the costs of failure. Those costs are not inevitable costs for the companies. It is possible to avoid those costs, so those costs are non-conformity costs in the quality costs (Kırlıoğlu, 1998). Failure costs contain the activities of reproduction of defective and unsuitable product, repairing and maintenance or sending to scrap. So as to avoid those costs, the compulsory investing activities for quality should be increased (Kırlıoğlu, 1998). Failure costs divided into two subtopics as internal failure costs and external failure costs. 1.2.3.1. Internal Failure Costs Those costs are the costs of low quality product which is realised before sales of the product. In other words, these costs arise when the outcomes of production fail to meet stated quality specifications and are noticed before transfer those low quality product to the customers (Vahevanidis, et al., 2009). Generally, external failure costs are consisting of Scrap Costs, Reproduction or Repairing Costs, Re-controlling and Retest Costs. 1.2.3.2. External Failure Costs External failure cost is a component of failure costs. It occurred after selling the poor quality product to the customers. In other words, it is failure costs which come up after delivering the products to the customers (Kaner, 1996). Those costs take place for the reason that the products and services do not conform to specification or requirements and those products do not satisfy customer needs after being delivered to customers (Hansen & Mowen, 2006). It is also incurred by amending failures after transfer the finished goods and products to the customers (Low & Yeo, 1998). In general, external failure costs are consisting of Complaints, Warranty, Refunds and Replacement with updated products, Compromise, Recalling. In the figure 9, it is observable that there is two periods which are initial position of the activity costs of quality and ideal position of it. In the initial position, companies have controllable costs – Prevention and Appraisal –. If a company does not perform prevention and appraisal activities properly, it would cause resultant costs as shown in the figure 9. Those costs consists of five costs components. Improper prevention activities results internal and external failure costs. Inappropriate appraisal costs causes lost reputation, customers’ dissatisfaction and customers incurred. 52 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Figure 9: Costs of Quality Model Source:Beecroft, G.D. (2001), ‘‘Cost of quality and quality planning affect the bottom line’’, The Quality Management Forum, Vol. 27 No. 1, p.6. As shown in figure 9, companies should get rid of the failure costs by adequately performing prevention and appraisal activities. As a result, company should take ideal position in the quality system in order to not to bear failure costs. 1.3. The Quality Costs Measurements Quality costs measuring helps to find out where unnecessary quality costs are occurred, thus management can take actions to eliminate that kind of costs and this elimination will reduce poor quality costs occur. In other saying, the quality costs measurement serves management to determine which area of operation requires preventive measures (Low & Yeo, 1998). 1.4. The Necessity of Measuring Quality Costs Measuring quality costs would show the importance of quality costs and with the help of quality management, it has a positive effect on the workers’ behaviour and attitude for quality improvements. Measurement of quality costs exposes nonconformity which may not be identified by the traditional accounting procedures. Thus, it helps the find out inexactness actions which is ignored or overlooked by traditional implementations. Also measuring quality costs reduce after sale costs in the quality costs category (Kırlıoğlu, 1998). The quality costs information can be used as to monitor financial value of the quality improving programme (Sarıkaya, 2003). 1.5. The Quality Costs Analysis After the collection of data, related with quality costs components, should be analyzed before using in an action. This analysis consists of the relationship between a costs component and other costs components and searches the effect on total costs. Quality costs analyse in weekly, monthly, quarterly, yearly, etc. periods. Company structure should be taken into account in determining the period of analysis (Şimşek, 2001). In order to analyse quality costs, companies need to use some techniques. The analysis techniques for quality costs can be listed as; I. Pareto Analysis, II. Ratio Analysis, III. Correlation Analysis, IV. Trend Analysis, 53 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo V. Regression Analysis. Let’s explain them. 1.5.1. Pareto Analysis It is one of the most used techniques in quality costs analysis. This technique developed by Wilfredo Pareto who is a nineteenth century Italian social scientist and economist. He gave his surname to the technique. Pareto principle is universally known as the 80/20 rule. Pareto find out that principle by pin downing that 80 percent of Italy’s national income is sharing by 20 percent of the Italy’s populations. With the help of Pareto diagrams, problems can be put in order of importance, problems of costs analysis can be easily performed and relative occurrence numbers could be searched simply (Sarıkaya, 2003). In other words, Pareto analysis can be utilized to recognize cost drivers which are accountable for the most of cost occurred by ranking the cost drivers in order of value (Tsai, 1998). Numbers of Defective products The components of the Pareto analysis are arranged in descending order, starting from the left to right, beginning with the biggest elements to lowest one. The technique contains the list of factors which contribute to the problem and sort them in proportion to the size of the contributions (Campanella, 1999). Figure 10: An Example of Pareto Diagram Source: Nilgün Sarıkaya, Toplam Kalite Yönetimi, 1. Baskı, Sakarya: Sakarya Kitabevi, 2003, s.32 In the diagram above, errors in categories are shown in before production decrease after improvements. 1.5.2. Ratio Analysis The Ratio Analysis technique is a comparison of costs information which has significant relationship. In order to make ratio analysis for quality costs performance departmentally, the first step should be gathering the quality costs information and to make a comparison, a convenient common ground should be stated. First one is according to direct labour costs; various quality costs can be analysed by total labour costs or direct labour costs. Internal Failure Costs Prevention Costs or Total Labour Costs Direct Labour Costs Second one is according to production costs; the production costs can also be used in calculating quality costs. Total Quality Costs External Failure Costs or Total Production Costs Total Production Costs Third one is according to unit basis; various quality costs can be analysed by comparison with number of produced products. Appraisal Costs The Amount of Production or Total Quality Costs 54 The Amount of Production �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Another one is according to Sales basis; various quality costs can be analysed by comparison with the amount of sales. Last one is according to the costs of goods sold basis; various quality costs can be analysed by the costs of goods sold. Total Quality Costs Internal Failure Costs or Sales Sales Total Quality Costs Internal Failure Costs or Costs of Goods Sold Costs of Goods Sold After the calculation of the ratio above for current period, the results can enable to conduct an analysis by compared with previous period ratios. Consequently, those ratios provide managers to see the trend of the quality costs ratio among the years. 1.5.3. Correlation Analysis Correlation analysis represents the direction and the power of the relationship between variables. In correlation analysis, the results do not give cause-effect relationship, because there is no dependent and independent variable in this technique (Altunışık, et al., 2005). Correlation coefficient (r) has a value between -1 and +1. If the coefficient value is near to +1, it means that there is a strong positive relationship between two variables. If it is close to -1, it can be said that there is a strong negative relationship. If the correlation coefficient value is nearby zero (0), it indicates that there is no significant relationship between these two variables. 1.5.4. Trend Analysis In the long time period, in order to analyze companies’ situation or tenor, managers need to examine and compare previous years to current year. Therefore, trend analysis is most suitable analysis technique to monitor companies’ trend. In a narrow sense, trend analysis is a kind of analysis which is based on comparing the current period costs to previous period costs. By using basic trend analysis technique, the results above can be indicated about the quality costs (Sipahi & Yıldırım, 2004); - By monitoring the quality costs tenor year by year, the trend can be stated that it tends to increase or decrease, - By stated the investment amount in quality, the effect of quality costs on sales can measured, - By the help of the results above, the decision about investment in quality can be also analysed. Total Quality Costs A trend analysis graph can be drawn as follows; Trend Analysis Serial 1 Years Figure 11: An Example of Trend Analysis Graph 55 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 1.5.5. Regression Analysis Regression analysis examines the relationship between one dependent variable and one or more than one independent variables, in other words, this technique try to explain the changes in dependent variable with the help of independent variables (Altunışık, et al., 2005). The regression analysis is crucial technique for analyzing quality costs. It points out the all factors which has an effect on the quality costs. The regression analysis can be used for answering the questions below (Altunışık, et al., 2005); - Can the changes in dependent variable be explained by independent variables? - How much of the changes in dependent variable can be explained by independent variables? (severity of relationship), - If there is a relationship between dependent and independent variables, what is the direction of the relationship? - When the certain conditions controlled, what is the effect of a specific variable or variable group on other variables? Consequently, quality costs have a vital importance for a company and a well-managed quality costs system helps the companies to reach huge amount of profit. 2. AN APPLICATION ABOUT QUALITY COSTS ACCOUNTING ON THE X ELECTRIC INCORPORATED COMPANY In this part of the study, an application will be handled. Until this part, the literature review about quality costs has been given. The concept mentioned in this study will be applied to a firm’s activities. X Electric Inc. Company was founded in 1990 in Adapazarı, Turkey. The company is a Low Voltage Circuit Breaker manufacturer company. The company was founded with hundred percent national capital. It is settled down in a total area of 40.000 square meters, out of which 25.000 square meters is covered area. The company's product range includes 3250 different types of products. 2.1. The Quality Costs Activities in X Electric Inc. Co. In the firm, the quality costs are analysed, measured and reported in order to decrease some avoidable costs in the firm. The company’s failure costs have a big portion among the all quality costs’ components. In order to measure failure costs, the needed chart and report has been prepared monthly and reported to the related departments. 4.1.1. The Prevention Costs Prevention costs are occurred before the production stage of products. The firm takes precaution in order not to produce poor quality product and increase defective product costs. These precaution activities can be stated as; Quality Planning, Quality Circle, The Training of Quality, Inspection and Tests Instructions, Supplier Quality Planning, Preventive Maintenances, Other Prevention Costs. 4.1.1.1. The Quality Planning The quality planning consists of some activities, in order to reach targeted quality level in products. Those activities can be summarized as preparing quality plans, planning all tests 56 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo equipment, preparing yearly quality plan, preparing quality handbook, quality costs reports, personnel planning and other planning activities for quality. Those all activities prepared by quality control supervisor and quality assurance department manager revise this framework and then if it is adequate, the manager approves it. 4.1.1.2. The Quality Circle The quality circle cost consists of the expenditure for the quality circle groups. In the firm, there are two quality circle groups, each group has four members. These members try to find out inaccuracies in the firm and report these inaccuracies to the quality assurance manager. The quality circle cost contains the members’ wages for spending time on the quality circle activities and other costs which occurred by the activities of these circle groups. 4.1.1.3. The Training of Quality The firm gives their personnel periodically training programme for improving their various skills. These training programmes have a context of improving product quality, so these training costs sending to prevention costs as the training costs of quality. 4.1.1.4. The Inspection and Tests Instructions The firm has instructions to make inspection and test for quality. These instructions started from purchasing row materials to reaching final products. The instructions have been prepared by quality control personnel and quality assurance department. These quality costs occurred from the personnel costs and quality assurance department costs for preparing instruction, and it is transferred to the prevention costs as the inspection and tests instructions costs. 4.1.1.5. Supplier Quality Planning The firm provide its row materials from various suppliers. In addition, the firm purchases some products and semi-finished goods by the way of outsourcing. So, the company has some agreements about the outsourcing activities. In these agreements, company states its condition for products quality. By determination of these conditions, some costs are occurred. These costs should be transferred to prevention costs. 4.1.1.6. Preventive Maintenance Machine and equipment has been maintained periodically, in order not to breakdown and produce poor quality products. This maintenance costs transferred to preventive costs. These costs are determined by related department maintenance employee. 4.1.1.7. Other Prevention Costs These costs are occurred from other prevention activities which are not listed above. For instance, try to find out potential causes of non-conformance, and problem solving activities and so on. Because of these activities, the firm bear labour costs, reporting costs and measurement costs. Those all costs are elements of other prevention costs. 4.1.2. The Appraisal Costs The appraisal costs are occurred from the activities of conforming to quality standards and specifications. It consists of calibration, audit, tests and inspection of products, semi-finished products. In the firm, the appraisal costs occur by the activities which are (1) Inspection and tests of purchased materials, (2) Control, maintenance and calibration of Measurement instruments, (3) Process inspection and tests, (4) Consumable materials for laboratory and tests, (5) Products inspection and tests, (6) Other appraisal costs. 57 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 4.1.2.1. Inspection and Tests of Purchased Materials In the firm, first of all, the purchased materials have been checked for quantity control by warehouseman. And then, package, appearance, and conformity inspections are performed by quality control department. Those all activities have been made properly. The results of these inspections are reported and products are stigmatized as approval or rejection. According to this label the approval ones send to warehouse, rejection products returned to the suppliers. 4.1.2.2. Control, Maintenance and Calibration of Measurement Instruments All measurement instruments should be adjusted according to national and international standards in order to check, whether or not, the products produce in conformity with prestated standards and specifications. The costs occurred by making these activities, are transferred to appraisal costs. 4.1.2.3. Process Inspection and Tests The each phase of semi-finished products is checked for conformity with predetermined specifications. These activities performed by doing process inspection and tests. According to the result of inspection and tests, semi-finished products are determined whether they continue the production process or not. 4.1.2.4. Consumable Materials for Laboratory and Tests By performing appraisal activities in the laboratory, some consumable materials are consumed or damaged. Besides, the tests are performed by laboratory assistant. The costs, which are occurred form the activities above and laboratory assistant salary, are added to appraisal costs as consumable materials for laboratory and test costs. 4.1.2.5. Products Inspection and Tests As it is mentioned before the firm is a circuit breaker manufacturing company. The circuit breaker is very risky and essential device in every home, office, and factory and so on. It is most important safety device in wherever electricity has been used. So, in order to prevent adverse effect on people’s safety of life and property, all products of the firm are tested. In other words, one hundred percent of the products are controlled one by one. 4.1.2.6. Other Appraisal Costs These costs consist of all the activities which are not mentioned above. For example, in order to check quality system conformity with quality planning an audit job has been performed. So, the firm endures some costs which should be transferred to appraisal costs as other appraisal costs. 4.1.3. The Internal Failure Costs These costs are occurred from the poor quality products which are detected before delivering the products to the consumers. These costs can be summarised as (1) Salvage, (2) Reproduction and Repairs, (3) Re-inspection, (4) Corrective actions. 4.1.3.1. Salvage Costs These costs are occurred by Salvage and waste product costs. Salvage and waste product means the defective product cannot be repaired or reproduced, it should definitely be scrapped. These costs are calculated by the labour costs and loss of row materials. This calculation is made by quality assurance department with the help of accounting department. 58 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 4.1.3.2. Reproduction and Repairs Costs It consists of row materials, labour and other production costs which the firm have to endure reproduction and repairs of the defective products in order to make the defective products convenient to deliver the consumers. 4.1.3.3. Re-inspection Costs The reproduced and repaired products are inspected again. The goal of this inspection is to check whether these products conform to the specifications or not. Those re-inspection activities cause some costs. These costs are transferred to the internal failure costs as reinspection costs. 4.1.3.4. Corrective Actions According to the customers’ compliant, the firm make some corrective activities for nonconformities before selling the products out. The customers’ complaints are collected and reported. According to this report the firm makes corrective activities in order not to receive same complaints about the products. So these activities cause some costs and these costs are added to internal failure costs as corrective actions costs. 4.1.4. The External Failure Costs These costs are raised after selling the product to the customers. These costs are endured after delivering the products to the consumers by failures, defects, and incompleteness of the sold products. The external failure costs arise from the actions that are (1) Products Returns (Returned Products), (2) Transportation Damage, (3) Warranty Costs 4.1.4.1. Products Returns The products returns consist of the defects of the products which cannot repair in the related warranty period or displayed goods and tester products. In addition, the products which are call backed because of manufacturing defects are also added to this cost. All returned products costs have been calculated by marketing department and reported to quality assurance department. These all costs are sum up and transferred to the external failure costs. 4.1.4.2. Transportation Damage The damage of products which takes place during the transportation of the customers is element of activities for this cost. The damaged products in transportation are transferred to reproduction or repair department, and repost these products to the customers. Those all reproduction, repair and repost or re-transportation costs are added to external failure costs as transportation damage costs. 4.1.4.3. Warranty Costs Every cost made in guaranty period and under warranty activities are added to this cost. The company gives a 2 year warranty. After warranty period, the firm also gives repair services to its customers. 4.1. Reporting Quality Costs in the Firm The firm concentrates on reporting activities for internal and external failure costs. In the firm, production assembly and circuit breaker tests department reports salvages and reproductions to the quality assurance department monthly. External failure costs are pursued by the quality assurance department. 59 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo 4.2. Analysis of Quality Costs in the Firm Under this topic, it will be tried to demonstrate the firm data about quality costs. According to this data some ratio analysis will be done. This analysis will be shown with the help of tables and some charts. The figure below shows the company’s sales and production amount in Turkish Liras (here after TL). The sales and production amount have been given for three years. In addition, the figure contents of total quality costs in the firm for three years. Years Data 2008 2009 2010 Total Sales (TL) 629.053.415 695.866.750 786.859.486 Total Production Costs (TL) 515.326.274 563.708.245 643.590.468 10.028.516 11.712.822 12.642.655 Total Quality Costs (TL) The Ratio of Quality Costs to Sales 1,59% 1,68% 1,61% The Ratio of QC to Production Costs 1,95% 2,08% 1.96% Table 12: Some Ratios and Ratio Components in the Firm According to the firm information, the ratios of total quality costs to total sales have been calculated for given three years. And the ratios of total quality costs to total production costs have been also calculated. In the aspect of the information in the section two, these calculations have been performed as follows. In 2008, the company’s total sales are 629.053.415 TL. In the same year, total quality costs are 10.028.516 TL. So the ratio of total quality costs to sales can be found out as follows; 10.028.516 = 1,59% 629.053.415 It can be conclude that the amount of total quality costs is only 1.59% of the total sales in 2008. 10.028.516 = 1,95% 515.326.274 The calculation above demonstrates that the ratio of total quality costs to total sales is about 1.95%. For the years of 2009 and 2010 have been calculated by the same way and written down in the figure above. This ratio is not too much for an early stage of quality costs analysis applier’s company. In other word, the firm analyses it is quality costs not long ago, so the rates is in the acceptable amount. Besides this ratios can be reduced for more efficient quality costs system. 4.3. The Analysis of Quality Costs as Its Components According to the data which gathering from the firm authorised persons, the quality costs will be given as the classification of quality costs components for 2010. According to this classification, quality costs component will be given as costs items for each one. With the 60 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo help of this costs items, the percentage amount of each costs item will be also calculated and given for the year. Components of Quality Costs Costs (TL) Prevention Costs 1.782.614,36 14,1 Quality Planning 518.348,86 4,1 75.855,93 0,6 The Training of Quality 202.282,48 1,6 Inspection and Tests Instructions 113.783,90 0,9 Supplier Quality Planning 214.925,14 1,7 Preventive Maintenances 480.420,89 3,8 Other Prevention Costs 176.997,17 1,4 Appraisal Costs 5.031.776,69 39,8 Inspection and tests of purchased materials 1.036.697,71 8.2 101.141,24 0,8 1.150.481,61 9,1 581.562,13 4,6 1.984.896,84 15,7 Other appraisal costs 176.997,17 1,4 Internal Failure Costs 4.450.214,56 35,2 Salvage 2.225.107,28 17,6 Reproduction and Repairs 1.656.187,81 13,1 480.420,89 3,8 88.498,59 0,7 1.378.049,40 10,9 998.769,75 7,9 50.570,62 0,4 Warranty Costs 328.709,03 2,6 Total Quality Costs 12.642.655 100,0 Quality Circle Control, maintenance and calibration of measurement instruments Process inspection and tests Consumable materials for laboratory and tests Products inspection and tests Re-inspection Corrective actions External Failure Costs Products Returns Transportation Damage Table 4: Total Quality Costs as Each Cost Items for the Components in the year of 2010 61 Ratio (%) �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo In the figure 2010, the non-conformance costs are under the half of the total quality costs. This demonstrates that the firm is going in the right way. The company pays more importance for conformance costs day by day, so the non-conformance costs decreases naturally. These changes will benefit the company in more ways than one. In the firm, the figures below are reported to the managers in order to monitoring quality costs activates by management. The importance of quality costs increases day by day. Chart 1: the pie chart of Prevention Costs items The chart shows the percentage amount of costs items in prevention costs. The quality planning costs and preventive maintenance costs are about 56% of prevention costs. Quality circle in the firm has too small amount of prevention costs, because this group is voluntary group and the group is not working actively. Chart 2: the pie chart of Appraisal Costs items The chart 2 represents appraisal costs components’ percentage. The production inspection and test has huge amount among these costs. In production inspection and test activities, the company performed control in it is finished products, because of the type of produced products. The finished products have been checked due to prevent consumers’ safety of life and wealth. Chart 3: The pie chart of failure costs items In the chart 3, the failure costs – internal and external failure costs – are drawn as percentage of all costs items in the failure costs. Salvage and reproduction costs have a portion of approximately 66% in the failure costs. 62 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo The next table is shown the total quality costs as categorization groups. As it is mentioned before, the quality costs have two components which are conformance and non-conformance costs. And these components costs are given in the chart. In addition, conformance costs are divided into two cost elements that are prevention costs and appraisal costs. The amounts of these costs are also given yearly in the table. The conformance costs are increasing amount the given years. It rose up two times from the amount of 2008 to 2010 amount. It is good for a company to increase its prevention activities in order not confront defects after selling the products out. Besides, the amount of prevention costs in conformance costs is too small. The firm should be concentrate more on prevention costs. Quality Costs 2008 Conformance Costs - Prevention Costs - Appraisal Costs Non-Conformance Costs - Internal Failure Costs - External Failure Costs Total Quality Costs 2009 2010 3.098.811,45 5.177.067,33 6.814.391,05 631.796,51 1.147.856,56 1.782.614,36 2.467.014,94 4.029.210,77 5.031.776,69 6.929.704,56 6.535.754,67 5.828.263,96 4.693.345,49 4.767.118,55 4.450.214,56 2.236.359,07 1.768.636,12 1.378.049,40 10.028.516 11.712.822 12.642.655 Table 5: the amount of quality costs in classification through the years On the other hand, in the table above, the non-conformance costs have been shown in two parts which are internal and external failure costs. The company has endured too much internal failure costs. It should be increase its preventive activities and decrease the internal failure costs. When it comes to external failure costs, the firm is going in a right way, because for each given years the amount of external failure costs going down. The chart below monitors the percentage amount of the quality costs’ categories for the years. The numbers are percentage of the each category for the year. Each colour in the chart represents the years of 2008, 2009, and 2010. Internal Failure Costs External Failure Costs % Chart 4: The Percentage Amount of The Quality Costs’ Categories Through The Years With the help of chart 4, it can be seen that conformance costs – prevention and appraisal costs – are increasing for each year. Additionally, non-conformance costs – internal and external failure costs – are decreasing for each year. It also shows that the huge amounts of total quality costs are occurred after production stage. The internal failure costs are the biggest costs in the total quality costs for every year. This 63 External Failure Costs �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo situation represents that the defects are realized after the stage of production. The chart 4 demonstrates the movements of the quality costs categorizations through the years. In general, the movements of quality costs components are in a right way, even though the non-conformance costs are more than conformance costs. In the chart, it can be also seen that the amount of prevention costs is under the 15% of the total quality costs which means the firm do not pay enough importance for the prevention activities. Although, the trend of external failure costs is declining, the external failure costs have too much portion of total quality costs. Having too much external failure costs are bring more costs than the firm can measure. TL Chart 6: the Trends of Quality Costs’ Categorization in TL In the chart 6, it is again shown the trend of quality costs components. The chart 5 shows the trends as percentage value, the chart 6 shows this trends as Turkish Liras amounts. The inferences of the chart 6 are similar to the chart 5. 4.4. The Application Results and Proposals The quality costs activities in the X Electric Inc. are concentrated in non-conformance activities. In other word, the firm highly interested in internal and external costs. So, nonconformance costs are monthly reported to management. Besides, the firm do not give required importance for prevention and appraisal costs’ measurement. Therefore, conformance costs are just reported yearly period, even though the firm is giving the more importance to conformance costs than before. On the other hand, while paying the non-conformance costs more importance than the conformance costs in the firm, the company endure more costs than it can measure. That is to say, the firm can bear the quality costs more than in numbers; there may be a non-visual negative effect on the firm. For instance, the firm may confront the loss of customers, bad brand recognition and poor employee motivation and so on. In addition, the efficient quality system causes to benefit the company in more ways than one. It decreases the nonconformance costs and increases profitability of the firm. The firm would have sustainable competitive advantage in the market. Yearly reporting total quality costs is not efficient for making decisions on these costs. The measurement of prevention and appraisal costs is not making appropriately. The allocation key is generally labour costs which is not suitable for measurement of every costs item in the quality costs. 64 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo The firm should establish an efficient quality costs system and determine this system specification for effective measurement and reporting of quality costs. By having reliable and sufficient data in quality costing, company can reduce its non-conformance costs. And it causes to reduce total quality costs and increase profitability of the firm. The firm should prepare instructions and procedures in order to make measurement more efficient especially in prevention and appraisal costs. Every person in the firm should be informed about these instructions and procedures. On the other hand, only the quality assurance department is responsible for quality costing in the firm. As it is mentioned in the previous parts, quality is not a person or a department job; it should be responsibility of every person and every department in the firm. The quality costs reports should be prepared and reported monthly. The accounting department should determine more suitable allocation keys for the measurement of quality costs and journalese these costs according to this measurement. 5. CONCLUSION The Total Quality Management improvements in the Turkey make the Turkish firms to recognize the importance of quality costs. In the industrialised country, the analysis of quality costs has been performed since 1960s. In our country, the quality costs analysis and reporting has gained importance for last decades. Actually, Turkish Firm are forced to analyse these costs, because of highly competitive market. In the market, there are lots of Competitor Companies and many products of these companies. The quality of product becomes higher day by day. While increasing in quality, products are produced more cheaply. In that kind of market, if a firm want to stay alive, it has to increase its products’ quality and decrease its total costs. In order to make it real, the firms need to analyse their quality costs. Producing poor quality products have not only negative effects on the firms, but also have bad effects on the consumers and country economy. The world has limited natural resources, so every person in the world should use these resources carefully and should not be wasted these resources. In other words, the country economy would be badly affected by producing not qualified or poor qualified produce, because the poor quality products causes salvage, reproduction or repairmen of the products, so it means wasting workforce, energy and time in the economy. Thus, the natural recourses should be used effectively. Previously, companies thought that quality control was just a waste of time. It badly affected on the productivity in production. But this thought has been changed in course of time. By effective quality control system, company can reduce the salvage, loss of labour hours and so on, which is decrease the productivity level. On the other hand, by concentrating on conformance quality would cause performing the production control easily, which means decreasing evitable costs and producing products without defects. In addition, by reducing hitch in production process, the idle time in the production would be also reduced. This also causes increasing productivity. Producing high qualified product brings increase in sales, and the profitability would increase. The goal of analysing quality by costs is recognizing quality and control activities’ costs. After determination of costs for non-quality, the firms can compare the costs of quality with the costs of non-quality. Additionally, by determining costs of quality, the company can monitor the each quality activities and its costs. This causes to recognize the activities which bring non-qualified products. 65 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Improving quality activities is intended to reduce the costs of failure. In other words, concentrating on prevention and appraisal activities brings low failure costs in the firms. By increasing conformance activities, the firms need to endure some costs. These costs are not more than non-conformance costs in the firm, because the non-conformance costs may most probably contains hidden costs. These hidden costs can be more harmful than visual or countable costs. The current accounting system in Turkey is not suitable for quality costing and reporting. It is not designed for reporting quality costs separately in details. So, while establishing quality costs system in a firm, the companies should arrange their account plan in order to record quality costs properly and fully. By measuring and reporting quality costs, the managers can recognize that there is a huge amount of costs which they do not take into consideration while making managerial decisions. They can realise that the non-quality issues increase the evitable costs by too much. The quality costs are separate concept from production costs. Some quality cost items consist of non-evitable costs in order to provide quality in produced products. Some quality costs are occurred by lack of quality and they can be reduced by effective quality costs system. The computable costs for quality are less than non-computable costs. For example, to calculate the costs of the reputation loss which is occurred from non-qualified products is not easy. So these hidden costs should be also considered. In the short run, investing in preventing activities can increase total quality costs, but in the long run, these investments will cause decreasing in failure costs. So the firm will reduce its evitable costs in the long run. To summarise, after defining and classifying quality costs, it should be measured and reported to the management. These reports should be as costs items and functional entity of the organization. This way of reporting provide that in which department these costs come from and which cost items have the big portion of these costs and so on. These provide to take precaution about these costs and poor qualified products. The quality costs should be also reported as at least for three years in order to see trend of the quality costs. So the managers can compare the quality costs by yearly and departmentally. On the other hand, some ratios should be used for this analysis, for example ratio analysis. The firms can take the rate of total quality costs to sales or total production to see the ratio of total quality costs. And also these ratios can give more significance information to the managers. There is a direct relationship between the quality costs and operating capacity. In the high production capacity, the quality costs realised in high amount, besides in the low production capacity the quality costs are occurred less. So, the differentiation on quality costs are occurred from the production capacity or investment amount in quality activities can be easily find out. In the globalizing world, the firms should take into consideration of the quality of products. No company can survive in a highly competitive market with its low quality products. And the amounts of quality costs never excess the amount of poor quality costs. REFERENCES Altunışık, R., Coşkun, R., Bayraktaroğlu, S. & Yıldırım, E., 2005. Sosyal Bilimlerde Araştırma Yöntemleri: SPSS Uygulamalı. Sakarya: Sakarya Kitapevi. 66 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo AYDEMİR, S., 1999. Kalite Maliyet Muhasebesi: Arçelik A.Ş. Örneği. Sakarya: Sakarya Üniversitesi, Sosyal Bilimler Enstitüsü. Campanella, J., 1999. Principles of quality costs: principles, implementation and use. s.l.:American Society for Quality press. Garvin, D. A., 1984. Product quality: An important strategic weapon. Business Horizons, May–June , p. 40–43. Hansen, D. R. & Mowen, M. M., 2006. Cost Management: Accounting and Control. s.l.:Thomson South-Western. Hoyer, R. W. & Hoyer, B. B. Y., 2001. What Is Quality. Quality Progress, July, pp. 53-62. Jaju, S. B. & Lakhe, R. R., 2009. Quality costs in a manufacturing industry: a gateway for improvement. International Journal of Applied Engineering Research , pp. 945-954. Juran, J. M. & Godfrey, A. B., 1998. Juran's Quality Handbook. New York: McGraw-Hill Professional. Kaner, C., 1996. Quality cost analysis: Benefits and risks. Software QA, p. 23. Karabınar, S., 1998. Kalite Maliyetlerinin Maliyet Muhasebesindeki yeri ve Bir Öneri. İstanbul: Marmara Üniversitesi Sosyal Bilimler Enstitüsü. Kırlıoğlu, H., 1998. Kalite Maliyetleri Muhasebesi. s.l.:Değişim Yayınları. Low, S. P. & Yeo, H. K. C., 1998. A construction quality costs quantifying system for the building industry. International Journal of Quality & Reliability Management, pp. 329 - 349. Montgomery, D. C., 2005. Introduction to Statistical Quality Control. New York: John Wiley & Sons. Oliver, J. & Qu, W., 1999. Cost of quality reporting: Some Australian evidence. International Journal of Applied Quality Management, pp. 233-250. Ömürgönülşen, M., 2009. A research on the measurement of quality costs in the Turkish food manufacturing industry. Total Quality Management & Business Excellence, May, pp. 547562. Reid, R. D. & Sanders, N. R., 2004. Operations Management: An Integrated Approach. s.l.:John Wiley High Education. Rodchua, S., 2006. Factors, Measures, and Problems of Quality Costs Program Implementationin the Manufacturing Environment. Journal of Industrial Technology, OctDec, pp. 510-515. Sarıkaya, N., 2003. Toplam Kalite Yönetimi. Sakarya: Sakarya Kitabevi. 67 �3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo Seokjin, K. & Behnam, N., 2008. The Dynamics of Quality Costs in Continuous Improvement. International Journal of Quality & Reliability Management, pp. 842-859. Sipahi, B. & Yıldırım, H., 2004. Kalite Maliyetleri Muhasebesi ve İstatistiksel Analizi. İstanbul: Türkmen Kitapevi. Şimşek, M., 2001. Toplam Kalite Yönetimi. İstanbul: Alfa Yayınları. Tsai, W. -. H., 1998. Quality Cost Measurement Under Activity-Based Costing. International Journal of Quality and Reliability Management, pp. 719-752. Vahevanidis, N. M., Petropouolos, G., Avakumovic, J. & Mourlas, A., 2009. Cost Of Quality Models And Their Implementation In Manufacturing Firms. International Journal for Quality Research, pp. 27-36. Evaluation of Financial Performance of Banking Sector: Evidence from Bosnia and Herzegovina, Croatia, Serbia and Slovenia Nađa Dreca International University of Sarajevo,Faculty of Business and Administration 71000, Sarajevo, Bosnia and Herzegovina E-mails: nadja.dreca@students.ius.edu.ba, nadja_n88@hotmail.com Abstract The objective of this study is to compare the financial performance of the banking sector in some ex- Yu countries: Bosnia and Herzegovina, Croatia, Slovenia and Serbia for period from 2005 to 2010. Banking sector of Yugoslavia was strong but because of the weakness and the collapse all these characteristics disappeared. The financial performance of banks is study on the basis of some selected financial variables and ratios, such as return on asset, return on equity, capital adequacy ratio, share of non-performing loans in total loans, participation of deposits, assets and loans in Gross Domestic Product of the country. All of the indicators improved in period until the beginning of the global crisis, but with the first signs of crisis the conditions in entire economy worsen as well as the situation in the banking sector. Data show that banking system of these countries suffers from problems largely influenced by its huge debt to IMF, political situation, financial crisis, internal situation and other political factors. The authorities of banking system in selected countries took some measures in order to improve financial position and to slowdown the negative consequences of the global crisis. Keywords: Banks, ROA, ROE, Non-performing loans, Reforms, Crisis 1. INTRODUCTION The banking sector is considered to be an important source of financing for most businesses. Increase in the financial performance leads to more improved functions and activities of any 68 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1279 Title A name given to the resource Quality Costs Accounting And A Firm Application Author Author Hilmi , Kirlioğlu Abstract A summary of the resource. Contemporarily, the competition in the markets has thoroughly heated up. Many companies try to decrease their costs in order to survive in this cruel market. In this respects, the quality costs gain importance in all over the world and in Turkey, too. Companies need to gaining profit for sustainability. And also gaining profit is one and first of companies’ two basic goals. In order to achieve this first goal and to gain sustainability, companies have to provide customers’ and potential costumers’ needs and demand as well as they do, and also they should gain sustainable competitive advantage by improving its technology, and its product quality. With the globalization and non-boarding trading, the markets turned into cruel competitive place. In that kind of markets, unfortunately, using low pricing model is not enough for selling goods and services. Companies also need to provide high quality products. In other words, being successful in the global markets, the companies need to have not only low price products, but also high quality products. As it is stated above, in order to gain sustainable competitive advantages in the market, companies need to act two actions at the same time. Firstly, improving the quality of products and services causes gaining sustainable competitive advantages in the market. Secondly, decreasing production costs by improving efficiency in order to promoting the product, brand or company in the market.In addition, the quality cost system utilizes the production efficiency. Therefore, the quality cost system should be established in every company in which it can be applicable. Keywords: Total Quality Management, Quality Costs, Managerial Accounting. Date A point or period of time associated with an event in the lifecycle of the resource 2012-05-31 Keywords Keywords. Conference or Workshop Item PeerReviewed H Social Sciences (General),HB Economic Theory,HG Finance,HJ Public Finance https://omeka.ibu.edu.ba/files/original/2655aceaeacff6a92b5e2a2a887acd80.pdf 7fbfbc48be611c8ffd8b5a25ab80f691 PDF Text Text Quality of Education and Intellectual Capital: Analysis of the Competitive Position of Universities Dino Arnaut Faculty of Economics, University of Zenica Bosnia and Herzegovina arnaut.dino@gmail.com Abstract: Intellectual capital opened the way for research into this area, which forms the basis of the new knowledge economy. The development of intellectual capital has a growing impact on the economic and social processes. Intellectual capital is now even more important than tangible assets. If a country wants to develop and become economically strong and enlightened it needs to build a modern and flexible and well suited and efficient education system that is ready and able to responses to all the global technological and social changes, as well as the local current social needs. To achieve this there is a need to establish institutional cooperation between universities, governments, research institutions. Education has a double meaning that is economic and social. It represents a means to improve economic standards as well to spread spiritual perspective and improvement of own intellectual and emotional life. Sociologically it is established that education is beneficial both for the individual and for society. Therefore, it not only contributes to higher profits for the individual, but also its better social status and reputation of the company, financial and social security, development of identity and self-confidence, self-esteem development and personal satisfaction, better understanding of the political situation and greater social engagement and cohesion, respect for social norms, reducing stereotypes and prejudice, improving gender relations and better education of children, development of tolerance and ethical behaviour, aspirations towards healthy living, and better physical and mental health. Investments in education are an important factor for competitiveness, growth and development of a country. Education has a key role in improving the human capital and the development of a knowledge based society. It contributes to the unification of life chances, personality development in the spirit of liberty, intellectual development and spiritual and cultural richness. The aim of this paper is to investigate connection between service quality and competitive position of Universities in Bosnia and Herzegovina to help developing new and improved academic programs that will contribute development of future strategies based on intellectual capital. Keywords: Intellectual Capital, Quality of Education, Education System, Service Quality, Bosnia and Herzegovina JEL Classification: O34, I2, M3 Introduction Over the last few decades, the quality of service has been gained and takes tremendous attention from both managers and academics due to their significant impact on business results, cost reduction, customer satisfaction and loyalty, as well as profitability. Therefore, quality is increasingly seen as an investment for a company or institution, where efforts to improve and improve it result in an increase in the number of customers (consumers), as well as increase the volume of purchases from existing customers, which also leads to growth of company profit. 84 �To gain competitive advantage among other higher education institutions, universities require greater focus on service quality. Therefore, universities want and try to examine their current strategic positions by evaluating existing services and adapting to consumer perceptions to improve or gain their leadership position. Intellectual capital (IC) opened the way for research into this area, which forms the basis of the new knowledge economy. The development of intellectual capital has a growing impact on the economic and social processes and now it is even more important than tangible assets. If a country wants to develop and become economically strong and enlightened it needs to build a modern and flexible and well suited and efficient education system that is ready and able to responses to all the global technological and social changes, as well as the local current social needs. To achieve this there is a need to establish institutional cooperation between universities, governments, research institutions. Therefore, just defining and measuring service quality at universities can serve as an initial step towards more orientated and friendly education services for students, as well as improving the overall provision of services in educational institutions. This provides room for the establishment of clear consumer-oriented standards and the establishment of benchmarks for quality service comparison both in public and private universities. Education has a double meaning that is economic and social. It represents a means to improve economic standards as well to spread spiritual perspective and improvement of own intellectual and emotional life. Literature review European higher education and research organizations have undergone a deep transformation process over the past decades. This process can be analysed by considering two parallel processes. The first process is the theoretical insight that provides two perspectives of evolutionary significance. These are the so-called two knowledge production methods (Gibbons et al., 1994) and the triple Helix model (Etzkowitz and Leydesdorff, 1996). Both perspectives emphasize the emergence of a new paradigm of knowledge production that is defined by transdisciplinary and research-oriented solutions. In this scenario, the relationship between university, industry and government becomes more dynamic and mutually dependable and conditioned, thus contributing to the creation of hybrid organizations, the creation of alliances between universities and firms, and the creation of a trilateral network and other forms of cooperation that enhance the quality of education. Therefore, universities themselves are interacting with various alternative knowledge producers (Gibbons, 1998, p.1). This framework is most commonly accepted in professional literature and has become crucial for understanding the role of universities and their connection with other actors in the current economy (Mowery and Sampat, 2004). 85 �The second process is an ever-growing interest in higher education institutions and intensive discussions about the role they play in the paradigm shift. This process is primarily represented by the European Commission's (2006) policy actions and the resulting collective process in some institutions such as the European Association of Universities (EUAs), the European Association of Managers and Research Administrators (EARMA), as well as individual groups of experts, such as the group responsible for reporting on intellectual capital to increase research, development and innovation in small and medium-sized enterprises (RICARDIS report). Adaptation of management and reporting of IC in companies to other types of organizations developed in two different ways. First, it primarily deals with the assessment of intangible assets aggregated into the mezo (communities, industry, etc.) and at the macro level (cities, regions and nations). Thus, the World Bank has organized various conferences on this issue in the period 2005-2007. (Chatzkel, 2006). Since 1999, efforts have been made to measure the state-level IC, starting with Sweden (Rembe, 1999), Israel (Pasher, 1999) and the Arab region (Bontis, 2004), and so on. Another way suggests the use of IC framework at the micro level for public institutions. Some papers involved in this group are based on the principles of new public management. These principles have been used by governments since the 1980s to improve the efficiency of the public sector and the quality of their services, through the decentralization process and the application of competition, by treating consumers of public services as consumers. In this way, governments give a certain institution more autonomy to fulfil its goals and reward the effect (Borins, 1995), which requires measurement and reporting mechanisms, in accordance with appropriate revision rules. This phenomenon was initially seen as a problem for developed countries, particularly Anglo-Saxon, with best case studies in Great Britain, Australia and New Zealand (Barzelay 2001, Guthrie et al., 2004). USA, Canada and, to a lesser extent, some European countries have caught their attention (Borins 2002, Guthrie et al., 2004), and the principles are provisionally applied in some African developing countries (Larbi, 1999). This paper shares the same opinion and agrees with the views of Mouritsen et al. (2005) and Leitner et al. (2005) in the sense that the IC framework is a valid attempt to meet the new demands of public institutions and that the IC report is useful tool for internal and external purposes. The IC report can help identify structural and personal strengths and weaknesses. It discovers the current state of the various university missions and can be used as a control and monitoring instrument (Altenburger and Schaffhauser-Linzatti, 2006). The purpose of the ICU report, which is also an integral part of the OEU project, is to make recommendations for publishing university research information. In accordance with the recommendations of the European Commission (2006), the report presents a logical shift from management and internal strategy, based on the design of the vision and objectives of the institution, to the publication of indicators considering the previous guidelines valid for companies (Meritum Protect, 2002), and for the universities (Leitner and Warden, 2004). 86 �The indicators have classified the next well-known taxonomy into three categories of capital, namely human, organizational and relational capital. Within each of these categories, each title monitors the strategic issues defined in the OEU guide. The guide itself suggests that indicators are expressed both in absolute and relative terms to make easy comparisons easier. University rankings Over the last ten years there has been an increasing interest in ranking the university. The annual ranking of world universities is published by many, starting with QS for the Times Higher Education Supplement, the Shanghai Jiao Tong University, the Higher Education and Accreditation Council of Taiwan, and Cybermetrics Lab in CSIC. The Academic Ranking of World Universities (ARWU) is being published each year by the Shanghai Jiao Tong University of Higher Education Institute. This is the first level of ranking with the intent of worldwide coverage based on the academic or research effectiveness of the university. Its indicators include alumni and staff that received Nobel or similar prestigious awards, highly quoted researchers in popular research fields, articles published in selected top magazines, indexed index articles by Thomson-ISI, and performance by academics. The Web Ranking of World Universities or Webometrics List is being conducted since 2004 (Aguillo et al, 2008) by Cybermetrics Lab, a research group of the Spanish National Research Council (CSIC). They use web data downloaded from commercial search engines, including web pages, rich format documents (pdf, doc, ppt and ps), works indexed by Google Scholar (this indicator was added in 2006) and many external links as a measure Link visibility or impact. Table 1: Different emphasis of different university rankings Orientation to students US News & Orientation to Research Webometrics Shanghai Taiwan Leiden WR ARWU HEEACT CWTS THE-QS WR McLeans Costs Opinions Services Impact Scientific contribution Web visibility Prestige Web presence Awards Impact Excellence Source: Authors’ own work The specifics of university rankings are shown in Table 1. As can be seen, certain rankings are strictly based on research data. Webometrics, on the other hand, has one weakness, and many universities do not have a strict web policy. This is not such a big deal with the universities in this research, so this weakness may be neglected. 87 �Compared to the indicators of intellectual capital of higher education institutions and ranking of universities, we conclude that there are common indicators. Therefore, as part of this research, the Webometrics list will be used as the rank of success of the tested universities and their competitiveness on the market of Bosnia and Herzegovina. Their position will be tested and compared with their perceived quality of service. Service Quality There is a lot about service quality in the literature itself. We have many quality definitions as well as its concept and its different dimensions. Thus, according to Juran (1988), quality is a convenience for use, that is, to what extent the product successfully serves the purpose of the user when used. Crosby (1982) argues that quality is in line with requirements. Gronroos (1984) is one of the first academics to focus on quality of service. According to him, the quality of service consists of two dimensions, technical quality and functional quality. Technical quality refers to the outcome, that is to what the customer has received from the service itself and can be measured in a similar way as the quality assessment of the product. On the other hand, functional quality refers to the process of evaluating the way of providing services. Image is an important factor affecting the service quality, and serves as a filter in perceiving quality of service as favourable, neutral or unfavourable (Gronroos 1984, 2000). In a sophisticated 1988 study, Parasuraman et al. have reduced the original number of service quality dimensions from ten to five, claiming that these five dimensions fully cover the domain of service quality. Thus, the five finals of quality of service, according to Parasuraman et al. (1985) are: • Tangibles - the physical dimension of a service, such as state of the building, equipment, staff appearance, and the like. • Reliability - the ability to deliver the promised service, reliably, accurately and on time. • Responsiveness - willingness and willingness to help customers and provide fast service. • Assurance - knowledge and kindness of employees and their ability to inspire and stimulate trust and confidence. • Empathy - attitude, individualized relationship, and attention paid by the company towards its customers (customers). Parasuraman et al. (1988) have also developed a service quality assessment tool called SERVQUAL, which is a multifaceted scale with good reliability and validity. The scale consists of two parts evaluating the quality of the service. The first part is a section of expectation that contains 22 statements to measure the expectation of quality of service by the consumer (customer). The second section is a perception section that contains the appropriate set of 22 statements to measure how users perceive (experience) the quality of the service. In these sections, for expectations and perceptions, use the same phrases with the difference that one asks about what the respondent expects from an excellent service provider, and the other asks about the actual, perceived, service provided. Consumers give their grades on the expectations and 88 �perceptions of the quality of services on a seven-point Likert scale, which range from completely disagree (1) to completely agree (7). The quality of services is calculated by the difference between estimated expectations and perceptions, that is, the gap between them. Parasuraman et al. (1994) found that the SERVQUAL scale is a very useful starting point for measuring the quality of services. Three contrastive approaches to quality measurement can be classified within the education. The first approach adjusts the SERVQUAL instrument (Rigotti and Pitt, 1992, Cuthbert, 1996a, 1996b, Owlia and Aspinall, 1996, Oldfield and Baron, 2000, O'Neill and Palmer, 2001). The other uses methods for evaluating the quality of teaching and learning (Entwistle and Tait, 1990; Ramsden, 1991; Marsh and Roche, 1993), while the third uses methods for assessing the quality of overall student experience (Harvey et al., 1992, Roberts and Higgins, 1992; Hill, 1995; Aldridge and Rowley, 1998; Gaell, 2000; Watson et al., 2002; Wiers-Jenssen et al., 2002). In the studies in which SERVQUAL is applied, it is necessary to modify the questionnaire, and there is no consensus on the dimensions of service quality and the importance of each dimension in the context of higher education. However, studies support the importance and reliability of this methodology within the measurement of the quality of higher education. Tan (1986) conducted a review of the methods used to assess the quality of teaching in higher education in the USA area back in 1986, in which three types of studies are differentiated, namely reputations involving the evaluation of subjects by experts, objective indicators and quantitative studies. Methodology Four universities have been chosen for this study to conduct a study on the quality of services in higher education. Of these four universities, two are public and two are private. They all offer programs at bachelor and master level, and three of them also offer doctoral studies (PhD). The survey sample consists of 388 undergraduate and master students. Data collection was carried out during 2013. Since it was difficult to include students from all universities in the territory of Bosnia and Herzegovina, we selected to include four university students, two public and two private, based on their ranking according to Webometrics. Universities were selected according to the criteria of the two best public and private universities in the territory of Bosnia and Herzegovina according to Webometrics ranking. These were the following universities: • University of Sarajevo (UNSA). • University of Zenica (UNZE). • International Burc University (IBU). • International University of Sarajevo (IUS). 89 �Using the Sample Size Calculator9, we calculated the desired sample size. This calculator is presented as a public service survey software by Creative Systems Research. Our target population is 128.119 students in the territory of Bosnia and Herzegovina. Therefore, with confidence level of 95% and confidence interval of 5 our calculated needed sample size was 383 students. Also, the number of distributed polls was equally represented by universities. The research tool was a structured survey consisting of 54 questions. This instrument is chosen because it gives researchers the ability to collect data on a variety of factors and thus achieve a larger sample. We collected 388 fully completed surveys via electronic and printed channels, which allowed us to reach the planned sample size based on the level of reliability and confidence intervals. Results As we have already said, in comparison with the indicators of the intellectual capital of higher education institutions and ranking of universities we can see that there are common indicators. Therefore, as part of our research, the Webometrics list will be used as the rank-list of successful universities tested and their competitiveness on the market of Bosnia and Herzegovina. The university's position is compared to their overall perceived quality of service in all dimensions (Table 2). As can be seen in Table 3, ranking according to the Webometrics ranking of the University at the level of Bosnia and Herzegovina corresponds to the rankings obtained according to the overall perceived quality of service of the mentioned universities. Table 2: Total mean value of perceived service Mean UNSA UNZE IBU IUS Total Tangibles 4.05 3.86 3.83 3.83 3.89 Reliability 3.62 3.51 3.48 3.47 3.52 Responsiveness 4.43 4.25 4.25 4.19 4.28 Assurance 4.02 3.90 3.82 3.74 3.87 Empathy 3.84 3.72 3.60 3.56 3.68 Service quality 4.21 3.85 3.85 3.81 3.93 Total mean 4.03 3.85 3.81 3.77 Source: Authors’ own work 9 The Sample Size calculator can be used and found at http://www.surveysystem.com/sscalc.htm#one 90 �We can conclude that the competitive position (ranking of the university) is directly dependent on the overall quality provided by the given institution. Therefore, we confirm our claim that the quality of education services directly affects the competitive position of the educational institution. Univerzitet World ranking Ranking in Bosnia and Herzegovina Mean of total perceived quality of universities University of Sarajevo (UNSA) 1859 1 4.03 University of Zenica (UNZE) 3531 2 3.85 International Burch University (IBU) 7400 8 3.81 International University of Sarajevo (IUS) 7912 9 3.77 It is also noteworthy that the greatest difference in the mean values of total perceived quality is precisely between the University of Sarajevo, while remaining at approximately the same average values. It also contributes to the high position of the University of Sarajevo at the Webometrics rankings. Conclusions The research results obtained support the previous quality service studies conducted by various researchers, and concluded that these five dimensions represent high quality services. This research serves as an addition to other published research to demonstrate that this model is applicable to a wide range of services, including the higher education sector. Ranking according to the Webometrics ranking of the Universities at the level of Bosnia and Herzegovina corresponds to the rankings obtained according to the overall perceived quality of service of the mentioned universities. And we see that the competitive position (ranking of the university) is directly dependent on the overall quality provided by the given institution. This study also has several limitations. First, not all universities are involved in this study so that for future studies it would be good to include all private and public universities in the territory of Bosnia and Herzegovina and to include research institutes. In this way, the sample would be even more representative and would increase the validity and validity of the research results. Secondly, this research is necessary to be replicated by other researchers to further determine and confirm that the modified SERVQUAL scale used in higher education services has its relevance and validity. 91 �The basic feature of today's market is the vast number of competitors that are constantly struggling for a limited number of users. Therefore, service companies are increasingly adopting customer relationship management concepts, especially due to constant user-specific, individualuser-specific access. Higher education institutions, as well as service providers, have the potential to create an advantage and maintain and develop a long-term relationship between them, as providers of services, their service users, students, solving their problems and making them loyal to institution. In this way, in the long run, the clients themselves promote the institution and in some ways become the walking image of the higher education institution. 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Tan, D., 1986, ‘The assessment of quality in higher education: a critical review of the literature and research’, Research in Higher Education, 24(3), pp. 223–265. Watson, S., Saldanaa. & Harvey, L., 2002, The 2002 Report on the Student Experience at UCE (Birmingham, Centre for Research into Quality, UCE). Wiers-Jenssen, J., Stensaker, B. & Grogaard, J. (2002), ‘Student satisfaction: towards an empirical deconstruction of the concept’, Quality in Higher Education, 8(2), pp. 183– 195. 94 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 3644 Title A name given to the resource Quality of Education and Intellectual Capital: Analysis of the Competitive Position of Universities (doi: 10.14706/icesos177) Author Author Arnaut, Dino Abstract A summary of the resource. Abstract: Intellectual capital opened the way for research into this area, which forms the basis of the new knowledge economy. The development of intellectual capital has a growing impact on the economic and social processes. Intellectual capital is now even more important than tangible assets. If a country wants to develop and become economically strong and enlightened it needs to build a modern and flexible and well suited and efficient education system that is ready and able to responses to all the global technological and social changes, as well as the local current social needs. To achieve this there is a need to establish institutional cooperation between universities, governments, research institutions. Education has a double meaning that is economic and social. It represents a means to improve economic standards as well to spread spiritual perspective and improvement of own intellectual and emotional life. Sociologically it is established that education is beneficial both for the individual and for society. Therefore, it not only contributes to higher profits for the individual, but also its better social status and reputation of the company, financial and social security, development of identity and self-confidence, self-esteem development and personal satisfaction, better understanding of the political situation and greater social engagement and cohesion, respect for social norms, reducing stereotypes and prejudice, improving gender relations and better education of children, development of tolerance and ethical behaviour, aspirations towards healthy living, and better physical and mental health. Investments in education are an important factor for competitiveness, growth and development of a country. Education has a key role in improving the human capital and the development of a knowledge based society. It contributes to the unification of life chances, personality development in the spirit of liberty, intellectual development and spiritual and cultural richness. The aim of this paper is to investigate connection between service quality and competitive position of Universities in Bosnia and Herzegovina to help developing new and improved academic programs that will contribute development of future strategies based on intellectual capital. Keywords: Intellectual Capital, Quality of Education, Education System, Service Quality, Bosnia and Herzegovina Date A point or period of time associated with an event in the lifecycle of the resource 2017 Keywords Keywords. Conference or Workshop Item PeerReviewed H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/38241da3fc5ef5b9474be1c93fe89fa7.pdf 6bba05f2040411ac0ec700b0bff6b369 Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Title A name given to the resource IT Senior Design Projects Description An account of the resource The IT Senior Design Projects (SDPs) category showcases innovative and practical final-year capstone projects developed by undergraduate and graduate students in the field of Information Technology. These projects represent the culmination of students' academic and technical expertise, demonstrating their ability to solve real-world problems through software and hardware solutions. Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Title A name given to the resource Quantitative Analysis of Voice Recognition Models Author Author Faris Muhović Abstract A summary of the resource. With the growing adoption of virtual communication and voice-driven applications, the need for accurate, real-time, and privacy-conscious transcription tools has become critical. Existing solutions largely rely on cloud infrastructure, introducing concerns around latency, cost, and data privacy. This project investigates whether modern speech recognition models can perform competitively in fully offline environments while maintaining accuracy and responsiveness. To this end, we conducted a comparative evaluation of four voice transcription model, Whisper, Faster-Whisper, Wav2Vec2, and Vosk, using the AMI Meeting Corpus. Each model was assessed based on four key metrics: Word Error Rate (WER), Character Error Rate (CER), BLEU, and ROUGE-L. Our findings demonstrate that Faster-Whisper outperforms the others in accuracy and latency, making it a strong candidate for edge deployment. Building upon this analysis, a lightweight desktop application was developed using Python and PyQt5. The app captures microphone input in real time, applies VAD (Voice Activity Detection) and loudness filtering to reduce noise, and transcribes valid segments using Faster-Whisper. Additionally, the tool integrates Ollam, a local LLM engine to optionally generate intelligent responses to transcribed text. This work contributes a dual outcome: a detailed empirical evaluation of modern transcription models on realistic meeting audio, and a functional, privacy-preserving voice assistant prototype for local systems. The results highlight the feasibility and value of running sophisticated voice AI tools on personal machines without cloud dependency, paving the way for secure adoption in sensitive domains such as legal, healthcare, and enterprise communication. Keywords Keywords. speech recognition, Whisper, Faster-Whisper, transcription models, real-time, privacy, WER, PyQt5 machine learning sdp