248 10 3494 https://omeka.ibu.edu.ba/files/original/dbb05b53cd88fed26dc5fe38f7040e60.pdf 370d2b83de3ed2e2cd477971bcad12b1 PDF Text Text Journal of Economic and Social Studies Stock Selection Based on Discriminant Analysis: Case of Capital Market of Bosnia and Herzegovina Jasmina Okičić University of Tuzla Bosnia-Herzegovina jasmina.okicic@untz.ba Sonja Remetić-Horvath University of Vienna Wien, Östereich Baris Büyükdemir Ceros Holding AG Ceros Menkul Değerler AS İstanbul, Turkey Abstract: The main goal of this paper is to scientifically Keywords: discriminant analysis, examine and propose new approach of stock selection and stock selection, stock return, analysis based on multivariate technique, i.e. discriminant capital market of Bosnia and analysis, in order to help investors, individual and Herzegovina institutional, in their decision making process, especially in case of underdeveloped capital markets. Therefore, in this paper we investigate the cross—sectional relation between the independent variables of the model, comprised of beta coefficient and some fundamental variables as well as the average stock returns on the underdeveloped capital market of Bosnia and Herzegovina. We concluded that discriminant analysis is a useful quantitative tool that can help investors in shaping their investment strategies. We also found that the beta coefficient, market capitalization and realized historical return have discriminatory capabilities in case of the capital market of Bosnia and Herzegovina. The real implications of this research can be seen in the shaping of investment strategies of potential investors looking to diversify their portfolios. The main limitations of this study are to be found in the shorter available financial time series in newly formed capitalistic economy, missing data due to the lack of collective records on levels of securities offerings issues. JEL Classification: G11, C38 Article History Submitted: 06 June 2013 Resubmitted: 17 October 2013 Accepted: 11 December 2013 http://dx.doi.org/10.14706/JEC OSS11421 5 �Jasmina Okičić, Sonja Remetić-Horvath, Baris Büyükdemir Introduction The stock selection is one of the most important decisions an equity investor has to make. The use of quantitative models and methods of stock selection has many advantages in the portfolio construction. For underdeveloped capital markets, however, quantitative stock selection models are still rarely used. Therefore, and based on theoretical inferences and empirical evidence on stock selection process, the main goal of this paper is to scientifically examine and propose new approach of stock selection and analysis based on multivariate technique, i.e. discriminant analysis, in order to help investors, individual and institutional, in their decision making process, especially in case of underdeveloped capital markets. These markets are generally characterized by low market capitalization, poor liquidity and turnover, weak legal protection for minority shareholders, low correlation with developed and emerging capital markets, etc. All of this directly determines investment decision making process on one hand and on the other may have crucial impact on portfolio performance as well. Therefore, in this paper we investigate the cross – sectional relation between the independent variables of the model, comprised of beta coefficient and some fundamental variables as well as the average stock returns on the capital market of Bosnia and Herzegovina. Since the goal defines objectives of any research, the main objective of this paper is stock selection process based on discriminant analysis. Having in mind the above said, the central research hypothesis shall be as follows: Discriminant analysis is a useful quantitative tool that can help investors in shaping their investment strategies. The paper is organized as follows. After introduction, the first section gives a short overview of the recent literature that is relevant to the main objective of the paper. The second section brings description of our research methodology. In the third section we explain the data and finally the fourth section, that is the centre of the paper, contains analysis of the result of the stock selection process based on discriminant analysis. In the end, we give some final remarks and conclusions. Literature Review So far, a significant number of scientific researches have been conducted on the use of quantitative models and methods of stock selection. Siqueira, Otuki and Da Costa (2012) used discriminant analysis in order to analyze nexus between stock return and some selected fundamental variables. They examined stocks traded on Sao Paulo Stock Exchange and found out that the beta coefficient has discriminatory capabilities. 6 Journal of Economic and Social Studies �Stock Selection Based on Discriminant Analysis: Case of Capital Market of Bosnia and Herzegovina Şenol, Dinçer and Timor (2012) proposed stock selection model based on fundamental and technical analysis by using artificial neural networks and support vector machines. Schadler and Eakins (2001) examined a stock selection model using Morningstar’s style box. Basing on the Gordon model perspective and applying multiple criteria decision making (MCDM), Lee, Tzeng, Guan, Chien and Huang (2009) explore the influential factors and relative weight of dividend, discount rate, and dividend growth rate. Among the eight evaluation criteria, market beta was the most important factor influencing investment decisions, followed by dividend growth rate and risk-free rate. In their research, Shiuh-Nan, Chin-Tsai and Wang-Ching (2007) chose relative operating performance and stock price evaluation as stock classification criteria, and applied them to divide the sample stocks into four types, i.e.: value, monitor, speculative and avoidance. Kuang Yu and Chuen-Jiuan (2009) combined the moving average autoregressive exogenous (ARX) prediction model with grey systems theory and rough set (RS) theory to create an automatic stock market forecasting and portfolio selection mechanism. Chunhachinda, Dandapani, Hamid and Prakash (1997) investigated portfolio selection and skewness. The empirical findings suggested that the incorporation of skewness into an investor's portfolio decision causes a major change in the construction of the optimal portfolio. Sorensen, Miller and Ooi (2000) introduced an alternative approach to traditional methods of stock screening based on a statistical technique known as classification and regression tree (CART). In their paper, Achour, Harvey, Hopkins and Lang (1998) examined stock selection in emerging markets of Malaysia, Mexico and South Africa, where they presented a comprehensive, market – by – market analysis of the information in firm attributes for portfolio strategies. Van der Hart, Slagter and Van Dijk (2002) concluded that within emerging markets, value, momentum and earnings revisions strategies are successful in selecting well performing stocks. The excess returns of these strategies are strongly significant. Combining the factors into one model enhances the performance. 7 �Jasmina Okičić, Sonja Remetić-Horvath, Baris Büyükdemir Theoretical Background According to Huberty and Olejnik (2006) some of the ideas associated with discriminant analysis (DA) go back to around 1920 when the English statistician Karl Pearson (1857–1936) proposed what was called the coefficient of racial likeness (CRL), a type of intergroup distance index. The idea of multivariable intergroup distance was translated to that of a linear composite of variables derived for the purpose of two – group classification by R. A. Fisher (1890–1962) in the 1930s. The distance and variable composite ideas appeared in print prior to Fisher’s seminal discriminant analysis article in 1936. Discriminant Analysis: A Methodological Overview Basically, discriminant analysis is a multivariate statistical method designed to set up a model to predict group memberships. The model consists of discriminant functions that appear based on a linear combination of predictive variables that provide the best discrimination between groups. This analysis is the appropriate statistical technique when the dependent variable is categorical and the independent variables are metric. Brown and Wicker (2000, p. 209) claim that discriminant analysis is a powerful descriptive and classificatory technique developed to: (1) describe characteristics that are specific to distinct groups; and (2) classify cases (i.e., individuals, subjects, participants) into preexisting groups based on similarities between that case and the other cases belonging to the groups. Discriminant analysis results with the discriminant function (or variate), i.e. linear combination of the independent variables that are capable to discriminate between a priori defined groups. Discrimination is achieved by setting the variate’s weights for each variable to maximize the between – group variance relative to the within group variance (Hair, Anderson, Tatham and Black, 1998, p. 244). Each discriminant function has the general form (Brown and Wicker, 2000, p. 219): D = a + b1 x1 + b2 x2 +  + b p x p , (1) where D is the discriminant score, a is the y - intercept of the regression line, b is the discriminant function coefficient, x is the discriminator variable raw score, and p is the number of discriminator variables. Discriminant analysis multiplies each 8 Journal of Economic and Social Studies �Stock Selection Based on Discriminant Analysis: Case of Capital Market of Bosnia and Herzegovina independent variable by its weight and adds these products together. As a result, discriminant score for each independent variable in the analysis is calculated. By averaging these scores for all the independent variables within a particular group, we get the group mean. This mean is referred to as centroid that indicate the most typical location of any independent variable from a particular group, and comparison of the group centroids shows how far apart groups are along the dimension being tested (Hair, Anderson, Tatham and Black, 1998, p. 245). Data The capital market of Bosnia and Herzegovina is characterized by territorial division, the incompatibility of entity institutions and of legal regulations; which negatively affect the investment climate and the liquidity of securities. According to the MSCI Global Market Accessibility Review (2012), capital market of Bosnia and Herzegovina is included in the so called standalone markets. These markets include all country markets covered by MSCI but not included in the MSCI International Indices. This category includes potential candidates for the MSCI Frontier Markets Indices that currently do not meet the minimum liquidity requirements as well as markets that are currently partially or fully closed to foreign investor. Furthermore, stocks lending and short selling are activities that are either not developed or completely prohibited in all standalone market countries and the summary does not highlight these issues on a country-by-country basis. Basically, the MSCI Global Market Accessibility Review (2012) provides an evaluation of the four market accessibility criteria, which are: (1) openness to foreign ownership; (2) ease of capital inflows/outflows; (3) efficiency of the operational framework and (4) stability of the institutional framework. In case of capital market of Bosnia and Herzegovina, the evaluation of the above mentioned criteria is given in Table 1. 9 �Jasmina Okičić, Sonja Remetić-Horvath, Baris Büyükdemir Table 1. Assessment results for the capital market of Bosnia and Herzegovina Criteria Openness to foreign ownership Investor qualification requirement Foreign ownership limit (FOL) level Foreign room level Equal rights to foreign investors Ease of capital inflows / outflows Capital flow restriction level Foreign exchange market liberalization level (there is no offshore currency market ) Efficiency of the operational framework Market entry Investor registration and account set up Market organization Market regulations (not all regulations can be found in English) Competitive landscape Information flow i Market infrastructure Clearing and Settlement (there is an absence of a real DVP system and the prefunding of trades is required in Republic of Srpska) Custody ii Registry / Depository (there are two central depositories, each of them acting as central registry) Trading (there is a very limited level of competition among brokers which can lead to high trading costs) Transferability (in-kind transfers and off-exchange transactions are prohibited) Stock lending Short selling Stability of institutional framework Evaluation ++ ++ ++ ++ ++ + ++ + -/? -/? ++ ++ -/? -/? + -/? + Source: The MSCI Global Market Accessibility Review (2012), p. 45 Note: ++: no issues; +: no major issues, improvements possible; -/?: improvements needed / extent to be assessed The capital market of Bosnia and Herzegovina consists of two independent regions that have separate stock exchanges, i.e. The Sarajevo Stock Exchange or SASE which operates in Federation of Bosnia and Herzegovina and The Banja Luka Stock Exchange or BLSE which operates in Republic of Srpska. Each of the above mentioned stock exchanges has its own regulation and indices calculated on daily 10 Journal of Economic and Social Studies �Stock Selection Based on Discriminant Analysis: Case of Capital Market of Bosnia and Herzegovina basis. SASE, for example, has three indices, i.e.: (1) Bosnian Investment Fund Index - BIFX which is the first index published by the SASE. It consists of the stocks of the 11 investment funds registered in the Federation of Bosnia and Herzegovina (formerly Privatization Investment Funds - PIFs). By its purpose, it is considered a benchmark index, whose main goal is to provide investors a general view and evaluation of the current market trends in the segment of investment funds listed at the SASE. iii (2) The Sarajevo Stock Exchange Index 10 – SASX-10 is the main index on the SASE. It depicts the price movement of the top 10 issuers on the SASE (excluding investment funds) ranked by market capitalization and frequency of trading. iv (3) The Sarajevo Stock Exchange Index 30 – SASX-30 is the index of the Primary Free Market of the SASE. It depicts the price movement of the issuers on the Primary Free market, which is reserved for the most liquid issuers from the free market. Its main goal is to serve as a general benchmark index. v On the other hand, BLSE has six indices, but only three are active. These indices are: (1) The Investment Funds Index of the Republic of Srpska – FIRS which consists of the stocks of investment funds that fulfill selection criteria vi. (2) The Stock Exchange Index of the Republic of Srpska – BIRS which consists of the socks of from 5 to 30 issuers. Number of issuers whose stocks may be included in the BIRS depends on the number of the issuers listed on the BLSE Official Market and the number of stocks that fulfill criteria for the BIRS composition. vii (3) The Index of Electric Energy Sector of the Republic of Srpska – ERS10 which consists of the stocks of the 10 companies from the power utility sector which are listed on the BLSE. viii The only index that represents stocks traded both at SASE and BLSE is the Bosnian Traded Index or BATX ix. It is a capitalization-weighted price index x which is made up of the most actively traded and highest capitalized stocks traded at the SASE and BLSE. The index is calculated and disseminated on a real-time basis in EUR, USD and BAM. BATX is designed as a tradable index to be used as an underlying instrument for structured products and for standardized derivatives (futures and options). xi Sample Given the large number of available, but not actively traded securities, in this paper we will use subset of the most actively and highest capitalized stocks traded on SASE and BLSE. Since BATX incorporates the most liquid securities from the capital market of Bosnia and Herzegovina (BH Telecom – BHTSR, Bosnalijek - BSNLR, 11 �Jasmina Okičić, Sonja Remetić-Horvath, Baris Büyükdemir Fabrika duhana Sarajevo - FDSSR, JP Elektroprivreda BiH - JPESR, Nova banka ad Banja Luka - NOVB-R-E, Telekom Srpske - TLKM-R-A) xii, we will use them as a sample xiii in the further process of stock selection as well as some of the top 10 issuers in 2012 (Tvornica cementa Kakanj d.d. Kakanj - TCMKR, Elektro grupa d.d. Jajce - ELGJR, ZIF BIG Investiciona grupa d.d. Sarajevo - BIGFRK3, ZIF Bosfin d.d. Sarajevo - BSNFRK2, ZIF MI Group d.d. Sarajevo - MIGFRK2, IK Banka d.d. Zenica - IKBZRK2, ZIF Zepter fond ad Banja Luka - ZPTP-R-A, ZIF Jahorina Koin ad Pale – JHKP-R-A). Our observed period of time is December 2009 - December 2012. Top 10 issuers by turnover both on BLSE and SASE in 2012 are presented in Table 2. Table 2. Top 10 issuers by turnover in 2012 Rank Issuer (SASE) Turnover (in BAM) 1. Bosnalijek d.d. Sarajevo 35.762.756,14 2. 3. 4. 5. 6. 7. 8. BH Telecom d.d. Sarajevo Tvornica cementa Kakanj d.d. Kakanj Fabrika duhana Sarajevo d.d. Sarajevo Elektro grupa d.d. Jajce ZIF BIG Investiciona grupa d.d. Sarajevo ZIF Bosfin d.d. Sarajevo ZIF MI Group d.d. Sarajevo 4.716.269,56 4.531.367,17 4.256.016,17 4.149.400,00 2.430.672,12 2.269.729,58 2.185.090,45 9. Dobrinja d.d. Ilidža 2.070.613,85 10. IK Banka d.d. Zenica 1.889.629,11 Issuer (BLSE) Republika Srpska T bills Republika Srpska izmirenje ratne štete Telekom Srpske ad Banja Luka Republika Srpska stara devizna štednja Kaldera Company d.o.o. Laktaši Republika Srpska izmirenje ratne štete Republika Srpska izmirenje ratne štete ZIF Zepter fond ad Banja Luka Republika Srpska izmirenje ratne štete ZIF Jahorina Koin ad Pale Turnover (in BAM) 14.841.884 14.175.515 12.979.869 7.616.466 6.624.484 4.525.190 4.191.977 4.161.346 2.781.926 2.564.735 Source: Annual Report 12 (2012), p. 21 and Annual Statistical Report (2012), p. 2 12 Journal of Economic and Social Studies �Stock Selection Based on Discriminant Analysis: Case of Capital Market of Bosnia and Herzegovina Dependent and independent variables Since, index BATX is made up of the most actively traded and highest capitalized stocks traded at the SASE and BLSE we coded all issuers that, at the moment when this research was done, were included in the index mentioned, with number 1 (Highest liquidity). And those issuers from our sample that, at the time this research was conducted, were not included in BATX we coded with the number 2 (Lowest liquidity). In this context, liquidity may be defined as possibility to convert stocks into cash and vice versa without affecting the price or with minimal impact on it. If we denote successive stock price xiv made at time t and t+1 as Pt and Pt+1, respectively, then continuous compounding transforms a stock price series {Pt } into a return series {rt } as: rt = ln Pt . Pt −1 (2) The independent variables of the model were comprised of following variables: beta coefficient, market capitalization, turnover and return. The beta coefficient was estimated as: β= cov(ri , rm ) , σ 2 (rm ) (3) where cov(ri , rm ) is the covariance between the asset returns and the returns on the selected indices, and σ 2 (rm ) is the variance of returns on the selected indices. Special attention was given to the variables “market capitalization” and “turnover” which are a gross value, and therefore represented in rather high monetary terms. Thus, to standardize it according to the other variables and make the analysis more meaningful its logarithm was calculated. 13 �Jasmina Okičić, Sonja Remetić-Horvath, Baris Büyükdemir Empirical Results and Discussion Empirical results xv will be present in the following order. First, we will give short overview of descriptive statistics and correlation analysis. After that, estimation of the beta coefficient will be presented and at the end results of estimated discriminant function will be discussed. Descriptive Statistics and Correlation Analysis By using scientific method, and in order to create a better insight into a specificity of observed financial time series, we will analyse some basic parameters of descriptive statistics for the observed period of time. Based on the Jarque-Bera test we reject the null hypothesis (H0: the data are from a normal distribution) at the 5% significance level for the following variables: BIGFRK3, BSNFRK2, FDSSR, TCMKR, ERS10 and SASX30. Only BSNFRK2, JHKP-R-A, ZPTP-R-A and TLKM-R-A had positive average return (Table 3). The same conclusion is for ERS10 and FIRS (Table 4). Based on the analysis of results given in Table 3, it can be concluded that BHTSR, BSNFRK2, ELGJR, FDSSR, JHKP-R-A, JPESR, MIGFRK2, NOVB-R-E and ZPTP-R-A had positive skewness. In the case of selected indices, positive skewness has been detected with BATX, BIRS, ERS10, FIRS, SASX10 and SASX30. Skewness and excess kurtosis, based on historical simulation, are given in Figure 1. 14 Journal of Economic and Social Studies �Stock Selection Based on Discriminant Analysis: Case of Capital Market of Bosnia and Herzegovina Figure 1. Skewness and kurtosis excess 15 Historical Simulation (Performance): Skewness Historical Simulation (Performance): Kurtosis Excess 10 5 0 SASX30 SASX10 JPESR ERS10 BIRS BIFX BATX ZPTP-R-A TLKM-R-A TCMKR NOVB-R-E MIGFRK2 JHKP-R-A IBZRK2 FDSSR ELGJR BSNLR BSNFRK2 BIGFRK3 BHTSR Cash -5 Why is this so important to analyze? Well, the skewness of a symmetric distribution, such as the normal distribution, is zero. Positive skewness means that the distribution has a long right tail and negative skewness implies that the distribution has a long left tail. In other words, negative skewness means there is a substantial probability of a big negative return. Positive skewness means that there is a greater-than-normal probability of a big positive return. Furthermore, kurtosis points out leptokurtosis for all selected variables, except for IKBZRK2, NOVB-R-E and ZPTP-R-A. 15 �Jasmina Okičić, Sonja Remetić-Horvath, Baris Büyükdemir 16 Journal of Economic and Social Studies �Stock Selection Based on Discriminant Analysis: Case of Capital Market of Bosnia and Herzegovina Table 4. Descriptive statistics - indices Variables: Parameters: BATX BIFX BIRS ERS10 FIRS SASX10 SASX30 Mean -0.004267 -0.003875 -0.005721 0.000244 0.000330 -0.009035 -0.004603 Median -0.002465 -0.000760 -0.007594 -0.007388 -0.011953 -0.004061 -0.009721 Maximum 0.097816 0.079885 0.095962 0.280094 0.175007 0.146682 0.096895 Minimum -0.086516 -0.148956 -0.080724 -0.125555 -0.106946 -0.120636 -0.047559 Std. Dev. 0.042950 0.042600 0.038246 0.073986 0.062848 0.048972 0.028226 Skewness 0.162552 -0.856056 0.364747 1.782538 1.062165 0.445566 1.521780 Kurtosis 3.201353 5.147046 3.094798 7.671008 4.146038 4.796183 6.242264 Jarque-Bera 0.219352 11.31171 0.811722 51.79214 8.739272 6.030584 29.66329 Probability 0.896124 0.003497 0.666403 0.000000 0.012656 0.049032 0.000000 17 �Jasmina Okičić, Sonja Remetić-Horvath, Baris Büyükdemir 18 Journal of Economic and Social Studies �Stock Selection Based on Discriminant Analysis: Case of Capital Market of Bosnia and Herzegovina 19 �Jasmina Okičić, Sonja Remetić-Horvath, Baris Büyükdemir Correlation matrix was presented in Table 5. Correlation between two variables indicates the level to which those variables move together. The sample correlation coefficient r is an estimate of the population correlation coefficient ρ. We also tested statistical significance of correlation coefficients where the following hypotheses were being tested (Doane, Seward, 2009, p. 501): H0: ρ = 0 , H1: ρ ≠ 0 . Shaded values in Table 5 show that the correlation coefficient is significant at the 0.01 or 0.05 level. After examining basic parameters of descriptive statistics and correlation analysis, in the next part of the paper, we give results of the beta coefficients estimation. The Beta Coefficients Estimation In the case of prime linear regression, it is significantly important to test the hypothesis if the slope coefficient (β) equals zero. This is an important question because if β = 0, than independent variable does not influence dependent variable. In that case, the following hypotheses are tested (Doane, Seward, 2009, p. 520) H0: β = 0 , H1: β ≠ 0 . Results of the beta coefficient estimation for selected dependent and independent variables are presented in the following table. 20 Journal of Economic and Social Studies �Stock Selection Based on Discriminant Analysis: Case of Capital Market of Bosnia and Herzegovina 21 �Jasmina Okičić, Sonja Remetić-Horvath, Baris Büyükdemir Shaded values in the previous table show that, with 5% risk, can be concluded that variable x (selected indices) influences variable y (selected issuers), and that the estimation of parameter β is statistically important, i.e. in this case we reject null hypothesis. xvi Discriminant Function Analysis The first objective of discriminant analysis is to identify a set of variables that “best” discriminates between the two groups. In our case, we had two groups, i.e. the most liquid (group 1) and the least liquid (group 2) stocks from the capital market of Bosnia and Herzegovina. As we explained earlier, the independent variables of the model were comprised of the following variables: beta coefficient, market capitalization, turnover and return. Since we have, depending on index selected, seven beta coefficients for every issuer, general form of the discriminant function can be noted as follows: D = a + b1 x1 + b2 x2 + b3 x3 + b4 x4 + b5 x5 + b6 x6 + b7 x7 + b8 x8 + b9 x9 + b10 x10 , (4) where x1, x2, x3, x4, x5, x6 and x7 represent estimated beta coefficient in accordance with indices BATX, BIFX, BIRS, ERS10, FIRS, SASX10 and SASX30, respectively; x8 represents (logarithmic) market capitalization, x9 is used as representation of (logarithmic) turnover and x10 as a representative of return. We used stepwise method that basically removes independent variables that are not significant. A variable with very low tolerance contributes little information to a model and therefore may be removed from it. In our case, out of initial ten independent variables, we are left with only five of them: x1 – BATXBETA, x4 – ERS10BETA, x6 – SASX10BETA, x8 – LOGMCAP and x10 – RETURN. Summary of the most relevant results is presented in the following tables. Table 7. Eigenvalue Function (1) Eigenvalue 210.391 % of Variance 100.0 Cumulative % 100.0 Canonical Correlation 0.998 The larger the eigenvalue, the more of the variance in the dependent variable is explained by that function. Also, the canonical correlation is the measure of association between the discriminant function and the dependent variable. The square of canonical correlation coefficient is the percentage of variance explained in 22 Journal of Economic and Social Studies �Stock Selection Based on Discriminant Analysis: Case of Capital Market of Bosnia and Herzegovina the dependent variable. In our case, that means that 99.60% (0.998 x 0.998) of variance in the dependent variable is explained by the model. Furthermore, results of the Wilk’s Lambda test are presented in Table 8. Table 8. Wilks' Lambda Test of Function(s) (1) Wilks' Lambda 0.005 Chi-square 24.092 df 5 Sig. 0.000 Wilks's lambda, is an inverse measure of the importance of the functions. Values close to 1 indicate that almost all of the variability in the discriminator variables is due to within-group differences (differences between cases in each group); values close to 0 indicate that almost all of the variability in the discriminator variables is due to group differences (Brown and Wicker, 2000, p. 223). Basically, Wilks' lambda is a measure of how well each function separates cases into groups. Smaller values of Wilks' lambda indicate greater discriminatory ability of the function. The interpretation of the discriminant coefficients (or weights) is like that in multiple regression. Table 9 provides an index of the importance of each predictor like the standardized regression coefficients did in multiple regression. The sign indicates the direction of the relationship. Table 9. Standardized canonical discriminant function coefficients Function (1) x1 8.078 x4 -6.110 x6 -3.274 x8 7.045 x10 -4.643 Summa summarum, our estimated model can be written as follows: D = 8.078 BATXBETA − 6.110 ERS10 BETA − 3.274 SASX 10 BETA + 7.045 LOGMCAP − 4.643RETURN Basically, the standardized discriminant function coefficients indicate the relative importance of the independent variables in predicting the dependent. In our case, BATXBETA score (variable x1) was the strongest predictor while LOGMCAP score (variable x8) was next in importance as a predictor. These two variables with large coefficients stand out as those that strongly predict allocation to the most liquid or the least liquid group. In general, if we rank these other coefficients by their absolute values, next to LOGMACP, as the best predictor comes ERS10BETA (variable x4), 23 �Jasmina Okičić, Sonja Remetić-Horvath, Baris Büyükdemir RETURN (variable x10) and finally SASX10BETA (variable x6). Let us now examine the practical implications of these results. BATXBETA, or the beta coefficient as a measure of sensitivity of a stock price to movement in BATX, is very important tool when making an investment decision on capital market in Bosnia and Herzegovina. Why? Well, since the BATX is made up of the most liquid stocks traded on SASE and BLSE, every investor should first examine the sensitivity of the selected stock to the mentioned index. Beta coefficient has proved itself as a very useful instrument which investors can use in the process of defining an investment decision on the capital market. For example, if we look at Table 6, we see that the estimation of parameter BATXBETA was statistically important in case of the following issuers: BHTRS, BSNLR, FDSSR, NOVB-R-E and TLKM-R-A. Furthermore, when knowing the beta coefficient, an investor may classify any selected stock in one of the three possible groups, i.e.: (1) an average stock (β = 1); (2) an aggressive stock β > 1, and (3) a defensive stock (β < 1). An average stock, according to the definition, will have beta 1 value, which means that its return will proportionally follow return on the selected stock exchange index. A beta coefficient higher than 1 implies that returns for the stock move more than the market. These stocks are known as aggressive. On the other hand a beta of less than 1 means that the stock will be less volatile than the market. These stocks are known as defensive. According to the results presented in Table 6 all of the selected stocks may be classified as defensive. As second best predictor in our analysis, LOGMCAP, or the number of stocks multiplied by their current price on the stock market, is in general, very important tool in investment decision making. Since market capitalization may be used as a measure of liquidity (Von Wyss, 2008) this indicator is especially important when investing in underdeveloped capital markets. Furthermore, the modern portfolio theory predicts that if the general assumptions of the capital asset pricing model (CAPM) hold, and the markets are efficient, systematic risk is the only priced in factor. However, there is a stream of literature that spills doubt over CAPM and provide evidence that the systematic risk factor is not the only priced factor, adding firm-specific parameters such as company size (which can be seen as a proxy for marketability, large bid-ask spreads, nontransparent information, etc.) and earnings yield affect returns to the discussions. Measuring the size of a company by its market capitalization value, studies utilizing 24 Journal of Economic and Social Studies �Stock Selection Based on Discriminant Analysis: Case of Capital Market of Bosnia and Herzegovina data from different stock exchanges, often find that smaller companies carry a so called “small-firm” premium and earn higher returns than their larger counterparts in a buy and hold strategy. Since 1926, the nominal returns on large cap stocks have averaged about 10% per annum, whereas small-cap stocks brought about 12% and corporate bonds about 6% gross of inflation rate and taxation (Keating, 2013). Developed markets have acknowledged this, and decision makers have placed large incentives in form of commissions and trading spreads to support small-caps with equity analysis, market makers and the like. As concerns for investor protection rise in the recent years the rule making has reversed a bit. When allocating funds to peripheral and emerging markets, investors particularly look into parameters such as market capitalization and liquidity, as well as market depth (the sensitivity of bid-ask spreads on the local stock exchange to the placement of trading volumes within a certain period of time). This liquidity risk is defined as the risk of a security not being able to trade quickly enough in the market such to prevent losses. In the modern times of high frequency trading, sophisticated systems and cash abundant investors in search of yields, liquidity provides investors with an option to exit, and induces them to take risk, growing capital formation, which in turn funds innovation and leads to constantly improving standard of living. If liquidity is eliminated or reduced, this process is reversed meaning that smaller markets will be more and more excluded in investment decisions based on these parameters and seen as unattractive for any sort of capitalization, which in turn diminishes future economic growth. The impact of liquidity can be reduced, if firms have a firm financial management in place and diversify across several liquidity providers in the region. Investing in small-cap companies is one of the most widely used passive growth strategy where discipline and diversification gains on importance. A conviction bet in a less liquid market can bring higher returns; as such markets are more volatile, rewarding their participants for the risks being taken. Understanding this relationship between company size, return potential and risk is crucial before adding any equity position to the investor portfolio. Conclusion In this paper we investigated the possibilities of stock selection and analysis on the underdeveloped capital market of Bosnia and Herzegovina. Due to its many specificities (such as low market capitalization, poor liquidity and turnover, weak 25 �Jasmina Okičić, Sonja Remetić-Horvath, Baris Büyükdemir legal protection for minority shareholders, low correlation with developed and emerging capital markets, etc.), any kind of scientific research on this market can help investors in shaping their investment strategies. Therefore, the main goal of this paper was to scientifically examine and propose new approach of stock selection and analysis based on multivariate technique, i.e. discriminant analysis, in order to help investors, individual and institutional, in their decision making process, especially in case of underdeveloped capital markets. The main limitations of this study are to be found in the shorter available financial time series in newly formed capitalistic economy, missing data due to the lack of collective records on levels of securities offerings issues. However, the main advantage of this research is that we concluded that discriminant analysis is a useful quantitative tool that can help investors in shaping their investment strategies in case of capital market of Bosnia and Herzegovina. We also found that the beta coefficient, market capitalization and realized historical return have discriminatory capabilities in case of the capital market of Bosnia and Herzegovina. The real implications of this research can be seen in the shaping of investment strategies of potential investors looking to diversify their portfolios as well as financial managers of smaller listed companies looking for ways to make their financial structure more attractive to investors. To summarize, previously formulated scientific hypotheses can be confirmed and further research suggests a need for more in depth analysis of effects investment strategies based on the new approach of stock selection and analysis proposed in this paper. References Achour, D., Harvey, C.R., Hopkins, G., Lang, C. (1998). Stock Selection in Emerging Markets: Portfolio Strategies for Malaysia, Mexico and South Africa. Emerging Markets Quarterly, 2 (Winter), 38 – 91. Annual Report 12 (2012). Banja Luka Stock Exchange, Retrieved 19 April 2013, from http://www.blberza.com/Pages/DocView.aspx?Id=25691 Annual Statistical Report (2012). 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The Banja Luka Stock Exchange, Retrieved 20 April 2013, from http://www.blberza.com/Cms2FileCache/files/cms2/docver /19710/files/Methodology_BIRS_20_05_11.pdf Methodology for Establishing, Calculating and Revision of The Index Of Companies Of Power Utility Of The Republic Of Srpska, The Banja Luka Stock Exchange, Retrieved 20 April 2013, from http://www.blberza.com /Cms2FileCache/files/cms2/docver/19711/files/METODOLOGIJA%20ERS10%2 0engl.pdf SArajevo Stock EXchange Index 10 - SASX-10, The Sarajevo Stock Exchange, Retrieved 18 April 2013, from http://195.222.43.81/sase-final/language/enUS/Home.aspx SArajevo Stock EXchange Index 10 – SASX-10, The Sarajevo Stock Exchange, Retrieved 19 April 2013, from http://195.222.43.81/sase-final/language/enUS/Home.aspx Schadler, F.P. & Eakins, S. G. (2001). A stock selection model using Morningstar’s style box. Financial Services Review, 10, 129 – 144. Şenol, E., Dinçer, H., & Timor, M. (2012). Artificial Neural Networks and Stock Selection Model Based on Fundamental and Technical Analysis Variables by Using Support Vector Machines. Review of Economics & Finance, 2 (3), 106 – 122. Sharma, S. (1996). Applied multivariate techniques. New York: John Wiley & Sons, Inc. 28 Journal of Economic and Social Studies �Stock Selection Based on Discriminant Analysis: Case of Capital Market of Bosnia and Herzegovina Shiuh-Nan, H., Chin-Tsai, L., and Wang-Ching, C. (2007), Formulating a Novel Stock Selection Model Using DEA and Grey Situation Decision Model. Journal of Statistics and Management Science, 10 (1), 103 – 127. Siqueira, E., Otuki, T. & Da Costa, N. (2012). Stock Return and Fundamental Variables: A Discriminant Analysis Approach. Applied Mathematical Sciences, 6 (115), 5719 – 5733. Siegel, J. J. (1992). The Equity Premium: Stock and Bond Returns since 1802. Financial Analysts Journal, 48 (1), 28-38. Sorensen, E. H., Miller, K.L. & Ooi, C.K. (2000). The Decision Tree Approach to Stock Selection. The Journal of Portfolio Management, 27 (1), 42 – 52. The Bosnian Traded Index (BATX), The Wiener Börse AG, Retrieved 30 December 2012, from http://en.indices.cc/indices/cee/profiles/batx.html Van der Hart, J., Slagter, E. & Van Dijk, D., (2002). Stock Selection Strategies in Emerging Markets. Medium Econometrische Toepassingen, 10 (3), 9 – 13. Von Wyss, R., (2004). Measuring and Predicting Liquidity in the Stock Market. (Doctoral disertation, St. Gallen University). Retrieved 25 September 2013, from http://www1.unisg.ch/www/edis.nsf/SysLkpByIdentifier/2899/$FILE/dis2899.pdf Stock market information, including dividend information, is often not complete and is not always disclosed in English. There is no central source for this type of information. ii According to additional information, it has been learned that there are several active custodians available for foreign investors. iii Bosnian Investment Fund Index – BIFX, The Sarajevo Stock Exchange, Retrieved 18 April 2013, from http://195.222.43.81/sase-final/language/en-US/Market/Index/Index_BIFX.aspx iv SArajevo Stock EXchange Index 10 – SASX-10, The Sarajevo Stock Exchange, Retrieved 18 April 2013, from http://195.222.43.81/sase-final/language/en-US/Home.aspx v SArajevo Stock EXchange Index 10 – SASX-10, The Sarajevo Stock Exchange, Retrieved 19 April 2013, from http://195.222.43.81/sase-final/language/en-US/Home.aspx vi Methodology for Establishing, Calculating and Revision of Investment Funds Index of Republic of Srpska, The Banja Luka Stock Exchange, Retrieved 20, April 2013, from http://www.blberza.com/Cms2FileCache/files/cms2/docver/19709/files/FIRS%20methodolo gy.pdf i 29 �Jasmina Okičić, Sonja Remetić-Horvath, Baris Büyükdemir Methodology for Establishing, Calculating and Revision of Stock Exchange Index of Republic of Srpska, The Banja Luka Stock Exchange, Retrieved 20 April 2013, from http://www.blberza.com/Cms2FileCache/files/cms2/docver/19710/files/Methodology_BIRS _20_05_11.pdf viii Methodology for Establishing, Calculating and Revision of The Index Of Companies Of Power Utility Of The Republic Of Srpska, The Banja Luka Stock Exchange, Retrieved 20 April 2013, from http://www.blberza.com/Cms2FileCache/files/cms2/docver/19711/files /METODOLOGIJA%20ERS10%20engl.pdf ix For more information see: The Bosnian Traded Index (BATX), The Wiener Börse AG, Retrieved 30 December 2012, from http://en.indices.cc/indices/cee/profiles/batx.html x Real historical values for BATX are available at: BOSNIAN TX BAM (BXL.VI), Yahoo! Finance, Retrieved 14 December 2012, from http://finance.yahoo.com/q/hp?s=BXL.VI +Historical+Prices xi Bosnian Traded Index (BATX), The Wiener Börse AG, Retrieved 20 April 2013, from http://en.indices.cc/static/cms/sites/indices/media/en/pdf/download/profiles/en_BATX.pdf xii For more information on composition of BATX see: Bosnian Traded Index in BAM BATX BAM, The Wiener Börse AG, Retrieved 7 July 2012, from http://en.indices.cc/indices/details/bxl/composition/ xiii Dobrinja d.d. Ilidža was not used because at the time this research was done, quotes weren’t available on the official web site of the SASE. xiv For this, in this paper the stock closing prices for the first and last trading day of each month were collected. xv All results in this research were generated by: SPSS® Student Version 11.0 for Windows®, ©SPSS Inc. 2002, Quantitative Micro Software EViews 7.1 Enterprise Edition 2010 and STATISTICA 7.0 Copyright© StataSoft, Inc. 1984-2004. xvi Null hypothesis is confirmed in this case, if p – values are higher than selected significance level. vii 30 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. 2404 Title A name given to the resource Stock Selection Based on Discriminant Analysis: Case of Capital Market of Bosnia and Herzegovina Author Author OKIČIĆ, Jasmina REMETIC HORVATH, Sonja BUYUKDEMIR, Baris Abstract A summary of the resource. The main goal of this paper is to scientifically examine and propose new approach of stock selection and analysis based on multivariate technique, i.e. discriminant analysis, in order to help investors, individual and institutional, in their decision making process, especially in case of underdeveloped capital markets. Therefore, in this paper we investigate the cross—sectional relation between the independent variables of the model, comprised of beta coefficient and some fundamental variables as well as the average stock returns on the underdeveloped capital market of Bosnia and Herzegovina. We concluded that discriminant analysis is a useful quantitative tool that can help investors in shaping their investment strategies. We also found that the beta coefficient, market capitalization and realized historical return have discriminatory capabilities in case of the capital market of Bosnia and Herzegovina. The real implications of this research can be seen in the shaping of investment strategies of potential investors looking to diversify their portfolios. The main limitations of this study are to be found in the shorter available financial time series in newly formed capitalistic economy, missing data due to the lack of collective records on levels of securities offerings issues. 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 2014-07-15 Keywords Keywords. Article PeerReviewed HB Economic Theory https://omeka.ibu.edu.ba/files/original/035999ebee7049e9f1285a7ed8fe75ec.pdf f71183dd01c2062eccb9ced249b8047b PDF Text Text Journal of Economic and Social Studies Hasan GÖCEN / Hüseyin KALYONCU / Muhittin KAPLAN Seater, J. (1993), Ricardian Equivalence, Journal of conomic iterature, 31, 142-90. Seater, J.&Mariano,R. S. (1985), New tests of the life cycleandtaxdiscountinghypotheses, Journal of Monetary conomics, 15, 195-215. Stock, J. H. & Watson,M. W. (1993),A simple estimator of cointegrating vectors in higher order integrated systems, conometrica, 6, 783-820. Store Personality: Perceptions Towards Consumer Electronics Chain Stores in Turkey A Case of University Students Keti VENTURA Ege University, Faculty of Economics and Administrative Sciences, Business Administration keti.ventura@ege.edu.tr Ipek KAZANCOGLU Ege University, Faculty of Economics and Administrative Sciences, Business Administration ipek.kazanoglu@ege.edu.tr Elif USTUNDAGLI Ege University, Faculty of Economics and Administrative Sciences, Business Administration elif.ustundagli@ege.edu.tr Rezan TATLIDIL Ege University, Faculty of Economics and Administrative Sciences, Business Administration rezan.tatlidil@ege.edu.tr Abstr ct The purpose of this study is to identify, develop and compare the deter- KEYWO D minants of store personality of the most preferred consumer electronics tore personality, onsumer chain stores, as perceived by young consumers in urkey. A question- lectronic hain tores, onfirmatory actor Analysis, naire survey including a 22-item store personality scale was conducted urkey among 855 students using a convenience sampling method. xploratory factor analysis ( A) and confirmatory factor analysis ( A) A I LE HI O Y was performed. indings suggest that greater accuracy of information is ubmitted: 31 July 2012 needed in the purchasing decision related to high involvement products esubmitted: 05 ovember 2012 such as consumer electronics. Also it was found that younger consumers esubmitted: 18 ecember 2012 prefer reliable stores that give accurate information, value for money, Accepted: 21 ecember 2012 and provides price-quality fit. This study addresses the neglected area of store personality development and validation for consumer electronics relates through an understanding of young consumers perceptions towards store personality determinants. JEL odes: M31, M39 14 Journal of Economic and Social Studies Volume 3 Number 2 Fall 2013 15 �Keti VENTURA / Ipek KAZANCOGLU / Elif USTUNDAGLI / Rezan TATLIDIL Introduction In recent years, the growing importance of technology in our daily life has increased enthusiasm for consumer electronics consumption. In particular, young consumers, who are leading the adoption of new technologies, have become more ambitious in their purchases (Accenture, 2012, p. 6). In Turkey, consumer electronics is one of the fastest growing markets, with sales of 3,648 million TL in 2011 (GfK, 2011), with several new entrants establishing themselves the market. However, many of the products and brands sold in consumer electronics retail stores are perceived as being very similar (Yozgat and Deniz, 2008, p. 121). Pursuing sustainable competitive advantage in the current market environment necessitates some degree of differentiation in the products offered by consumer electronics retailers. Therefore, as individual customers tend to attribute humanized characteristics to brands or products, building a particular store personality with appropriate characteristics (Blankson and Crawford, 2012, pp. 311315) can be an effective way to differentiate a particular store from competitors, and position itself through these characteristics, which include product availability, service quality, value for money, and store atmosphere. The concept of “brand as a person”, or in other words “brand personality”, as the set of human characteristics associated with a brand (Aaker, 1997, p. 347) is an important concern for consumers, and in turn, for marketers and academicians (Grohmann, 2003, p. 224; Aaker and Fournier, 1995, p. 392; Wang and Yang, 2008, p. 460; Ambroise, et al., 2005, p. 32). Customers interaction with brands is often similar to their interaction with other people, especially when the brands are attached to such meaningful objects as clothes or cars (Aaker, 1996, p. 142). As individuals tend to associate the brand with their life situations and roles (Ligas and Cotte, 1999, p. 611), interaction with brands as if they were people necessitates defining personality traits that affect the relationship between attributes of people and their behavior in various situations (Hurley, 1998, p. 116), such as purchasing. Furthermore, in order to be useful in a social context, a brand’s meaning should be formed based on three components: its physical make up, functional characteristics, and characterizationi.e., personality (Ligas and Cotte, 1999, p. 612). As human or brand personalities are related in the context of retail stores (Brengman and Willems, 2008, p. 27), consumers are able to identify a particular personality related to a store based on both its tangible (design, environment, etc.) and intangible (attitude of sales personnel, service quality, etc.) components. Despite approximate similarity in price, service, merchandising and marketing activities, some stores are overwhelmingly preferred to others (Martineau, 1958, p. 47). Thus, it could be concluded that there should be other factors that 16 Journal of Economic and Social Studies Store Personality: Perceptions Towards Consumer Electronics Chain Stores in Turkey A Case of University Students directly or indirectly affect consumers, and in turn, their preferences. Store personality is considered to be one factor responsible for differentiating and positioning a store, because when a store is humanized, it relates to self-meaning that has congruent personalities to oneself (Chan, et al., 2003, p. 302), this being consistent with the “self-congruity” theory (Sirgy and Samli, 1985; Sirgy, et al., 2000). As Turkish consumer electronics chain stores are all highly competitive and implement similar marketing strategies, some degree of differentiation is necessary within their positioning strategies, especially in regard to younger consumers. In this respect, the purpose of this study is to identify and compare the determinants of store personality of the most preferred consumer electronics chain stores, as perceived by young consumers in Turkey. Additionally, it aims to explore specific store personality determinants, and also to develop a scale in a consumer electronics chain store context. Accordingly, exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) were applied to the most preferred consumer electronics chain stores, in order to validate the scale. The conceptual framework for the empirical research was based on store personality in retailing services. In the first section of the study, the concept of store personality is discussed. Following this, the research design and the results of the study are presented. The study is concluded by outlining the implications and recommendations for the practitioners, the limitations of the study, and opportunities for further research. Store personality has been investigated by relatively few researchers including Martineau (1958), d’Astous and Levesque (2003), Brengman and Willems (2008). As the scales developed in these studies are too general, and based on a specific context, they cannot be appropriately applied to consumer electronics chain stores. Accordingly, the studies of these authors are utilized to develop a new scale to increase understanding of the perceptions of university students’ towards consumer electronics chain stores. The findings of the present study have the potential to contribute to store personality literature by developing and validating a store personality scale for the use of consumer electronics retailers to position themselves in young consumer markets. Literature Review The concept of store personality was introduced by Martineau (1958, p. 47), who defined it as “the way in which the store is defined in the shopper’s mind, partly Volume 3 Number 2 Fall 2013 17 �Keti VENTURA / Ipek KAZANCOGLU / Elif USTUNDAGLI / Rezan TATLIDIL Store Personality: Perceptions Towards Consumer Electronics Chain Stores in Turkey A Case of University Students by its functional qualities and partly by an aura of psychological attributes”. Store personality is commonly related to store image, but there are important differences in meaning. Although store image is associated with all the dimensions related to the store, store personality is restricted to those dimensions that correspond to human traits (d’Astous and Levesque, 2003, pp. 455-456). As the concept of human and brand personality are both directly transferable within the context of retail stores (Brengman and Willems, 2008, p. 27; Khan, 2010, pp. 9-10) these traits are relevant to the concept of “brand personality”. (annoyance, irritation, loudness and superficiality). These dimensions were those which had been most commonly accepted and used in previous studies (Brengman and Willems, 2009). In Brengman and Willems’ (2008) study, in which a fashion store was evaluated in the terms of store personality, 5 major classifications were proposed. These were “store atmosphere” related with design, ambience and social factors; “merchandise” related with price, quality, style and assortment; “retailer’s reputation” related with “word-of-mouth”, advertising, communication and social responsibility; “service” related with direct interactivity along with “format and location”. Aaker (1997) proposed the commonly accepted brand personality dimensions (sincerity, excitement, competence, sophistication, and ruggedness), and defined the concept, mainly by focusing on its positive attributes. The brand personality concept can help brand strategists enrich their understanding of people’s perceptions and attitudes toward the brand. It contributes to a differentiated brand identity, guiding the communication effort and creating brand equity (Aaker, 1996, p. 150). Customers often interact with brands in the same way they interact with other people (Aaker, 1996, p. 142). When consumers view it as having human characteristics, the brand is said to have a personality. Examples of brands found to have strong personalities include Harley Davidson (ruggedness) and Nike (excitement). Madrigal and Boush (2008) stated that trait inferences can also be made about store personality from the combination of marketing mix elements in which the retailers engage. For the stores themselves, other attributes, such as ambience, design and social components are also of concern (d’Astous and Levesque, 2003, p. 457) as these could directly affect the perception of store personality. Other aspects that affect store personality are store name, store environment, service quality, store personnel, merchandise quality, and carried brand names (Brengman and Willems, 2009, p. 347). In a store environment, factors as such as attachment, experience and structure are also important. These formations are evaluated through defining mechanisms, triggering memories linked to affect, which is either positive (Orth, Limon and Rose, 2010, p. 1207) or negative. Thus consumers develop a perception about a particular store that will affect shopping decisions. For this reasons, the design and structure of the store, and the qualities of the sales personnel represent important indicators of perceived store personality. Where the environment is formal, expressive, symbolic and has a professionally planned setting that interacts with the product, (Fiore and Ogle, 2000, p. 34) it influences the customer’s perception of store personality (Harrell and Hurt, 1976). As consumers repeatedly see, touch, hear and smell the commodities, as well as experience the environment, they derive value from formal, expressive and symbolic qualities, and this process influences their beliefs about the store (Fiore and Ogle, 2000, p. 34; Darden and Babin, 1994, p. 101). Subsequently, they associate the brand with their lifestyles and roles, thus there is a strong connection with their view of “self ” (Ligas and Cotte, 1999, p. 613). Thus, they use brand personality to define their sense of “self ” and tend to seek brands or stores with congruent personalities (Chan, et al., 2003, p. 304), consistent with the “selfcongruity” theory (Sirgy and Samli, 1985; Sirgy, et al., 2000). However, the way a store is perceived depends on the personality of each customer (Wesley, et al., 2006, pp. 167–168). The impressions in consumers’ minds will result in particular store preferences (Martineau, 1958:55; Brengman and Willems, 2009, p. 352). A good impression can be achieved by building a store personality and finding a suitable “location” in the minds of a group of consumers or a market segment (Keller, 2003, p. 119), a strategy known as “positioning”. A number of studies on store personality were conducted by Martineau (1958), who proposed the main influencing factors could be classified into three main areas: layout and architecture, symbols and colors, and advertising and sales personnel. However, d’Astous and Levesque (2003) stressed that the dimensions used by Martineau (1958) were related with image rather than personality, and they developed a 5 dimensional scale, consisting of “sophistication”, “enthusiasm”, “genuineness”, “solidity” and “pleasantness”, which included a total of 34 sub items. In the same study, they also prepared a reduced scale with the highest factor loadings: “enthusiasm” (welcomeness, enthusiasm, liveliness and dynamism); “sophistication” (chicness, being high class, elegance and style); “genuineness” (honesty, sincerity, reliability and honesty/truth); “solidity” (hardiness, solidity, reputation and prosperity) and “unpleasantness” Most importantly, brands’ objective personality traits do not exist independent of consumer perception (Zentes, Morschett and Schramm-Klein, 2008, p. 169). The process by which consumers use a product category and attribute information from memory has implications for selecting the appropriate positioning strategy to achieve 18 Volume 3 Journal of Economic and Social Studies Number 2 Fall 2013 19 �Keti VENTURA / Ipek KAZANCOGLU / Elif USTUNDAGLI / Rezan TATLIDIL brand association (Punja and Moon, 2002, p. 276). The brand, with its symbolic and human attributes, customizes its marketing mix according to store personality. However the personality that managers aim to implement may be different to that perceived by consumers. If there is a major gap between managers’ implementations and consumers’ perceptions of these, then it will be impossible for managers to communicate with consumers in a satisfactory manner. As store personality is directly related with “the perceptions of consumers”, it becomes important to evaluate store personality in the context of store positioning. Perceptions are mostly formed according to the factors representing the store’s “intangible assets”, which, according to Hooley, et al. (2001), are most difficult for competitors to imitate. Therefore, if a firm can succeed in positioning itself through personality characteristics, it will make an important contribution to its performance in terms of competition and long-term survival. While, the literature contains a number of studies on the determinants of brand personality, there is a need for further studies on store personality and its determinants, as these have received less attention. In this field, Martineau (1958) mostly focused on store image attributes to define store personality, d’Astous and Levesque (2003) utilized Aaker’s (1997) brand personality dimensions to develop a general store personality scale; however, this does not fit all retail stores. One example of the development of a new scale is Brengman and Willems’ (2008), which used qualitative methods to develop a scale for fashion stores based on d’Astous and Levesque (2003). In this study, we draw on this previous research (Martineau, 1958; d’Astous and Levesque, 2003; Brengman and Willems’, 2008) to understand the perceptions of young consumers towards the determinants of store personality. Using survey methodology, a new store personality scale is developed for consumer electronics chain stores. Store Personality: Perceptions Towards Consumer Electronics Chain Stores in Turkey A Case of University Students Darty, MediaMarket, BestBuy, Electroworld and Gold. These highly competitive market players need to be differentiated through their positioning strategies. A consumer electronics product is not only a tool with which the user performs a task, but also a decorative item for the home, or means to express one’s personality and lifestyle (Han, et al., 2001, p. 145). For this reason, the purchase of electronics products entails high involvement, in which consumers seek specific qualities in the products themselves. This very personalized approach makes the consumer electronics sector particularly suitable for store personality research. In this competitive environment, building store personality can be a significant factor in positioning a store. Within this context, the aim of this study is to explore and compare the determinants of store personality, as perceived by young consumers, of the most preferred consumer electronics chain stores in the Turkish market. In March 2011 a questionnaire survey was conducted among 855 students from the Faculty of Economics and Administrative Sciences, Ege University in Izmir, using a convenience sampling method. The questionnaires, which took 10-15 minutes to complete, were distributed in the classes and campus area by three research assistants, who had been informed of the content. This sample was chosen due to the fact that young consumers are more familiar with consumer electronics and often influence family purchasing decisions (Hafstrom, et al., 1992). In addition, the enthusiasm of young people for consumer electronics makes them a potentially highly profitable segment of the market (Accenture, 2012, p. 15). According to the GfK Retail and Technology 2011 Report, consumer electronics is one of the fastest growing sub-sectors in Turkey, with sales of 3,648 million TL. The consumer electronics sub-sector includes of color televisions, audio appliances, video players, cash registers, audio-video cassettes, television satellite receivers and antennas, electronic scales and electronic calculators. There are various domestic and foreign actors in the Turkish market, notably Teknosa, Vatan Computer, Bimeks, The questionnaire consisted of three sections. The respondents were asked to state their preferred consumer electronics store in the first section. The second section gave 22 statements relating to the determinants of store personality for the consumer electronics context. These statements, generated by the author, were based on the following: Martineau’s (1958) store personality determinants (architecture, colour schemes, advertising, salespeople and others), d’Astous and Levesque’s (2003) determinants for store personality dimensions; and Brengman and Willems, (2008, 2009)’s five major fashion store personality determinants (store atmosphere, merchandise, reputation, service and format). Brengman and Willems, (2009) determined four categories containing different items as follows : (i) “store atmosphere”: interior design, music, layout, window display (Berman and Evans, 2010, pp. 508-509); (ii) “merchandise”: price, quality, product range (Berry, 1969); (iii) “service”: sales people’s attitudes (O’Cass, A. and Grace, D., 2008); (iv) “format”: premium branded products, highincome level target (Brengman and Willems, 2009). A 5-point ‘Likert’ scale ranging from “strongly disagree (1)” to “strongly agree (5)” was utilized. Finally, in the last section, there were some demographic questions related to the respondent’s gender, 20 Volume 3 Field Study Journal of Economic and Social Studies Number 2 Fall 2013 21 �Keti VENTURA / Ipek KAZANCOGLU / Elif USTUNDAGLI / Rezan TATLIDIL age, income level. The questionnaire was originally prepared in Turkish, and the statements were translated into English for the tables. The findings of the study are presented in two parts. In the first part, EFA was conducted to the determinants (Martineau, 1958; d’Astous and Levesque, 2003; Brengman and Willems, 2008) of store personality in order to identify specific factors of store personality and obtain important insights about the data structure. In the second part of the study, ANOVA is performed to compare the perceptions of respondents to the specific determinants of store personality. Following this, first and second-order CFA was performed for each most preferred store in order to test the validity of scale, that is to assess its fit to the proposed theoretical basis. Findings The sample comprised 53.1 % female and 46.9 % male students. TeknoSa (52.4 %), MediaMarkt (27.9 %) and Vatan Computer (21.1 %) were chosen as the most preferred consumer electronics chain stores, comprising 87.9 % of the sample. The profile of the sample appears in Table 1. Table 1. Profile of the sample Variables Sex Female Male Missing Total N Valid Percent 379 335 38 53.1 46.9 -- 752 100 Variables Monthly Income 650-1379 TL 1380-2109 TL 2210-2839 TL 2840-3569 TL 3570-4299 TL 4300-5029 TL 5030-5759 TL 5760-6489 TL 6490 TL + Missing Total N Valid Percent 236 174 113 49 44 18 12 9 28 69 752 34.6 25.5 16.5 7.2 6.4 2.6 1.8 1.3 4.1 100 Mostly Preferred Electronic Store Age TeknoSA Mediamarkt Vatan Total 18-24 25-31 607 145 80.7 19.3 Total 752 100 22 384 210 158 752 51.0 27.9 21.1 100 Journal of Economic and Social Studies Store Personality: Perceptions Towards Consumer Electronics Chain Stores in Turkey A Case of University Students In order to establish the evaluations related to the statements determining store personality, one sample t-test was conducted. As shown Table 2, the findings of one sample t-test about the respondents’ perceptions of store personality determinants revealed that young respondents (a) can easily find the products they are looking for in these stores (t=31.622 df:739 p=0.000), (b) visit these stores for its premium branded products (t=23.362 df:736 p=0.000), (c) get accurate information (t=28.401 df:747 p=0.000) and (d) receive value for their money (t=20.535 df:743 p=0.000). Table 2. One Sample T-Test of the Respondents’ Evaluations Statements Mean I visit this store for the premium branded products. 3.88 I think stores like this sell high-priced products. 3.09 I appreciate the interior design of this store. 3.60 I think this store serves high-income customers. 2.81 I appreciate the window display of this store. 3.32 The music played in this store enables me to take pleasure from 3.31 shopping I appreciate the young and dynamic sales staff of this store 3.15 I find more suitable consumer electronics products for young 3.54 people in this store compared to other stores Only the latest technology products are sold in this store 3.65 The low turnover of salespeople in this store gives me confidence. 3.21 The salespeople in this store are very knowledgeable. 3.56 I can easily find what I am looking for in this store. 3.96 This store determines a price which is appropriate for the quality 3.71 of the product. Information given related to the products is correct in this store. 3.86 I think the advertisements of this store give accurate information. 3.66 I think this store always gives me value for money. 3.70 I do not think that this store makes false claims to increase sales.* 2.36 I do not like the aggressive attitude of the salespeople towards 3.52 customers.* Whenever I want to buy a product from this store, they tell me 3.69 that the product is out of stock * The confusing layout of this store makes it difficult to find what I 3.74 am looking for.* This store’s interior colour irritates me. * 3.77 The constant crowding in this store irritates me. * 3.35 Std. dev. 0.991 1.129 0.982 1.124 1.029 t df Sig. 25.822 2.389 17.865 -4.976 8.852 854 854 854 854 854 0.000 0.017 0.000 0.000 0.000 1.072 4.007 854 0.000 1.029 15.279 854 0.000 0.945 19.963 854 0.000 1.080 1.069 0.961 0.820 5.674 5.628 16.980 34.351 854 854 854 854 0.000 0.000 0.000 0.000 0.899 22.905 854 0.000 0.815 30.762 0.900 21.403 0.895 23.006 0.982 -18.943 854 854 854 841 0.000 0.000 0.000 0.000 1.130 13.310 836 0.000 1.030 19.489 842 0.000 1.009 21.286 838 0.000 0.996 1.108 22.269 835 9.307 846 0.000 0.000 Test value is 3 (neither agrees nor disagrees) *recoded Volume 3 Number 2 Fall 2013 23 �Keti VENTURA / Ipek KAZANCOGLU / Elif USTUNDAGLI / Rezan TATLIDIL An exploratory factor analyses was perfomed on the total sample in order to identify the specific determinants of the store personality with Varimax rotation. The KaiserMeyer-Olkin (KMO) test and Bartlett’s test of sphericity were computed to assess the appropriateness of factor analyses to the data. The Kaiser-Meyer-Olkin Measure (KMO) of Sampling Adequacy (0.834) also showed that sample adequacy was satisfactory and the Bartlett’s test of sphericity was significant (p<0.000). The factor analysis of the 22 item scale yielded a ‘three principal components’ solution. Each of these three factors had an eigen value greater than one. The statements with factor loadings lower than 0.50 were removed from the study. During the factor analysis, eight variables that were unrelated to any factor were excluded, and a total of three factors were extracted from the remaining 13 items. The analysis produced three store personality factors, and explained 56.3% of the variance. Also, Cronbach’s alpha coefficients were calculated in order to check the internal consistency and reliability of each factor. Factor loadings ranged from 0.63 to 0.81 and alpha coefficients ranged from 0.67 to 0.80, indicating a high internal consistency and reliability for the factors. The factors were declared as “Pleasantness”, “Reliability” and “Welcomeness” in accordance with their respective factor loadings (Table 3). Store Personality: Perceptions Towards Consumer Electronics Chain Stores in Turkey A Case of University Students Table 3. Results of Exploratory Factor Analysis Recoded Factor Common Factors Factor Loading Statements The confusing layout of this store makes it difficult to find what I am looking for.* This store’s interior colour irritates me. * Pleasantness Whenever I want to buy a product from this store, they tell me that the product is out of stock.* The constant crowding in this store irritates me.* I do not like the aggressive attitude of the salespeople towards customers.* Information given related to the products is accurate in this store. I think this store always gives me value for money. I think the advertisements of this store give accuReliability rate information. The salespeople in this store are very knowledgeable. This store determines a price which is appropriate for the quality of the product. I appreciate the interior design of this store. I appreciate the window display of this store. Welcomeness The music played in this store enables me to take pleasure from shopping. KMO Bartlett Test Interpretation (Cumulative % of variance explained) Cronbach Alpha 21.775 0.80 41.989 0.77 56.032 0.67 0.799 0.791 0.762 0.694 0.640 0.751 0.735 0.727 0.670 0.626 0.812 0.752 0.704 0.834 2940.500; (df: 78; p<0.05) In order to compare the respondents’ evaluations of “Pleasantness”, “Reliability” and “Welcomness” factors, and explore the differences between the most preferred stores, both a sample t-test and ANOVA were conducted. H1 is generated as follows: 24 Journal of Economic and Social Studies Volume 3 Number 2 Fall 2013 25 �Keti VENTURA / Ipek KAZANCOGLU / Elif USTUNDAGLI / Rezan TATLIDIL 26 Journal of Economic and Social Studies Number 2 147 3.422 2.87 209 3.909 2.280 The music played in this store enables me to take pleasure 3.12 from shopping. 3.29 393 Test value is 3 (neither agrees nor disagrees) *recoded **p<0.05 147 147 4.369 6.314 3.54 3.14 209 209 7.619 5.150 393 13.560 393 7.489 3.63 3.35 I appreciate the interior design of this store. I appreciate the window display of this store. 3.54 3.37 10.594 147 3.86 11.947 209 3.77 147 7.233 3.63 11.022 209 3.68 393 9.607 3.45 The salespeople in this store are very knowledgeable. 12.811 393 Welcomeness Reliability Fall 2013 This store determines a price which is appropriate for the 3.56 quality of the product. 147 7.941 3.62 209 9.364 16.056 393 3.65 11.135 147 3.84 12.442 209 3.80 12.901 393 3.56 I think this store always gives me value for money. I think the advertisements of this store give accurate infor3.67 mation. 12.473 147 3.93 3.81 22.667 393 13.311 209 144 5.600 3.56 204 8.107 3.62 987 7.368 145 5.283 3.49 206 3.038 3.25 The constant crowding in this store irritates me.* 3.30 5.590 390 14.161 388 Pleasantness I do not like the aggressive attitude of the salespeople to3.41 wards customers.* Information given related to the products is accurate in this 3.83 store. 144 8.004 3.69 205 7.932 3.61 145 9.972 3.77 10.548 200 3.74 14.750 385 3.74 This store’s interior color irritates me. * Whenever I want to buy a product from this store, they tell 3.69 me that the product is out of stock.* Vatan 3.78 206 9.873 3.71 13.812 386 The confusing layout of this store makes it difficult to find 3.70 what I am looking for.* t** Mean df t** Mean Statements Teknosa Volume 3 Common Factors Table 4. Comparison of One Sample T-Test of Three Stores Findings of the sample t-tests (Table 4) revealed that the majority of the mean values for each item were very close among the three stores. Considering the findings, it can be proposed that, although these three are the most preferred ones, they were able to differentiate themselves to a limited extent in relation to store personality determinants. It can be said that, although young people perceive these stores as being similar in all services, Vatan Computer and Teknosa were considered to give better value for money (F=7.847 df: 2/749 p=0.000) compared with MediaMarkt. Vatan Computer sets more reasonable prices according to the quality of their products (F=7.335 df: 2/749 p=0.001) than the other two. Sales personnel in MediaMarkt are perceived to have more knowledge (F=4.662 df: 2/749 p=0.010) than those in Teknosa. Also, the respondents who preferred MediaMarkt and Teknosa reported that the music in these stores gave a more pleasurable shopping experience (F=6.601 df:2/749 p=0.001) than was stated by those who preferred Vatan Computer. Considering these findings, H1g; H1k; H1i and H1n are supported (p<0.05). MediaMarkt df Mean t** df H1a/b/c/d/e/f/g/h/i/k/l/m/n: All three stores are statistically different according to (a) layout, (b) interior colour, (c) product availability, (d) crowdedness, (e) attitude of salespeople, (f )accuracy of product information, (g) value for money, (h) accuracy of information in ads, (i) knowledge of salespeople, (k) price-quality fit, (l) interior design, (m) window display and (n) in store music. 10.093 142 Store Personality: Perceptions Towards Consumer Electronics Chain Stores in Turkey A Case of University Students 27 �Keti VENTURA / Ipek KAZANCOGLU / Elif USTUNDAGLI / Rezan TATLIDIL EFA is essential in determining the underlying constructs for a set of measured variables. In order to test how well the measured variables represent the number of constructs (Brown, 2006), CFA was conducted with Maximum Likelihood Estimation in LISREL 8.80 (Jöreskog and Sörbom, 1997). CFA verifies the factor structure of a set of observed variables and statistically tests the validity and reliability of a hypothesized factor model (Suhr, 2006, p. 1). The hypotheses tested are as follows: Store Personality: Perceptions Towards Consumer Electronics Chain Stores in Turkey A Case of University Students Figure 1. Second-Order Confirmatory Factor Analysis of Perceived Store Personality LAYOUT INTERIOR COLOR PLEASANTNESS H2: The correlated (first-order) store personality factors explain an important proportion of the variance in the data. CROWDED AFFECT ATTITUDE OF SALESPEOPLE H3: The set of store personality determinants comprises the latent variable, overall store personality. First-order CFA was performed to examine the construct more closely and establish construct validity for each of the most preferred consumer electronics chain stores. The estimation of the first-order CFA model revealed that the data defined three factors with regression coefficients varying among the three stores. All the coefficients were significant at the 5 % level (Table 5). Therefore, the hypothesis H2 was supported. Vatan Computer store had the highest correlations between “pleasantness and reliability” (r=0.68), “reliability and welcomeness” (r=0.74), “pleasantness and welcomeness” (r=0.52) respectively. In order to obtain as much understanding of the data as possible, second-order factor analysis was performed (McClain, 1996, p. 131; Correia, et al., 2008, p. 167). In comparison to first-order models with correlated factors, second-order factor models can provide a more interpretable model (Chen, et. al., 2005, p. 472). ACCURATE PRODUCT INFORMATION VALUE FOR MONEY PERCEIVED STORE PERSONALITYY RELIABILITY Journal of Economic and Social Studies ACCURATE INFORMATION IN ADS KNOWLEDGEABLE SALESPEOPLE PRICE-QUALITY FIT Second-order CFA was conducted on the three-dimensional model of perceived store personality and compared each store independently, with the same items. Figure 1 presents the hierarchical construct of perceived store personality, consisting of several correlated first-order factors and a single second-order factor. In this model, the latent variables were “perceived store personality”, “pleasantness”, “reliability”, “welcomeness”, and the observed variables are store personality determinants. “Pleasantness” and “reliability” were represented by five items each, and “welcomeness” by three items. 28 PRODUCT AVALIABILITY INTERIOR DESIGN WELCOMING WINDOW DISPLAY IN STORE MUSIC Volume 3 Number 2 Fall 2013 29 �The standardized regression coefficients of the models and associated t-values for the 13 items are shown in Table 5. The output revealed that every standardized regression coefficient and the associated t-values are significant (p ≤ 0.05). The resulting fit indices (GFI, CFI, AGFI, RMSEA, χ2 /df ) for all three store personality models displays satisfactory measure fit, which supported the construct validity of the measures. In order to assess the convergent validity of “pleasantness”, “reliability” and “welcomeness” constructs, construct reliability was computed. Construct reliability values ranged from 0.617 to 0.893, which shows an acceptable convergent validity. Discriminant validity is computed by latent variable correlation matrix (Table 6). As seen from the Table 6, although some of the AVE (Average Variance Exracted) values are at moderate level (AVE<0.5) (Paswan, 2009), the square root values of AVE for all three stores are larger than the correlations, which demonstrates an acceptable discriminant validity. 30 Journal of Economic and Social Studies Volume 3 Number 2 Fall 2013 *Significant at p ≤ 0.05 Overall Model Fit: PERCEIVED STORE PERSONALITY → PLEASANTNESS PERCEIVED STORE PERSONALITY → RELIABILITY PERCEIVED STORE PERSONALITY → WELCOMENESS PLEASANTNESS →LAYOUT PLEASANTNESS →INTERIOR COLOR PLEASANTNESS →PRODUCT AVAILABALITY PLEASANTNESS →CROWDEDNESS PLEASANTNESS →ATTITUDE OF SALESPEOPLE RELIABILITY →ACCURACY OF PRODUCT INFORMATION RELIABILITY → VALUE FOR MONEY RELIABILITY → ACCURACY OF INFORMATION IN ADS RELIABILITY → KNOWLEDGABLE SALESPEOPLE RELIABILITY → PRICE-QUALITY FIT WELCOMENESS →INTERIOR DESIGN WELCOMENESS → WINDOW DISPLAY WELCOMENESS → IN STORE MUSIC Predictive Parameter Estimates MEDIAMARKT (N=210) VATAN (N=158) Standardized Standardized Standardized t-value Regression R2 t-value Regression R2 t-value Regression R2 Coefficients Coefficients Coefficients 2.77* 0.37 0.13 5.19* 0.66 0.44 5.53* 0.69 0.48 3.22* 0.83 0.68 4.44* 0.86 0.74 10.04* 0.98 0.97 2.64* 0.50 0.25 4.88* 0.50 0.25 8.22* 0.82 0.56 7.60* 0.76 0.58 7.73* 0.77 0.60 6.33* 0.82 0.67 7.49* 0.74 0.55 7.58 * 0.74 0.55 6.35* 0.83 0.69 7.34* 0.74 0.51 6.59* 0.60 0.36 5.52* 0.58 0.34 6.09* 0.54 0.30 5.57* 0.48 0.23 4.77* 0.45 0.20 0.50 0.36 0.61 0.37 0.46 0.21 6.25* 0.54 0.41 5.08* 0.69 0.48 10.68* 0.76 0.58 6.65* 0.72 0.52 5.07* 0.69 0.48 11.88* 0.85 0.72 6.66* 0.73 0.53 5.14* 0.73 0.53 10.99* 0.78 0.61 0.55 0.30 0.42 0.17 0.73 0.53 5.55* 0.53 0.28 4.30* 0.47 0.22 11.61* 0.83 0.68 0.55 0.30 0.82 0.67 0.74 0.55 3.43* 0.67 0.45 7.30* 0.72 0.52 10.44* 0.83 0.69 2.86* 0.30 0.088 6.34* 0.54 0.30 9.20* 0.70 0.49 GFI=0.93, AGFI=0.90,CFI= 0.94,GFI=0.95, AGFI=0.90,CFI=0.98,GFI=0.90, AGFI=0.87,CFI= 0.90, RMSEA=0.033, χ262=96.34,χ2 /RMSEA=0.031, χ262=73.67, χ2/RMSEA=0.074, χ262=259.78, χ2/ df=1.55 df=1.18 df=4.19 TEKNOSA (N=384) Table 5. Results of the CFA of Store Personality Scale Among the Most Preferred Consumer Electronics Chain Stores Keti VENTURA / Ipek KAZANCOGLU / Elif USTUNDAGLI / Rezan TATLIDIL Store Personality: Perceptions Towards Consumer Electronics Chain Stores in Turkey A Case of University Students 31 �Keti VENTURA / Ipek KAZANCOGLU / Elif USTUNDAGLI / Rezan TATLIDIL Store Personality: Perceptions Towards Consumer Electronics Chain Stores in Turkey A Case of University Students Table 6. The Latent Variable Correlation Matrix: Discriminant Validity Reliability Teknosa (n=384) Pleasantness Welcomeness Reliability MediaMarkt (n=210) Pleasantness Welcomeness Reliability Vatan Computer (n=158) Pleasantness Welcomeness Reliability 0.62 0.30 0.41 0.61 0.57 0.43 0.79 0.68 0.74 Pleasantness Welcoming 0.67 0.18 0.53 0.65 0.33 0.70 0.75 0.52 0.76 Note: Square root of AVE is on the diagonal. The values of some other goodness-of-fit indices are the following: GFITEKNOSA = 0.93, AGFITEKNOSA = 0.90, CFITEKNOSA = 0.94, RMSEATEKNOSA = 0.033, χ2/ dfTEKNOSA=1.55; GFIMEDIAMARKT=0.95, AGFIMEDIAMARKT=0.90, CFIMEDIAMARKT=0.98, RMSEAMEDIAMARKT=0.031, χ2/dfMEDIAMARKT=1.18; GFIVATAN=0.90, AGFIVATAN =0.87, CFIVATAN= 0.90, RMSEAVATAN=0.074, χ2/dfVATAN=4.19. Therefore, the three store personality factors determined perceived store personality, thus H3 is supported. The factor “reliability” had the highest standardized regression coefficients among the three stores. This means that when “reliability” increases by one, the perceived store personality increases by 0.83; 0.86 and 0.98. In all three stores, the most important determinants for the “pleasantness” factor are “layout” (βTeknosa=0.76; βMediaMarkt=0.77; βVatan=0.82) and “interior color” (βTeknosa=0.74; βMediaMarkt=0.74; βVatan=0.83). The reliability factor derives mainly from the “accurate information in ads” (βTeknosa=0.73; βMediaMarkt=0.73) and “value for money” (βTeknosa=0.72; βMediaMarkt=0.69) in Teknosa and MediaMarkt; “value for money” (βVatan=0.85) and “price-quality fit” (βVatan=0.83) in Vatan Computer. The highest coefficients for the “Welcomeness” factor were “window display” (βTeknosa=0.67; βVatan=0.83) in Teknosa and Vatan Computer; “interior design” (βMediaMarkt=0.82) in MediaMarkt. the population in Turkey comprises young people (TSI, 2011, p. 13), the interest in consumer electronics is growing rapidly, thus forcing consumer electronics retailers to be more innovative in the diversification of their marketing and positioning strategies. However, it can be seen that there is insufficient diversity in the retailing mix policies and strategies among the retailers with regard to factors such as goods and services offered, store location, operating procedures, pricing tactics, store atmosphere, customer services and promotional methods. Within this context, the purpose of this study is to identify and compare the determinants of the most preferred consumer electronics chain stores’ personalities, as perceived by a representative sample of Turkish university students. It aims to explore the factors that make up the specific store personality determinants in a consumer electronics chain store context. The reason for this is the critical need for the most popular electronics product chain stores to differentiate and gain competitive advantage, especially for young consumers such as university students, who represent an important section of this market (Accenture, 2012, p. 15). In the literature, there are few studies relating to store personality. This concept was firstly introduced by Martineau (1958), who mainly focused on store image attributes in defining store personality, while d’Astous and Levesque (2003) developed a “general” store personality scale based on Aaker’s (1997) brand personality dimensions. Additionally, Brengman and Willems (2008) developed a scale using retailing mix, aimed specifically at “fashion stores”. As the scales developed in these studies are generalized and context based, they are not appropriate for consumer electronics chain stores. Accordingly, these studies have been utilized as the basis for a new scale specifically designed to gain an understanding of university student perceptions of chain stores in the electronics sector. The consumer electronics market is one of the fastest growing in Turkey. In recent years, the entry of global chain stores into the Turkish market and the extension policies of local chain stores have increased competition in this sector. As 34.6 % of The findings of the present study contributes to the literature by developing and validating a store personality scale specifically for consumer electronics retailers based on university students’ perceptions of store personality determinants. In the Turkish market, Teknosa, MediaMarkt and Vatan Computer were selected as the most preferred chain stores. In the study, in order to identify specific factors of store personality, EFA was conducted and three factors were identified: “reliability”, “pleasantness” and “welcomeness”. Following this, CFA was performed on these factors and a confirmatory factor analytic model was generated. First-order models with correlated factors were performed to examine the construct more closely, while second-order factor analysis was used to define the most important factors and determine the relative importance of each factor to the overall, for each 32 Volume 3 Conclusion and Implications Journal of Economic and Social Studies Number 2 Fall 2013 33 �Keti VENTURA / Ipek KAZANCOGLU / Elif USTUNDAGLI / Rezan TATLIDIL Store Personality: Perceptions Towards Consumer Electronics Chain Stores in Turkey A Case of University Students chain store (Correia, et al., 2008, p. 173). The results indicate that “reliability” is perceived to be the most important factor in all three stores. In contrast, factors that are perceived to be least important by university students were “pleasantness” for Vatan Computer and Teknosa, “welcomeness” for MediaMarkt. One of the most important items perceived was “Value for money”, which explains “reliability” factor in all three store. This is due to the fact that purchasing electronic products requires high involvement which means that consumers put a greater emphasis on finding information about brands and products when making purchases. Moreover, in Teknosa and MediaMarkt, “accurate information in the advertisements” of the stores and in Vatan Computer “price-quality fit” best explains the “reliability” factor. As argued by Brengman and Willems (2009), it may be appropriate to propose that the managers of store chains should reduce the perception of overcrowding by rearranging the layout to facilitate shopping and in store traffic flow, to create a more pleasant store atmosphere. Managers may be encouraged to develop strategies for relieving congestion in crowded areas such as entrance, halls, cash register locations, customer services and shopping areas. This study shows the potential for a store-personality scale developed for consumer electronics chain stores in helping retailers understand the perception of young customers. This understanding can enable stores to reposition themselves in a competitive market by implementing an integrated communication strategy. The second store personality factor, “pleasantness” is found to be best explained by “layout” and “interior design” in all three stores. “Window display” is very much related with the “welcomeness’ factor in Teknosa and Vatan, while “interior design” is the most important item in explaining this factor in MediaMarkt. The main academic contribution of this study is that it can be seen as a preliminary effort to identify the most distinctive personality factors and determinants of consumer electronics chain stores perceived by university students in Turkey. As consumer electronics stores and their personality characteristics have received a limited amount of research attention in the marketing literature, this study is expected to be useful for potential domestic and foreign consumer electronics retailers investing in this sector. These findings emphasize the need for accurate information in the purchasing decision making process for high-involvement products, such as consumer electronics (Ahmed, et al., 2004). Young consumers prefer a reliable store that gives accurate information, value for money and has price-quality fit. In addition, the store atmosphere and merchandise are perceived as the most important determinants of store personality by university students. This may be due to the need for young consumers e.g. university students, to be able to touch, hear and even smell products, as well as see them, which contributes to a pleasant shopping experience and a feeling of being welcome in the store. Considering these findings, in order to increase the reliability of such stores it may be appropriate to recommend that managers ensure that sales personnel are provided with information relative to the products, as well as the price. This is considered to promote sales. In addition, stores should avoid misleading advertising and sales promotions as this can cause store avoidance. In order to prevent this problem and assist in monitoring students’ buying habits, loyalty cards can be given to contracted universities. Also, detailed explanations regarding the usage of products can be given on their web sites in the form of videos. Another vital measure is to improve after-sales service, such as maintenance, installation, and repair and even offer replacement with another product where necessary. Considering of the importance of the university market, it would be very useful for chain stores to promote their most popular products at university festivals, organize a variety of events and give special incentives to students, in order to capture these potential long term customers of the future. 34 Journal of Economic and Social Studies Limitations and Future Research This study has a number of limitations. In sampling design in particular, due to budget limitations, the use of convenience sampling method in only one metropolitan city, Izmir, and one university may not represent the general perceptions of Turkish university students. However, despite its limitations, this study can be seen as a preliminary effort in analyzing the perceptions of Turkish university students, a highly profitable segment of the market (Accenture, 2012, p. 15). In his study, Martineau (1958) mostly focused on store image attributes to define store personality, while d’Astous and Levesque (2003) utilized Aaker’s (1997) brand personality dimensions to develop a “general” store personality scale. Additionally, Brengman and Willems’ (2008) developed a scale only for “fashion stores”, which is therefore unsuited to consumer electronics. The scale developed in this study can only be applied to consumer electronics chain stores, because it includes specific determinants. Additionally, this scale can be used to measure the effect of store personality determinants on store loyalty, store image and alternative methodologies, Volume 3 Number 2 Fall 2013 35 �Keti VENTURA / Ipek KAZANCOGLU / Elif USTUNDAGLI / Rezan TATLIDIL Store Personality: Perceptions Towards Consumer Electronics Chain Stores in Turkey A Case of University Students including the usage of both qualitative and quantitative techniques. This process would be able to provide a deeper understanding of consumer perceptions and attitudes. Chen, F. F., Sousa K. H., & West S. G. (2005). Testing Measurement Invariance of Second-Order Factor Models. tructural quation Modeling, 12(3), 471–492, Lawrence Erlbaum Associates, Inc. doi: 10.1207/s15328007sem1203_7 Further studies can be made into different types of retailers, as well as customer segments from other countries in order to explore the effects of cultural differences. In addition, further research conducted on a wider sample size involving other universities in Izmir and other metropolitan cities would allow a stronger representative view. Correia, A., Moital, M., Da Costa, C. F. & Peres, R. (2008). The determinants of gastronomic tourists’ satisfaction:a second-order factor analysis. Journal of oodservice, 19, 164–176. doi: 10.1111/j.17454506.2008.00097.x Darden, W. R. & Babin, B. J. (1994). 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Psychology & Marketing, 25(6), 521-537. doi: 10.1002/mar.20223 Journal of Economic and Social Studies The Role of Twin Deficits Problem in Sustainable Growth: An Econometric Analysis for Turkey Halil UCAL Adnan Menderes University Faculty of Economics and Administrative Sciences Nazilli, Aydin, Turkey hucal@adu.edu.tr Orth, U. R., Limon, Y. & Rose, G. (2010). Store-evoked affect, personalities, and consumer emotional attachments to brands. Journal of Business esearch, 63, 1202 – 1208. doi: 10.1016/j. jbusres.2009.10.018 Paswan, Audhesh (2009), “Confirmatory Factor Analysis and Structural Equations Modeling: An Introduction” Seminer Notes, http://www.cob.unt.edu/slides/paswan/BUSI6280/CFASEM%20-%20Intro-May%2018%202009.ppt, Access Date: 5.10.2012 Punja, G. & Moon, J. (2002). Positioning options for achieving brand association a psychological categorization framework. 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Does country-of-origin matter in the relationship between brand personality and purchase intention in emerging economies?. International Marketing eview, 25(4), 458–474. doi: 10.1108/02651330810887495 Wesley, S.C., Fowler, D.C., Vazquez, M.E. (2006) “Retail personality and the Hispanic consumer”, Managing Service Quality, 16 (2), 167-84 Yozgat, U. & Deniz, R. B. (2008). Specialty retailers in consumer electronics technology markets as a business model. Journal of Global trategic Management, 3, 114-116. Zentes, J., Morschett, D & Schramm-Klein, H. (2008). Brand personality of retailers – an analysis of its applicability and its effect on store loyalty. The International eview of etail, istribution and onsumer esearch, 1. doi: 10.1080/09593960701868282 Abstr ct In economics literature the relationship between budget deficit and current account deficit is known as twin deficits hypothesis. The Keynesian Approach accepts a relationship between two deficits. In contrast to this, icardian quivalence Hypothesis defends there is no relationship between these two deficits. win deficits have become the subject of several studies to test which of these hypotheses are reliable but no consensus has been achieved. ome studies found a relationship from budget deficit to current account deficit but some of them had the opposite result. specially after 1980 it is known that many developed and developing countries encountered with this twin deficits problem. urkey also has the problem of twin deficits. Therefore, it is important to find whether there is causality between them and the direction of this causality. In this study the relationship between budget deficit and current account deficit is examined by using Johansen ointegration Analysis. This study is based on period 1996:Q1-2011:Q4. According to results of cointegration; variable coefficients are statistically significant and consistent with what we expected in hypotheses. urrent account deficit ( A ) has a significant negative effect on budget deficit (B ). When there is a 1% increase in A , B decreases 0,12%. This finding is consistent with economic theory because according to Keynesian Approach two deficits have relationship with each other. However, in contrast to this approach, the direction is from A to B and also coefficient is negative. KEYWO D Budget eficit, urrent Account eficit, ustainable Growth, conometric Modelling, urkey A I LE HI O Y ubmitted: 5 ctober 2012 esubmitted: 18 ctober 2012 Accepted: 09 January 2013 JEL odes: H62, 32, 4 38 Journal of Economic and Social Studies Volume 3 Number 2 Fall 2013 39 � 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. 2384 Title A name given to the resource Store Personality: Perceptions Towards Consumer Electronics Chain Stores in Turkey A Case of University Students Author Author Ventura, Keti Kazancoglu, Ipek Ustundagli, Elif Tatlidil, Rezan Abstract A summary of the resource. The purpose of this study is to identify, develop and compare the determinants of store personality of the most preferred consumer electronics chain stores, as perceived by young consumers in urkey. A questionnaire survey including a 22-item store personality scale was conducted among 855 students using a convenience sampling method. xploratory factor analysis ( A) and confirmatory factor analysis ( A) was performed. indings suggest that greater accuracy of information is needed in the purchasing decision related to high involvement products such as consumer electronics. Also it was found that younger consumers prefer reliable stores that give accurate information, value for money, and provides price-quality fit. This study addresses the neglected area of store personality development and validation for consumer electronics relates through an understanding of young consumers perceptions towards store personality determinants. 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 2013-12-19 Keywords Keywords. Article PeerReviewed H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/7bc56a7562f1cc9f344f9e73d086f781.pdf 8dbdcc0ded47638609c22c287ae1ca5e PDF Text Text ������   ̅ ̅ Σx n Σy n Σxy – xΣy Σx2 – xΣx �Σxy – yΣx Σy2 – y Σx √ Σ ̅ ̅ ��√( )( ) ������� https://omeka.ibu.edu.ba/files/original/7b3a034a3caeb3ddbb7701581666cd00.docx eabb21479fea5f92432e7f196dd06e3a 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. 3090 Title A name given to the resource Strane direktne investicije i ekonomski razvoj: Efekti priliva stranih direktnih investicija u BiH Author Author BEGIĆ, Eldin BIŠČEVIĆ, Azra Abstract A summary of the resource. Oblik međunarodnog kretanja kapitala koji može imati značajniji efekt na ekonomski razvoj, pokrenuti privredu i potaknuti zapošljavanje jesu strane direktne investicije (FDI). Obim struktura i efikasnost investicija značajno utiču na razvoj ekonomije i društva. Argumenti u prilog stranim investicijama uveliko nastaju iz analize determinanti ekonomskog rasta, efikasnosti investicija i njihovom uticaju na ekonomski razvoj. Strane investicije se doživljavaju kao način popunjavanja jaza između raspoložive domaće štednje, devizne razmjene, prihoda vlade i sposobnosti ljudskog kapitala, te željenog nivoa tih resursa potrebnih da bi se postigli ciljevi rasta i razvoja. U radu se primjenjuje model jednostruke linearne regresije. Zavisna varijabla je bruto društveni proizvod (BDP) BiH, za koji je postavljeno da je funkcija FDI. Nakon analize rezultati regresijske analize će se prikazati koeficijentom linearne korelacije između nezavisne varijable i zavisne varijable, a time će se prikazati efekt priliva FDI u BiH. Publisher An entity responsible for making the resource available Pravni fakultet Univerziteta u Bihaću i Centar za društvena istraživanja Internacionalnog Burč univerziteta Date A point or period of time associated with an event in the lifecycle of the resource 2014 Keywords Keywords. Article PeerReviewed K Law (General) https://omeka.ibu.edu.ba/files/original/5d759da662749a315db8ed9253b21645.pdf 708d9ccfdc8e6cbc51a63e459f9bafa8 PDF Text Text 1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo Strategic Make-or-Buy Decision-supporting Process: Adaptability to Sustainable Development Aspects Robert A. GOEHLICH1 European Business School, Oestrich-Winkel, Germany robert@goehlich.com Abstract: Real world outsourcing decisions are very seldom based on a sound trade-off of risks, costs that these risks impose and benefits. The present paper attempts to overcome some of these shortcomings by developing an informal process. Dividing the make-or-buy question into many sub-questions based on, in this case, 16 objectives and characteristics, helps decision-makers generate a transparent and strategy-oriented solution with fair attention to all important considerations. By contrast, the less structured intuitive approach allows the decision-maker to weigh only a few arguments/propositions simultaneously – typically those which have current subjective importance for the decider. Due to the modularity of this process, it can be extended easily to additional objectives and characteristics, e.g., those one that representing sustainable development aspects. The process allows one to determine what organizational architecture is best suited to a specified activity. Keywords: Corporate Governance, Outsourcing, Sustainable Development, Strategic Makeor-Buy Decision, Process, Vertical Integration Introduction Spot Market Joint Venture Strategic Alliance Supply Contract Franchise Agreement Internal Production Lease Contract More Integrated Outsourcing More Outsourced Vertical Integration Figure 1: Illustration of Organizational Architectures A company has many architectural choices from which to produce its products or services (Figure 1). At one extreme, the product or service can be purchased from any supplier in the spot market. At the other extreme, the company can produce the product or service internally within a division. Between the extremes are various long-term contracts, such as strategic alliances, franchise agreements, lease contracts, joint ventures and supply contracts (Brickley, Smith & Zimmerman, 2006). Note that a certain overlap exists between different types of long-term contracts and typology can vary in some buyer-supplier relationships. Long-term contracts are introduced briefly, as follows: • Strategic Alliance: Alliances, or constellations of bilateral agreements among companies, are increasingly necessary to successfully compete in today’s global market. Strategic alliances are based on the exchange of hostages (e.g., surety bonds, exchange of debt or equity positions) and allow the development of long- 1 Alumni of European Business School, International University Schloss Reichartshausen, Department Law, Governance & Economics, Rheingaustrasse 1, 65375 Oestrich-Winkel, Germany, Mobile: +49-(0)174-25-313-87, email: robert@goehlich.com, Internet: www.goehlich.com 144 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo term collaborative intentions that permit partners to meet strategic goals (Lau, 1994; Mattsson, 1995). Alliances are difficult to define because their structural characteristics are diverse. Japanese strategic alliances, e.g., operate in networks of relationships between companies based on long-term mutuality, rather than on clearly defined regulations or on inter-firm hierarchical organizational structures (Gerlach, 1997), as commonly practiced in Western countries. Tactical alliances (e.g., code-sharing agreements), which are loose forms of collaboration, and normally do not involve major resource commitments, are another form of strategic alliances (Bennett, 1997). • Franchise Agreement: According to Todeva and Knoke (2005), franchising means that a franchiser (the buyer) grants a franchisee (the supplier) the use of a brand-name identity, but retains control over pricing, marketing and standardized service norms. • Lease Contract: Leasing implies that one company grants another the right to use patented technologies or processes in return for royalties (Todeva & Knoke, 2005). In the literature (Miller & Upton, 1976), leasing is distinguished between short- and long-term leases. Short-term leases are for the shortest practicable interval of time, e.g., three hours for renting a bicycle, one day for renting a car or several years for renting specialized industrial equipment. Long-term leases are used for an extension over more than a single period, e.g., several years for renting a copy machine. • Joint Venture: Joint ventures involve two or more organizations, each of which shares in the decisionmaking activities, such as marketing or research and development (R&D), of the jointly owned entity (Geringer, 1988). Joint ventures with 50-50 ownership are common. • Supply Contract: Suppliers can be distinguished into four categories (Kamath & Liker, 1994): (1) partner suppliers are jointly involved in specification writing from the beginning of the project; (2) mature suppliers wait for rough specifications from the buyer before they begin work; (3) subordinate suppliers manufacture based on detailed specifications given from the buyer; and (4) contractual suppliers propose standard parts that are available through a catalog. The study is structured as follows. In the next section, the process is introduced, the literature is qualitatively reviewed by presenting the pros and cons concerning vertical integration and outsourcing, and the resulting decision-supporting tool entitled “MoB-Tool” is shown. Finally, section three offers a discussion of the choice of items for the “Settings” submodule, informal versus formal statements and limitations. The Process General The make-or-buy decision-supporting process is structured as shown in Figure 2 and comprises four sub-modules. The submodule “Settings” is illustrated in detail in Figure 3. This module processes the input data of strategic objectives, organizational characteristics, product characteristics and environmental characteristics. The module is based on a balanced scorecard philosophy, of which detailed information can be found in the discussion section of this study. The submodule “Integration Pros” processes the main advantages of vertical integration from the point of view of the final assembler (Figure 4), while the submodule “Outsourcing Pros” processes those advantages of outsourcing as shown in Figure 5. The submodule “Results” processes the output data as shown in Figure 6. Vertical integration and outsourcing propositions are divided into control, stability and coordination aspects. Control aspects are those that help the organization in terms of ease of monitoring, high transparency of processes, low opportunistic behaviors and low bureaucracy. In the group of stability aspects are those propositions that support the organization’s existence, such as high quality, high protection of sensitive information, low risk and high flexibility. Coordination aspects comprise propositions that increase positive interactions, such as high organizational synergies, low costs and better strategy realization. The submodule “Results” presents the results of this process in the form of clear graphics. 145 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo Figure 2: Overview of the Make-or-Buy Decision-supporting Process Figure 3: Settings Submodule Figure 4: Integration Pros Submodule 146 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo Figure 5: Outsourcing Pros Submodule Figure 6: Results Submodule Qualitative Assessment Each submodule and its associated items, or propositions, is organized in the same manner for simple review. For reader-friendly use, all information is prepared in the same format. The “Settings” submodule items are introduced briefly, while the “Integration Pros” submodule propositions, “Outsourcing Pros” submodule propositions and “Results” submodule items are available upon request. a) Settings Submodule (Strategic Objectives) • Set01 Increase market share (financial Key Performance Indicator (KPI)) Description: Market share indicates the percentage of sales in a given industry segment or sub-segment that are captured by the organization. This indicator has been widely used in the strategically-oriented literature and is stressed by PIMS (1977), for instance. Range: low = less than 30% share; high = greater than 70% share 147 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo • Set02 Increase quality (customer KPI) Description: Quality indicates the level of flawlessness of an activity and, when high, has a positive effect on customer satisfaction. Range: low = faulty; high = flawless • Set03 Increase stability (process KPI) Description: Stability indicates the desired degree of risk avoidance. For example, leasing entails low levels of financial resource commitment, while integration reduces risks of technology plagiarism. Range: low = risk neutral, organization is not afraid to take chances and be fully responsible for any costs; high = risk averse, organization seeks to avoid risk • Set04 Increase short-term profit (financial KPI) Description: Profit is a basic measure of the profitability of the organization and reveals the returns an organization can generate from creating and selling its products. Higher profits reflect greater efficiency in turning stock into income and larger budgets available for reinvestment into the organization for research and development, marketing and other investments (Razvi, 2007). Range: low = no profit; high = high profit • Set05 Increase flexibility (process KPI) Description: Flexibility indicates the desired degree of ability to adapt organizational strategy to changing market conditions. Range: low = adaptation not possible or very costly; medium = adaptation possible, but costly; high = easy adaptation • Set06 Increase control (process KPI) Description: Control indicates the desired degree of command power by management over activities. Range: low = no control; medium = partial control; high = full control b) Settings Submodule (Organizational Characteristics) • Set07 Organization size (HR & innovation KPI) Description: Size is an indicator of the organization’s (human) resource availability. This indicator is most often interpreted as a source of organizational costs (Shepherd, 1972) because it is assumed to affect performance negatively (Rumelt, 1982). Range: low = a few hundred employees; medium = a few thousand employees; high = Large Scale Enterprise (LSE), over ten-thousand employees • Set08 Technical experience (HR & innovation KPI) Description: Experience refers to the extent to which employees are involved and learn from similar products (Koelle, 2003). Range: low = new team with no relevant product experience; medium = some experience with related products; high = extensive experience with similar products • Set09 Organizational skills (HR & innovation KPI) Description: Skills are an indicator of employee knowledge to coordinate projects and programs. Range: low = no project management experience; high = extensive project management experience c) Settings Submodule (Product Characteristics) • Set10 Product complexity (process KPI) Description: Complexity refers to the technical nature of the product. Range: low = simple unit; medium = connection of simple systems; high = connection and interaction of advanced systems 148 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo • Set11 Asset specificity (process KPI) Description: The degree of specificity for a certain activity is measured by the difference between the cost of the asset and the value of its second best use (Williamson, 1985). Range: low = reversible investment, e.g., capital expenditures; high = irreversible investment, e.g., knowledge acquisition • Set12 Strategic vulnerability (process KPI) Description: The degree of vulnerability of strategic organizational development is measured by the amount the activity contributes to, or even represents, the organization’s core competencies. Range: low = no relation to core competence; high = sensitive influence on core competences • Set13 Technology uncertainty (financial KPI) Description: This indicator refers to the maturity level of technology used. Range: low = variation of existing design with minor modifications; medium = new design, but with existing components; high = first generation system with advanced state-of-the-art technology d) Settings Submodule (Environmental Characteristics) • Set14 Intensity of competition (process KPI) Description: This indicator refers to the number of competitors in the market. Range: low = no competitors, monopoly; medium = several competitors, oligopoly; high = many competitors, perfect competition • Set15 Market demand uncertainty (process KPI) Description: This indicator includes unpredictable customer utilization, buying power, market seasons, standards, etc. Range: low = easy forecasting with no surprises; medium = challenging forecasting with some surprises; high = unforeseeable circumstances • Set16 Quality of business climate (HR & innovation KPI) Description: The quality of a country’s business climate is measured by the Business Environment Risk Index (BERI). BERI data is commercially available from Business Environment Risk Intelligence (2005). This data includes the following criteria with associated weights in brackets (Hollensen, 2007): political stability (12%), economic growth (10%), currency convertibility (10%), labor productivity (8%), short-term credit (8%), long-term loans (8%), attitude towards the foreign investor (6%), nationalization (6%), monetary inflation (6%), balance of payments (6%), enforceability of contracts (6%), bureaucratic delays (4%), communication infrastructure (4%), local management (4%) and services (2%). Estimating the values of these criteria leads to a sufficiently accurate indicator value for the purposes of this study. Range: low = unacceptable, very high risk; high = superior conditions, favorable environment for investors, advanced economy Results The make-or-buy decision-supporting process is structured in five phases (Phase 1: Define Mission Statement, Phase 2: Define Strategic Objectives and Independent Factors, Phase 3: Define Weighting of Factors, Phase 4: Check Plausibility of Integration Pros and Outsourcing Pros Submodules, and Phase 5: Obtain Results) and can be applied to various challenging cases. For this, I develop a tool entitled “MoB-Tool,” as shown in Figure 7. 149 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo Figure 7: Extract from the MoB-Tool Discussion General The following section attempts to widen the study’s point of view through a discussion centered on: (1) the choice of items for the “Setting” submodule; (2) a trade-off between informal and formal statements; and (3) limitations concerning the introduced process. Choice of Items for “Settings” Submodule The balanced scorecard philosophy is used to create the “Setting” submodule. The balanced scorecard, introduced by Kaplan and Norton (1992), is a widely used strategic business performance measurement system. This method seeks to report on leading indicators of an organization’s health, rather than referring to traditional accounting measures alone. These leading indicators are called Key Performance Indicators (KPI) because they are critical to the successful execution of an organization’s strategy. Based on the strategic goals of an organization, target values for KPIs are set. KPIs enable an organization to measure and monitor its performance on a strategic and operational level. The goal is to establish a common KPI language that spans all areas of an enterprise. Typically, KPIs are used in a post-ante context to evaluate an organization’s past performance. Krauth et al. (2005) reason that KPIs should be utilized in the planning phase as well, thus ex-ante. I follow this approach for the make-or-buy decision-supporting process. A key attribute of this process is its support for identifying causal linkages between components of the business that fulfill the strategy (i.e., to determine the benefit share of each proposition that contributes to either vertical integration or outsourcing). 150 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo Often the balanced scorecard is broken down into a financial, customer, process and an HR & innovation perspective. This procedure aims to avoid the classic problems of measurement, such as (Van Aken & Coleman, 2002) use of too many metrics, use of exclusively cost metrics, use of only short-term focused metrics and use of metrics that drive the wrong behaviors. The choice of KPIs is organization-specific and depends upon its goals. An organization’s goals change over time (Allio, 2006). In a start-up high technology company, for example, managers focus on reliability. In the growth stage, managers concentrate on market share. In mature industries, managers focus on production costs and/or capacity utilization. In an aging industry, managers primarily focus on cash flow. I select those KPIs for the make-or-buy decision that I recommend for use by a typically mature organization. Due to the modularity of this process, it can be extended easily to additional KPIs and/or existing KPIs can be terminated. In addition, my proposed weighting (I assume equal weighting) of each KPI is easily changeable. Sustainable development is defined as a development that meets the needs of the present without compromising the ability of future generations to meet their own needs (United Nations, 1987). The field of sustainable development aspects can be abstractly broken into three essential parts: environmental, economic and sociopolitical sustainability. In particular, I recommend selecting indicators from the database of Sustainable Measures (2009) if no other data are given. For example, the environment indicator entitled “CO2 emissions from transportation” of that list can be adapted to a strategic objective entitled “Set07 Reduce CO2 emissions” and added to the Make-or-Buy Tool. Informal Versus Formal Statements Some readers may prefer or expect formal statements to informal ones. I choose to use informal statements for two reasons. First, dealing with make-or-buy related theories from a qualitative view (i.e., using informal statements) rather than a quantitative view (i.e., using formal statements), makes it easier to determine the potential and weaknesses of investigated theories, items and propositions (Goehlich & Bebenroth, 2008). Second, my motivation and attempt is to generate an overall make-or-buy decision-supporting process for organizations toward understanding the commonalities, distinctions and interactions of the (normally isolated watched) make-or-buy theories and known recommendations. Furthermore, I am motivated to provide a combined account of the costs, risks and benefits of outsourcing versus vertical integration. To accomplish this, I discover that the top-down approach of using informal statements is superior to the bottom-up approach of using formal statements: simulating the complex architecture of organizations by only formal statements would cause a disaster due to the overwhelmingly unmanageable number of equations it would create. Use of informal statements permits the necessary distance required for the “battlefield of theories” and allows me to uncover important coherences. This is in accordance with Gibbons (2005, p. 236), who states that “firms have invented far more ways to work together than organizational economics has so far expressed (not to mention evaluated)” combined with Krugman’s (1995, p. 54) warning for “sensible ideas that could not be effectively formalized [and] formalizable ideas that seem to have missed the point.” Further consideration can be found in Baker, Gibbons and Murphy (2004). Limitations Extant make-or-buy related studies are quite voluminous. Thus, complete implementation of this literature into the make-or-buy decision-supporting process is beyond the scope of the present study. Rather, I limit my discussions and investigations on those studies that I found to have significant influence on make-orbuy decisions, especially for managers. However, I find that many extant studies suffer from measurement problems, in particular with respect to sustainable development aspects, such as follows: • Some factors, such as motivational, cultural and social factors are hard to handle, but may strongly influence decisions. • Companies from different countries generally apply divergent success criteria because of unique cultures (Yan & Zeng, 1999). In addition, each culture has specific cultural codes, e.g., the trust-based cooperative norms of Japanese society encourage high collaboration rates among companies (Todeva & Knoke, 2005). Thus, assessing international scenarios is especially complicated because results are biased by different cultural environments. 151 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo • A challenge exists whether to use objective outcome indicators (e.g., financial gains, number of innovations, revenue), subjective indicators (e.g., partner satisfaction with the collaboration, customer service, corporate identity) or both, in order to fully assess the performance of organizations. Thus, the precision of propositions is limited. Yet, I assume that a preponderance of indication, gathered across plentiful studies of diverse industries, time periods and geographic regions using different approaches, yields convincing evidence as to the validity of the introduced make-or-buy decision-supporting process. Conclusion The main outcome of this study is the development of a make-or-buy decision-supporting process. A structured application procedure makes this process attractive to any manager who needs a simple and transparent tool to support make-or-buy decisions. Dividing the make-or-buy question into many sub-questions based on, in this case, 16 objectives and characteristics, helps decision-makers generate a transparent and strategy-oriented solution with fair attention to all important considerations. By contrast, the less structured intuitive approach allows the decision-maker to weigh only a few arguments/propositions simultaneously – typically those which have current subjective importance for the decider, e.g., bad news about Dollar/Euro currency trends, which would favor an outsourcing decision or bad news about risk of revealing know-how, which would favor an integration decision. The next step, which is beyond the scope of the present study, is an empirical validation of the tool in the form of interviews with experts, economists and politicians. Note The views reported in this paper are those of me alone, and not those of any institution. All errors and omissions, which may unwittingly remain are the sole responsibility of me. References Allio, M. (2006). “Metrics that matter: seven guidelines for better performance measurement,” Handbook of Business Strategy, Vol. 7, No. 1, pp. 255-263. Baker, G., R. Gibbons & K.J. Murphy (2004). “Strategic alliances: bridges between ‘islands of conscious power’,” Working Paper, Harvard Business School, Boston. Bennett, M.M. (1997). “Strategic Alliances in the World Airline Industry,” Progress in Tourism and Hospitality Research Journal, Vol. 3, pp. 213-223. Brickley, J.A., C.W. Smith & J.L. Zimmerman (2006). Managerial Economics and Organizational Architecture, Fourth Edition, McGraw-Hill, New York. Business Environment Risk Intelligence (2005). “Risk Ratings, Analyses, and Forecasts for over 140 Countries,” http://www.beri.com, Author, Friday Harbor, WA, accessed: 27.1.2008. Geringer, M. (1988). Joint venture partner selection: Strategies for developed countries, Quorum Books, New York. Gerlach, M.L. (1997). Alliance Capitalism: The Social Organization of Japanese Business, University of California Press, Berkeley, CA. Gibbons, R. (2005). “Four formal(izable) theories of the firm?” Journal of Economic Behavior and Organization, Vol. 58, pp. 200-245. Goehlich, R.A. & R. Bebenroth (2008). “Outsourcing Strategies in Europe, USA and Japan: A Case of Space Organizations,” 国民経済雑誌 (The Kukumin-Keizai Zasshi: Journal of Economics & Business Administration), Vol. 197, No. 3, pp. 75-89. Kamath, R.R. & J.K. Liker (1994). “A second look at Japanese product development,” Havard Business Review, pp. 154170. Kaplan, R.S. & D.P. Norton (1992). “The Balanced Scorecard – Measures that Drives Performance,” Harvard Business Review, Vol. 75, No. 2, pp. 70-79. Koelle, D.E. (2003). Handbook of Cost Engineering for Space Transportation Systems with Transcost 7.1, TCS – TransCostSystems, Ottobrunn, Germany. 152 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo Krauth E., H. Moonen, V. Popova & M. Schut (2005). “Performance measurement and control in logistics service providing,” The Icfaian Journal of Management Research, Vol. 4, No. 7, pp. 7-19. Krugman, P. (1995). Development, Geography and Economic Theory, MIT Press, Cambridge, MA. Lau, R. (1994). “Why everyone wants to know more about strategic alliances,” Broker World, Vol. 14, No. 2, pp. 48-54. Mattsson, L.G. (1995). “International strategies: a network approach,” in: Faulkner, D. (Ed.), International Strategic Alliances, McGraw-Hill, London. Miller, M.H. & C.W. Upton (1976). “Leasing, Buying, and the Cost of Capital Services,” The Journal of Finance, Vol. 31, No. 3, pp. 761-786. PIMS (1977). Selected Findings from the PIMS Program, Strategic Planning Institute, Cambridge, MA. Razvi, N. (2007). “Business Process Expert – Business KPIs,” SAP, https://wiki.sdn.sap.com/wiki/x/x4Y, Walldorf, Germany, accessed: 2.2.2008. Rumelt, R.P. (1982). “Diversification strategy and profitability,” Strategic Management Journal, Vol. 3, No. 3, pp. 359-369. Shepherd, W.G. (1972). “The elements of market structure,” Review of Economics and Statistics, Vol. 54, pp. 25-37. Sustainable Measures (2009). “Database,” http://www.sustainablemeasures.com, Author, West Hartford, CT, accessed: 20.4.2009. Todeva, E. & D. Knoke (2005). “Strategic alliances and models of collaboration,” Management Decision Journal, Vol. 43, No. 1, pp. 123-148. United Nations. (1987). “Report of the World Commission on Environment and Development,” General Assembly Resolution 42/187, http://www.un.org/documents/ga/res/42/ares42-187.htm, Author, New York, accessed: 2.3.2009. Van Aken, E.M. & G.D. Coleman (2002). “Building Better Measurement,” Industrial Management, Vol. 44, No. 4, pp. 2833. Williamson, O.E. (1985). The Economic Institutions of Capitalism, Free Press, New York. Yan, A. & M. Zeng (1999). “International joint venture instability: a critique of previous research, a reconceptualization, and directions for future reseach,” Journal of International Business Studies, Vol. 30, pp. 397-414. 153 � 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. 157 Title A name given to the resource Strategic Make-or-Buy Decision-supporting Process: Adaptability to Sustainable Development Aspects Author Author GOEHLICH, Robert A. Abstract A summary of the resource. Real world outsourcing decisions are very seldom based on a sound trade-off of risks, costs that these risks impose and benefits. The present paper attempts to overcome some of these shortcomings by developing an informal process. Dividing the make-or-buy question into many sub-questions based on, in this case, 16 objectives and characteristics, helps decision-makers generate a transparent and strategy-oriented solution with fair attention to all important considerations. By contrast, the less structured intuitive approach allows the decision-maker to weigh only a few arguments/propositions simultaneously – typically those which have current subjective importance for the decider. Due to the modularity of this process, it can be extended easily to additional objectives and characteristics, e.g., those one that representing sustainable development aspects. The process allows one to determine what organizational architecture is best suited to a specified activity 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 HB Economic Theory https://omeka.ibu.edu.ba/files/original/c389941594470332999e8d5bc3245198.pdf 9081a01f290a37dce5bf5405e87a739f PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo Strategic Motives and Foreign Direct Investment Activities of Turkish Manufacturing Firms: An Empirical Study Harun Kaya İstanbul University, İstanbul, Turkey harun.kaya@İstanbul.edu.tr dr.hrn.ky@gmail.com This paper aims to determine and assess strategic motives of Turkish manufacturing firms’ (TMFs) foreign direct investment (FDI) involvement by the use of a broad set of factual and perceptual measures. Relying on the past research we have developed a number of hypotheses relating to firm characteristics and motives. Based on the analysis of 94 parent firm managers’ responses to a survey, first, we find that market-related motives (such as market potential, market access) appear to be the most important motives. Second, the results show that the relative importance of TMFs’ strategic motives does not vary with parent firm age; but, to a limited degree, they vary depending on subsidiary firm age. Third, strategic motives, to some extent, differ based on the size of the sampled firms and the size of their foreign subsidiaries. Fourth, motives of TMFs do not vary based on their sub-sector and entry mode. Finally, the results suggest that favorable business environment seeking and strategic asset seeking motives are significantly associated with investment in developed countries (DCs); and, cultural asset exploiting and efficiency seeking motives are significantly associated with investment in less developed countries (LDCs). Keywords: Foreign Direct Investment (FDI), Strategic FDI Motives, Emerging Market-Based FDI Firms, Turkish Manufacturing Firms, Entry Modes, Host Country Selection. 150 � 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. 1639 Title A name given to the resource Strategic Motives and Foreign Direct Investment Activities of Turkish Manufacturing Firms: An Empirical Study Author Author KAYA, Harun Abstract A summary of the resource. This paper aims to determine and assess strategic motives of Turkish manufacturing firms’ (TMFs) foreign direct investment (FDI) involvement by the use of a broad set of factual and perceptual measures. Relying on the past research we have developed a number of hypotheses relating to firm characteristics and motives. Based on the analysis of 94 parent firm managers’ responses to a survey, first, we find that market-related motives (such as market potential, market access) appear to be the most important motives. Second, the results show that the relative importance of TMFs’ strategic motives does not vary with parent firm age; but, to a limited degree, they vary depending on subsidiary firm age. Third, strategic motives, to some extent, differ based on the size of the sampled firms and the size of their foreign subsidiaries. Fourth, motives of TMFs do not vary based on their sub-sector and entry mode. Finally, the results suggest that favorable business environment seeking and strategic asset seeking motives are significantly associated with investment in developed countries (DCs); and, cultural asset exploiting and efficiency seeking motives are significantly associated with investment in less developed countries (LDCs). Keywords: Foreign Direct Investment (FDI), Strategic FDI Motives, Emerging Market-Based FDI Firms, Turkish Manufacturing Firms, Entry Modes, Host Country Selection. 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 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 https://omeka.ibu.edu.ba/files/original/be95e0f57de58b08cf09aea79fd76f4d.pdf b7378ebed8c215e0d6237537a3bc5670 PDF Text Text Strategic Sustainable Development and Creating Strategies from TOWS Matrix at Kipaş Group Imran Aslan The University of Erzincan, Turkey Business Administration Department imranaslan@gmail.com, iaslan@erzincan.edu.tr Ramazan Bozkurt The University of Erzincan, Turkey Business Administration Department rbozkurt@erzincan.edu.tr Abstract: The aim of this study is to develop new strategies for sustainable development of a group and to establish a holding from several companies by considering the regulations in the World Trade, recent developments in textile sector and raising conflicts among stakeholders. In this study, internal analysis of the group was carried out with interviews and surveys. To prepare external analysis, the economical situation of Turkey and the World was researched and categorized under standard PEST categories. Important problems were identified and then the purposes and objectives of the firm were determined by focusing on opportunities. Later, SWOT analysis of the group was prepared and most significant factors were chosen. In the light of these factors, TOWS matrix was prepared to combine external and internal factors of the enterprise in order to deploy strategies. New organization structure of the group was determined and presented based on these strategies. Introduction Kipaş Group founded 26 years ago when the Turkish textile and apparel sector initiated continuing progress by joint-venture of two families and now employs more than 4000 workers in different sectors. Kipaş Group, a leading institution within its sector and renown due to its professionalism, its expertise and its high quality standards, is a precious member of Turkish Textile Industry whereby it transformed a mere cotton yarn manufacturing plant over years into a fully-integrated textile manufacturing giant. The companies of the group which have benefited from incentives of Turkish Textile and apparel sector have been growing very rapidly. Kipaş Group has been formalized by including numerous subsidiary companies through the reorganization of the group companies since 2005. It decided to change their management structure considering the recent developments in textile sector and raising conflicts among stakeholders due to the management system of the company. The removal of quotas and Chinese effects to world textile were the focus point of researches. The effects of removal of quotas to Turkish textile were assessed with the premature indicators of Turkey's total export and import. By taking account of enormity of the group and economical situation, the group was proposed to establish a holding. Theoretical Background The regulations in World Trade oblige the national wide companies to develop new strategies for their sustainability in the market. However, companies must be aware of their internal and external environments to identify their advantages and disadvantages in order to develop strategies. Self assessment, which is a structured internal process to identify strengths and weakness for improvement is used by companies for years. (Higgins, J. M. and Vincze, J. W., 1991, p.3) Strategies for sustainable development are used to initiate change by learning and continuous adaption rather than by challenging the existent institutions. Such approach has been named as step-by-step procedure. (Volkery, 2006, p.2048) Interaction between culture, structure and technology, the approaches optimization–improvement–renewal and the parties involved are three relevant dimensions of sustainable development.( L. Jansen, 2003, p.233) The change is unavoidable to keep competitiveness in today's global market. It is important to use right methods to collect data against resistance and misunderstandings while 769 �doing changes. ( McLean, G. N. P., 2006) Deep changes occur in this era with unexpected results. (Diskienė D., et al., 2008, p.376 ) Each organization has a capability or ability initiating, managing and implementing largescale changes in organization structure to improve organization ability for a quick adaptation, flexibility and innovation. There should be a trade-off between available assets of the firm and its continuous development requirements for firm-specific capabilities. (Yan, Y. , et al., 2009, p.53) Management systems of the firm use internal and external information to gain a better strategically competitive position in the market by providing outstanding services and products. (Phelan, Steven E., 2005) Many approaches and techniques are used for strategic management processes. It is not directed just a single functional area of group. All efforts are directed toward the mission and vision of the firm to find the best for the whole group. (Houben G.,et al., 1999, p.130; Dincer O., 2004; Ketelhohn W., 2006, p.307) Strategic management requires including both short-term and long-term perspective. Both a vision for the future of the organization and a focus on its present operating needs must be taken into account. (Gregory G., et al., 2005) Strategy defines ‘Where do you want to go?’ and ‘How do you want to get there? Strategy manages the correlation between organization and changing environment. Internal and external factors effecting company are identified to form strategies. There should be a relationship between internal competences and values to firm’s external environment. (Viljoen, J. and Dann, S., 2003, p.68) There is a challenge for the firms to find the ‘fit’ what the firm does and what the environment requires. Moreover, it should be ready for the new environment that future may bring. This environment can be totally different and firm should evolve its capabilities and culture to tackle with new environment. ( Porter, et al., 2001, p.615) Managers may scan their environment and decide that there are major changes occurring in their business world to which they have to adapt. Or they might decide, through internal analysis, that they have the ability to develop a new way of doing business that will redefine the nature of the business they are in. If change is the order of the day, then two issues need to be addressed: external analysis and internal analysis. For a change of strategy to work, there must be alignment between internal capability and external opportunity. This is described as ‘strategic fit’. (Tiwana, Amrit, 1999, p.126) SWOT (Strengths-Weaknesses-Opportunities-Threats) Analysis SWOT analysis is a tool for auditing an organization and commonly used for analysing internal and external environments in order to attain a systematic approach and support for decision making. If it is used correctly, it can provide a good basis for successful strategy formulation (Hsu-Hsi C. and Wen-Chih H. , 2006). It involves the design of the organizational structure and control systems necessary to implement the chosen strategy. SWOT analysis can be conducted before mission and goal statement. (Hax, A.C. and Majluf, N.S., 1991) SWOT identifies Strengths and Weakness and examines the Opportunities and Threats of an organization. SWOT analysis suggests that firms that use their internal strengths in exploiting environmental opportunities and neutralizing environmental threats, while avoiding internal weakness, are more likely to gain competitive advantages than other kinds of firms (Jay B and William H., 2007). SWOT analysis is drawn from external and internal environments of the organization to determine the strategic vision of the firm based on the analysis of shareholders. One can think of a well developed strategic vision in terms of probing opponents’ weaknesses; withdrawing to consider how to act, given the knowledge of the opposition generated by such a probing; forcing opponents to stretch their resources; concentrating one’s own resources to attack an opponent’s exposed position; overwhelming selected markets or market segments; establishing a leadership position of dominance in certain markets; then regrouping one’s resources, deciding where to make the next thrust; then expanding from the base thus created to dominate a broader area. The leading strategy is the best strategy geared towards radical change and creating a new vision in which the firm is a leader rather than a follower of trends set by others to help managers improve organizational effectiveness and corporate profitability. (El Sawy, et al., 1988, p.455-460) The coverage of the SWOT Analysis is determined by the firm’s and competitors’ resources. Major types of resources are financial, organizational, intellectual, informational, relational, legal, human resources and resources related with reputation. The coverage can be extended for management information, supply of raw materials and production process. However, these are more specific titles. In this study, we had also the opportunity to assess the management information, however, couldn’t examined supply of raw materials and production process. The technicians of the organization could assess raw materials and production process in the project. 770 �There are several tools such as TOWS Matrix and PEST Analysis that are used in strategic management. Some of them are used as complementary to SWOT. TOWS Matrix TOWS matrix is the essential completing tool. It enhances deploying strategies systemically considering the relations between Strengths, Weakness, Opportunities, and Threats. The consequences of the internal and external factors can be replaced in a matrix called TOWS Matrix is shown in Figure 1. TOWS matrix helps to systematically identify relationships between threats, opportunities, weaknesses and strengths, and offers a structure for generating strategies on the basis of these relationships. (Weihrich, H., 1982, p-45-66) TOWS Matrix Internal Strengths(S) 1. 2. 3. Internal Weaknesses (W) 1. 2. 3. 4. External Opportunities (O) 1. 2. 3. SO External Threats (T) 1. 2. 3. ST Strategies that use strengths to maximize opportunities. WO Strategies that use strengths to minimize threats. WT Strategies that minimize weaknesses by taking advantage of opportunities. Strategies that minimize weaknesses and avoid threats Figure 1: TOWS Matrix (Weihrich, H., 1982) PEST PEST analysis, which stands for Political-Economical-Social-Technological, is another complementary tool. Social environment is another concept that must be evaluated by PEST Analysis. The external environment of any organization can be analyzed by conducting a PEST analysis. External factors usually are beyond the firm's control and sometimes present themselves as threats. For this reason, some say that "PEST" is an appropriate term for these factors. However, changes in the external environment also create new opportunities and the letters sometimes are rearranged to construct the more optimistic term of STEP analysis. The organization’s environment is made up from three factors known: � The internal environment: staff (or internal customers), office technology, wages, finance etc. � The micro - environment: the external customers, agents, distributors, suppliers, competitors etc. � The macro - environment: Social-cultural forces, Economic forces, Environmental forces, and Political (legal) forces. Macro-environment’s components are known as STEP factors. (Dyson, Robert G., 2004, p.630-641) 771 �Strategic Development and SWOT Analysis The reorganization of the group was done after internal and external analyses of the firms and observations from surveys and interviews. From internal and external analysis, SWOT Analysis of the group was carried out. The details of project were explained to every person from top management during interviews. Everything must be planned well otherwise desired changes may be resisted and not accepted by persons. It was expected from them that they evaluate the firm objectively for such a critical project. Moreover, their political considerations were also taken into account. They were employed by both families. Thus, they support the family that employed them. Every family desired to get more control over the group. SWOT Analysis of Kipaş In this part, strengths, weaknesses, opportunities and threats of Kipaş group are presented in the light of the internal analysis and external analysis. The strengths and weaknesses stem from the interviews, observations and results of questionnaire, however, the opportunities and threats are drawn out from external analysis, especially from SWOT analysis of Turkish textile & apparel industry and removal of quotas. The summary of SWOT Analysis of the group is shown in Figure 2. Figure 2: SWOT Analysis of Kipaş Group Case Study- Application of the TOWS Matrix to KIPAş Kipaş is a successful company having experienced in great difficulties, but then it has developed strategies that resulted in an excellent market position in the late 2010s. The TOWS Matrix shown in Figure 3 is focusing on the crucial period from late 2005 to 2010. The external threats and opportunities pertain mostly to the situation Kipaş faced in textile sector. Weaknesses and Threats (WT) A company with great weaknesses often has to resort to a survival strategy. Kipaş could have seriously considered the option of a joint operation with Asian firms. Another alternative would have been to make investments in Asian countries. Although in difficulties Kipaş did not have to resort to a survival strategy because the company still had much strength. Consequently, a more appropriate strategy was to attempt to overcome the weaknesses and develop them into strengths. In other words, the direction was toward the strength-opportunity position (SO) 772 �in the matrix shown as Figure 3. Specifically, the strategy is to reduce the competitive threat by developing a more flexible new R&D department to products individualized textile products . Weaknesses and Opportunities (WO) The growing affluence of customers has resulted in customized products. Yet, Kipaş have not had a special brand. Especially when considering big brands in EU such as Nike or Adidas, in long run kipaş should create a brand name for aimed markets. Kipaş has many problems with its management system due to two families desires to get more control over the group, improvements in management systems and human resource department were enable them to establish a new management style in order to take more favorable decisions more quickly. In order to minimize the additional costs of logistics, E-business and Logistics departments were opened to decrease the inventors and increase their selling capabilities. Another weakness at Kipaş was the increasing labor costs in Turkey when compared low labor cost countries in Asia. Kipaş can increase the effectiveness of production or make production in low labor cities in Turkey. 773 �Figure 3: TOWS Matrix of Kipaş Group Strengths and Threats (ST) 774 �One of the greatest threats to Kipaş was removal of quotas. To overcome this threat, the qualities of the products have been improved against cheap and unqualified Chinas’ products. To reduce the threats of removal of quotas, domestic market against china and others should be protected by decreasing textile production costs and governments should subsidize that. Moreover, Research and Development Department in domestic and foreign markets can avoid Chinese effects by producing more individualized products. Labor costs are so low in china. To meet this threat, Kipas has used its capital not only to make investments in Turkey, but also in low labor countries. This tactic which was congruent with its general strategy helped to improve the firm’s market position. Strengths and Opportunities (SO) In general, successful firms build on their strengths to take advantage of opportunities. Kipaş is no exception. Throughout this discussion Kipaş 's strengths are shown in Figure 2. These strengths have enabled the company to open a new Opening Business Development and Planning Department. Eventually the same company's strengths enabled the firm to investments in GAP region and in energy sector providing many employment opportunities. In another tactical move, Kipaş is expected to increase its market share in EU by using its experience in these markets and proximity of Turkey to EU. Organization Structure of Kipaş After wide analysis, it showed that there was a need for change and this change must be started from top. Thus, the old organization structure of the Group was changed by taking into consideration the current needs and future expectations. The SWOT Analysis and TOWS Matrix were very helpful while designing the structure. It was not only the decision of project team to change the structure but the decision of two families. Both families must agree on new structure otherwise conflicts would start again. The main characteristic of the old organization of Kipaş Group illustrated at Figure 4 was its dual headed structure. Every department and company was directly responsible to this structure and every decision must be made or approved by chairmen of the board. These decisions vary from very simple ones such as an official procurement to very extensive ones. Moreover, the single approve of a chairman was not enough to execute; both of the chairmen had to approve and sign any decision or document. There were many conflicts between families. There were two individuals, fiscal coordinator and an internal auditor, who was also directly related to chairmen. The major duty of fiscal coordinator was to assist in budget preparation and accounting support. The internal auditor was responsible for finding out any factors which conflict to benefits of the organization. These factors can be action, such as a theft, or worker, such as an insider. There were 6 functional departments in Kipaş: Finance, Procurement, IT (Information Technology), Accounting, Sales and Personal Department as shown in Figure 4. 775 �ASSEMBLY OF PARTNERS Fiscal Coordinat or Coordinat 1st CHAIRMAN CHAIRMAN BOARD 2nd BOARD FINANCE ACCOUNTING PROCUREMEN T SALES IT PERSONNEL Internal Auditor Coordina tor DEPARTMENT Bozkurt Kipaş Denim Mills Kipaş Mipsan Erdem Text. Teksan KEAŞ Pera App arel KAREN Kipaş Ginning Agri. Kipaş Insurance TOYMAR Figure 4: The old organization structure In this part, the proposed organization structure shown in Figure 5 and the factors of SWOT analysis in Figure 2 how they affected new design is explained. New organization structure of new holding is designed regarding the outputs of assessment studies. Strategies deployed from TOWS Matrix analysis in Figure 3 of Kipaş is directly used in this process. 776 �Figure 5: New Proposed Organization Structure of Holding Considering the financial and consequently political power of company, it is not so tough to venture in new sectors. Business Development and Planning is a critical directory that aims to integrate the strategic planning of the current business as well as evaluating the opportunities for the whole group to assure the sustainability of the Holding Group in international environment. Duties and responsibilities of each function were prepared. Each company has his own planning unit that deals with the operational planning which feeds the Holding with information. Yet, integrating all the operational plans is a necessity not only to improve the effectiveness of the tactical plans but also to prepare the basis for long-term strategic business plans. For example, denim production plans and Kipas textile production plans are separately prepared but exportation is handled by Vice President of External Business. Integration gives the possibility for using the spot or durable opportunities in exportation besides domestic sales. To perform business development, there is one planning engineer tracing the global business opportunities in all fields concerning Kipas Holding and informing the decision makers (President and 2 Vice Presidents). He prepares the feasibility reports before presentation. Once an opportunity is found realistic in the Board, the case is taken as a particular project to be run. Then, the Project Team is established to include the experts from the field to analyze the business in detail. This department handles the project until the project is started as: a) a new function of one of the companies b) a new company After that state, it is handled to the General Manager of the Company concerned (existing or new) to continue the operations. In fact, this function is performed by 1st Chairmen of Board. Business Development and Planning Department have significant responsibilities for enlargement in energy sector to value the new regulations and possible demand rise in this sector. The lack of human resources was considered one of the most important problems of Kipaş. Additionally, our observations resulted in a consensus on the majority of the inappropriate managers in company, especially, at the Kahramanmaraş. To compensate this drawback, a robust human resources department is proposed for company. By this department, the company can also measure the performances of the workers, this was absent at that time. 777 �Creating a brand requires hard, intensive and lots of efforts. However, if the image of brand is set down, then the company can reach very high yield. The profit margin of the company can increase with creation of this high value added product. Firstly, the creation of brand requires a vigorous marketing department that would firstly decide the appropriate promotion process and then keep the sustainability of this brand. Moreover, to improve the attributes of product and use new technologies in an innovative way, the presence of Research and Development Department is fundamental. The quality concept of brand is developed by quality departments. Being at the right point at the right time would be run by E-business and Logistics departments. EU is an important market for Kipaş and the foreign structure of Kipaş would enhance the activities in this market. Moreover, with dismiss of quotas, new markets are emerging and the new players would place to these virgin markets. The shares created in this process would be very easy but after a while, when the markets reach steady state, to penetrate these markets would not be easy. On the other, the low labor cost countries are threats in this foggy weather. However, this structure enables Kipaş differ from the companies of these countries by their service level and product quality. To evaluate these opportunities and eliminate this threat, the foreign part is strictly proposed The other threats for Kipaş are increasing customer demands and improvements in competitors. The R&D (Research and Development) and Quality Departments could be effective to eliminate these threats. The R&D department focuses on not only the products but also the process and by developing processes of production the company increases its competitiveness. Quality department works with R&D concurrently for continuous improvement. This would enable to value Kipaş’s experience in the sector and turn its knowledge assets to added value. Conclusion Noticing the reactions and rapid increasing portion of China’s in the market after removing 40 years quotas since 2005, the developed countries have been taking precautions and China respond to reactions with a little increase in tax of these sectors. Despite of these recent developments, it is impossible to turn to conditions before 2005 and the revolution in the sector initiated with new rules. Countries and companies have developed new strategies for the new game. SWOT analysis of Kipaş Group mainly focused on textile and apparel sector. TOWS Matrix helps to deploy strategies while preparing new organization chart. A new organization structure was prepared to respond to highly competitive markets. It is clear that, China and other low labor cost Asian Countries, such as India, have been gained advantage in the market. However, these regulations would undisputedly increase the competitiveness and in this environment companies would attempt to differentiate by design. Particularly in clothing, the importance of time to market would ascend dramatically. Consequently, the importance of proximity to markets such as EU and North America would intensify, which is an important advantage for both Turkey and Kipaş considering proximity to E.U. However, Turkish companies and Kipaş are obliged to concentrate on quality and supply chain activities and establish robust R&D structures to create innovative products and design in short periods to turn over these opportunities to yield. The yields of vertical growth are uncontroversial and Kipaş is a good instance of this. Kipaş had all steps of supply chain of textile from cotton apparel. However, just last step of general supply chain was neglected by Kipas that was retailing. Kipaş must concentrate on last and most value added part of chain. Creation of own brand is the most important step in this essence. In the light of the developments in EU journey of Turkey, as a strategy, Kipaş can start its retailing activities in Western Europe, more value-added markets rather than domestic market. The company has the knowledge, culture and values to implement the aforementioned strategies and proposed organizing structure. References Dincer O. (2004). Strategy Management and Organization Policy, Beta Publication, Istanbul, Turkey. Diskienė D., Galinienė, B., Marčinskas, A. (2008), A strategic management model for economic development, Technological and Economic Development of Economy, 14, pp.375–387. Dyson, Robert G.( (2004)), Strategic development and SWOT analysis at the University of Warwick, European Journal of Operational Research, pp. 631–640. 778 �El Sawy, O.A. and Pauchant, T.C. (1988), Triggers, templates, and twitches in the tracking of emerging strategic issues, Strategic Management Journal, 7(2), pp. 455-474. Gregory G., G.T. Lumpkin and Marilyn L. Taylor (2005). Strategic Management, Second Edition, McGraw-Hill Irwin, New York, USA. Houben G., Lenie K., Vanhoof K. (1999). A knowledge-based SWOT-analysis system as an instrument for strategic planning in small and medium sized enterprises, Decision Support Systems, 26, pp.125–135. Hsu-Hsi Chang (2006), Wen-Chih Huang, Application of a quantification SWOT analytical method, Mathematical and Computer Modelling, 4, pp.158-169. Hax, A.C. and Majluf, N.S. (1991). The Strategy Concept and Process: A Pragmatic Approach, Prentice-Hall, London. Jay B Barney, William Hesterly (2007), Strategic Management and Competitive Advantage: Concepts Book Description, Prentice Hall, Texas, USA. Ketelhohn W. (2006), Strategic management practice in Latin America, Journal of Business Research, 59, pp.305-309. Jansen L.(2003). The challenge of sustainable development, Journal of Cleaner Production, 11, pp.231–245 McLean, G. N. P.(2006), Organizational Development: Principles, processes performance, Berrett- Koehler Publishers, Inc., . San Francisco, USA. M. Higgins, James and W. Vincze, Julian (2001). Strategic Management, The Dryden Press International Edition,Chicago,pp.3-47. Porter, Michael E. (1981) The Contributions of Industrial Organization to Strategic Management, The Academy of Management Review, Vol. 6, No. 4., pp. 609-620. Phelan S. E (2005). Strategic Management & Policy. Available from: ttp://faculty.unlv.edu/phelan/ [Accessed 10 April 2010] Tiwana, Amrit (1999). The Knowledge Management Toolkit, Prentice Hall, First Edition, USA pp.126. Viljoen, J. & Dann, S. (2003). Strategic Management, Prentice Hall, USA, pp.68. Volkery A., Swanson D., Bregha F. and Pinter L.(2006). Coordination, Challenges, and Innovations in 19 National Sustainable Development Strategies, World Development, Vol. 34, No. 12, pp. 2047–2063 Yan, Y. , Ding, Daniel and Mak, Simon(2009), The Impact of Business Investment on Capability Exploitation and Organizational Control in International Strategic Alliances, Journal of Change Management, 9: 1, pp. 49 -65. Weihrich, H. (1982), The TOWS Matrix: A tool for situational analysis, Long Range Planning, Vol. 15 No. 2, pp.45-66. 779 � 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. 627 Title A name given to the resource Strategic Sustainable Development and Creating Strategies from TOWS Matrix at Kipas Group Author Author Aslan, Imran Bozkurt, Ramazan Abstract A summary of the resource. The aim of this study is to develop new strategies for sustainable development of a group and to establish a holding from several companies by considering the regulations in the World Trade, recent developments in textile sector and raising conflicts among stakeholders. In this study, internal analysis of the group was carried out with interviews and surveys. To prepare external analysis, the economical situation of Turkey and the World was researched and categorized under standard PEST categories. Important problems were identified and then the purposes and objectives of the firm were determined by focusing on opportunities. Later, SWOT analysis of the group was prepared and most significant factors were chosen. In the light of these factors, TOWS matrix was prepared to combine external and internal factors of the enterprise in order to deploy strategies. New organization structure of the group was determined and presented based on these strategies. 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 Q Science (General) https://omeka.ibu.edu.ba/files/original/5507980b194d510cd69827dc5c5c4b05.pdf 1024e56f946c873ff6d183d7a7ef0b08 PDF Text Text 2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Strategic Sustainable Development and Creating Strategies from TOWS Matrix at KipaĢ Group Ġmran ASLAN The University of Erzincan, Turkey Business Administration Department imranaslan@gmail.com, iaslan@erzincan.edu.tr Ramazan BOZKURT The University of Erzincan, Turkey Business Administration Department rbozkurt@erzincan.edu.tr Abstract: The aim of this study is to develop new strategies for sustainable development of a group and to establish a holding from several companies by considering the regulations in the World Trade, recent developments in textile sector and raising conflicts among stakeholders. In this study, internal analysis of the group was carried out with interviews and surveys. To prepare external analysis, the economical situation of Turkey and the World was researched and categorized under standard PEST categories. Important problems were identified and then the purposes and objectives of the firm were determined by focusing on opportunities. Later, SWOT analysis of the group was prepared and most significant factors were chosen. In the light of these factors, TOWS matrix was prepared to combine external and internal factors of the enterprise in order to deploy strategies. New organization structure of the group was determined and presented based on these strategies. Introduction KipaĢ Group founded 26 years ago when the Turkish textile and apparel sector initiated continuing progress by joint-venture of two families and now employs more than 4000 workers in different sectors. KipaĢ Group, a leading institution within its sector and renown due to its professionalism, its expertise and its high quality standards, is a precious member of Turkish Textile Industry whereby it transformed a mere cotton yarn manufacturing plant over years into a fully-integrated textile manufacturing giant. The companies of the group which have benefited from incentives of Turkish Textile and apparel sector have been growing very rapidly. KipaĢ Group has been formalized by including numerous subsidiary companies through the reorganization of the group companies since 2005. It decided to change their management structure considering the recent developments in textile sector and raising conflicts among stakeholders due to the management system of the company. The removal of quotas and Chinese effects to world textile were the focus point of researches. The effects of removal of quotas to Turkish textile were assessed with the premature indicators of Turkey's total export and import. By taking account of enormity of the group and economical situation, the group was proposed to establish a holding. Theoretical Background The regulations in World Trade oblige the national wide companies to develop new strategies for their sustainability in the market. However, companies must be aware of their internal and external environments to identify their advantages and disadvantages in order to develop strategies. Self assessment, which is a structured internal process to identify strengths and weakness for improvement is used by companies for years. (Higgins, J. M. and Vincze, J. W., 1991, p.3) Strategies for sustainable development are used to initiate change by learning and continuous adaption rather than by challenging the existent institutions. Such approach has been named as step-by-step procedure. (Volkery, 2006, p.2048) Interaction between culture, structure and technology, the approaches optimization– improvement–renewal and the parties involved are three relevant dimensions of sustainable development.( L. Jansen, 2003, p.233) The change is unavoidable to keep competitiveness in today's global market. It is important to use right 120 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo methods to collect data against resistance and misunderstandings while doing changes. ( McLean, G. N. P., 2006) Deep changes occur in this era with unexpected results. (Diskienė D., et al., 2008, p.376 ) Each organization has a capability or ability initiating, managing and implementing large-scale changes in organization structure to improve organization ability for a quick adaptation, flexibility and innovation. There should be a trade-off between available assets of the firm and its continuous development requirements for firm-specific capabilities. (Yan, Y. , et al., 2009, p.53) Management systems of the firm use internal and external information to gain a better strategically competitive position in the market by providing outstanding services and products. (Phelan, Steven E., 2005) Many approaches and techniques are used for strategic management processes. It is not directed just a single functional area of group. All efforts are directed toward the mission and vision of the firm to find the best for the whole group. (Houben G.,et al., 1999, p.130; Dincer O., 2004; Ketelhohn W., 2006, p.307) Strategic management requires including both short-term and long-term perspective. Both a vision for the future of the organization and a focus on its present operating needs must be taken into account. (Gregory G., et al., 2005) Strategy defines ‗Where do you want to go?‘ and ‗How do you want to get there? Strategy manages the correlation between organization and changing environment. Internal and external factors effecting company are identified to form strategies. There should be a relationship between internal competences and values to firm‘s external environment. (Viljoen, J. and Dann, S., 2003, p.68) There is a challenge for the firms to find the ‗fit‘ what the firm does and what the environment requires. Moreover, it should be ready for the new environment that future may bring. This environment can be totally different and firm should evolve its capabilities and culture to tackle with new environment. ( Porter, et al., 2001, p.615) Managers may scan their environment and decide that there are major changes occurring in their business world to which they have to adapt. Or they might decide, through internal analysis, that they have the ability to develop a new way of doing business that will redefine the nature of the business they are in. If change is the order of the day, then two issues need to be addressed: external analysis and internal analysis. For a change of strategy to work, there must be alignment between internal capability and external opportunity. This is described as ‗strategic fit‘. (Tiwana, Amrit, 1999, p.126) SWOT (Strengths-Weaknesses-Opportunities-Threats) Analysis SWOT analysis is a tool for auditing an organization and commonly used for analysing internal and external environments in order to attain a systematic approach and support for decision making. If it is used correctly, it can provide a good basis for successful strategy formulation (Hsu-Hsi C. and Wen-Chih H. , 2006). It involves the design of the organizational structure and control systems necessary to implement the chosen strategy. SWOT analysis can be conducted before mission and goal statement. (Hax, A.C. and Majluf, N.S., 1991) SWOT identifies Strengths and Weakness and examines the Opportunities and Threats of an organization. SWOT analysis suggests that firms that use their internal strengths in exploiting environmental opportunities and neutralizing environmental threats, while avoiding internal weakness, are more likely to gain competitive advantages than other kinds of firms (Jay B and William H., 2007). SWOT analysis is drawn from external and internal environments of the organization to determine the strategic vision of the firm based on the analysis of shareholders. One can think of a well developed strategic vision in terms of probing opponents‘ weaknesses; withdrawing to consider how to act, given the knowledge of the opposition generated by such a probing; forcing opponents to stretch their resources; concentrating one‘s own resources to attack an opponent‘s exposed position; overwhelming selected markets or market segments; establishing a leadership position of dominance in certain markets; then regrouping one‘s resources, deciding where to make the next thrust; then expanding from the base thus created to dominate a broader area. The leading strategy is the best strategy geared towards radical change and creating a new vision in which the firm is a leader rather than a follower of trends set by others to help managers improve organizational effectiveness and corporate profitability. (El Sawy, et al., 1988, p.455-460) The coverage of the SWOT Analysis is determined by the firm‘s and competitors‘ resources. Major types of resources are financial, organizational, intellectual, informational, relational, legal, human resources and resources related with reputation. The coverage can be extended for management information, supply of raw materials and production process. However, these are more specific titles. In this study, we had also the opportunity to assess the management information, however, couldn‘t examined supply of raw materials and production process. The technicians of the organization could assess raw materials and production process in the project. There are several tools such as TOWS Matrix and PEST Analysis that are used in strategic management. Some of them are used as complementary to SWOT. 121 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo TOWS Matrix TOWS matrix is the essential completing tool. It enhances deploying strategies systemically considering the relations between Strengths, Weakness, Opportunities, and Threats. The consequences of the internal and external factors can be replaced in a matrix called TOWS Matrix is shown in Figure 1. TOWS matrix helps to systematically identify relationships between threats, opportunities, weaknesses and strengths, and offers a structure for generating strategies on the basis of these relationships. (Weihrich, H., 1982, p-45-66) External Opportunities (O) 1. 2. 3. SO Strategies that use strengths to maximize opportunities. TOWS Matrix Internal Strengths(S) 1. 2. 3. Internal Weaknesses (W) 1. 2. 3. 4. External Threats (T) 1. 2. 3. ST Strategies that use strengths to minimize threats. WO WT Strategies that minimize weaknesses by taking advantage of opportunities. Strategies that minimize weaknesses and avoid threats Figure 1: TOWS Matrix (Weihrich, H., 1982) PEST PEST analysis, which stands for Political-Economical-Social-Technological, is another complementary tool. Social environment is another concept that must be evaluated by PEST Analysis. The external environment of any organization can be analyzed by conducting a PEST analysis. External factors usually are beyond the firm's control and sometimes present themselves as threats. For this reason, some say that "PEST" is an appropriate term for these factors. However, changes in the external environment also create new opportunities and the letters sometimes are rearranged to construct the more optimistic term of STEP analysis. The organization‘s environment is made up from three factors known:  The internal environment: staff (or internal customers), office technology, wages, finance etc.  The micro - environment: the external customers, agents, distributors, suppliers, competitors etc.  The macro - environment: Social-cultural forces, Economic forces, Environmental forces, and Political (legal) forces. Macro-environment‘s components are known as STEP factors. (Dyson, Robert G., 2004, p.630-641) Strategic Development and SWOT Analysis The reorganization of the group was done after internal and external analyses of the firms and observations from surveys and interviews. From internal and external analysis, SWOT Analysis of the group was carried out. The details of project were explained to every person from top management during interviews. Everything must be planned well otherwise desired changes may be resisted and not accepted by persons. It was expected from them that they evaluate the firm objectively for such a critical project. Moreover, their political considerations were also taken into account. They were employed by both families. Thus, they support the family that employed them. Every family desired to get more control over the group. SWOT Analysis of KipaĢ In this part, strengths, weaknesses, opportunities and threats of KipaĢ group are presented in the light of the internal analysis and external analysis. The strengths and weaknesses stem from the interviews, observations and results of questionnaire, however, the opportunities and threats are drawn out from external analysis, especially from 122 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo SWOT analysis of Turkish textile & apparel industry and removal of quotas. The summary of SWOT Analysis of the group is shown in Figure 2. Figure 2: SWOT Analysis of KipaĢ Group Case Study- Application of the TOWS Matrix to KIPAĢ KipaĢ is a successful company having experienced in great difficulties, but then it has developed strategies that resulted in an excellent market position in the late 2010s. The TOWS Matrix shown in Figure 3 is focusing on the crucial period from late 2005 to 2010. The external threats and opportunities pertain mostly to the situation KipaĢ faced in textile sector. Weaknesses and Threats (WT) A company with great weaknesses often has to resort to a survival strategy. KipaĢ could have seriously considered the option of a joint operation with Asian firms. Another alternative would have been to make investments in Asian countries. Although in difficulties KipaĢ did not have to resort to a survival strategy because the company still had much strength. Consequently, a more appropriate strategy was to attempt to overcome the weaknesses and develop them into strengths. In other words, the direction was toward the strength-opportunity position (SO) in the matrix shown as Figure 3. Specifically, the strategy is to reduce the competitive threat by developing a more flexible new R&D department to products individualized textile products . Weaknesses and Opportunities (WO) The growing affluence of customers has resulted in customized products. Yet, KipaĢ have not had a special brand. Especially when considering big brands in EU such as Nike or Adidas, in long run kipaĢ should create a brand name for aimed markets. KipaĢ has many problems with its management system due to two families desires to get more control over the group, improvements in management systems and human resource department were enable them to establish a new management style in order to take more favorable decisions more quickly. In order to minimize the additional costs of logistics, E-business and Logistics departments were opened to decrease the inventors and increase their selling capabilities. Another weakness at KipaĢ was the increasing labor costs in Turkey when compared low labor cost countries in Asia. KipaĢ can increase the effectiveness of production or make production in low labor cities in Turkey. 123 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Figure 3: TOWS Matrix of KipaĢ Group 124 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Strengths and Threats (ST) One of the greatest threats to KipaĢ was removal of quotas. To overcome this threat, the qualities of the products have been improved against cheap and unqualified Chinas‘ products. To reduce the threats of removal of quotas, domestic market against china and others should be protected by decreasing textile production costs and governments should subsidize that. Moreover, Research and Development Department in domestic and foreign markets can avoid Chinese effects by producing more individualized products. Labor costs are so low in china. To meet this threat, Kipas has used its capital not only to make investments in Turkey, but also in low labor countries. This tactic which was congruent with its general strategy helped to improve the firm‘s market position. Strengths and Opportunities (SO) In general, successful firms build on their strengths to take advantage of opportunities. KipaĢ is no exception. Throughout this discussion KipaĢ 's strengths are shown in Figure 2. These strengths have enabled the company to open a new Opening Business Development and Planning Department. Eventually the same company's strengths enabled the firm to investments in GAP region and in energy sector providing many employment opportunities. In another tactical move, KipaĢ is expected to increase its market share in EU by using its experience in these markets and proximity of Turkey to EU. Organization Structure of KipaĢ After wide analysis, it showed that there was a need for change and this change must be started from top. Thus, the old organization structure of the Group was changed by taking into consideration the current needs and future expectations. The SWOT Analysis and TOWS Matrix were very helpful while designing the structure. It was not only the decision of project team to change the structure but the decision of two families. Both families must agree on new structure otherwise conflicts would start again. The main characteristic of the old organization of KipaĢ Group illustrated at Figure 4 was its dual headed structure. Every department and company was directly responsible to this structure and every decision must be made or approved by chairmen of the board. These decisions vary from very simple ones such as an official procurement to very extensive ones. Moreover, the single approve of a chairman was not enough to execute; both of the chairmen had to approve and sign any decision or document. There were many conflicts between families. There were two individuals, fiscal coordinator and an internal auditor, who was also directly related to chairmen. The major duty of fiscal coordinator was to assist in budget preparation and accounting support. The internal auditor was responsible for finding out any factors which conflict to benefits of the organization. These factors can be action, such as a theft, or worker, such as an insider. There were 6 functional departments in KipaĢ: Finance, Procurement, IT (Information Technology), Accounting, Sales and Personal Department as shown in Figure 4. ASSEMBLY Fiscal Coordinat or st OF PARTNERS nd 1 CHAIRMAN 2 CHAIRMAN FINANCE BOARD Internal Auditor BOARD ACCOUNTING PROCUREMEN T IT SALES Coordinat or PERSONNEL Coordinat or DEPARTMENT Kipaş Bozkurt Pera Apparel U.K. BOZ Denim Mills Kipaş Mipsan Erdem Teksan KEAŞ Text. Figure 4: The old organization structure 125 KAREN Kipaş Kipaş Ginning Insu- Agri. rance TOYMAR �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo In this part, the proposed organization structure shown in Figure 5 and the factors of SWOT analysis in Figure 2 how they affected new design is explained. New organization structure of new holding is designed regarding the outputs of assessment studies. Strategies deployed from TOWS Matrix analysis in Figure 3 of KipaĢ is directly used in this process. Figure 5: New Proposed Organization Structure of Holding Considering the financial and consequently political power of company, it is not so tough to venture in new sectors. Business Development and Planning is a critical directory that aims to integrate the strategic planning of the current business as well as evaluating the opportunities for the whole group to assure the sustainability of the Holding Group in international environment. Duties and responsibilities of each function were prepared. Each company has his own planning unit that deals with the operational planning which feeds the Holding with information. Yet, integrating all the operational plans is a necessity not only to improve the effectiveness of the tactical plans but also to prepare the basis for long-term strategic business plans. For example, denim production plans and Kipas textile production plans are separately prepared but exportation is handled by Vice President of External Business. Integration gives the possibility for using the spot or durable opportunities in exportation besides domestic sales. To perform business development, there is one planning engineer tracing the global business opportunities in all fields concerning Kipas Holding and informing the decision makers (President and 2 Vice Presidents). He prepares the feasibility reports before presentation. Once an opportunity is found realistic in the Board, the case is taken as a particular project to be run. Then, the Project Team is established to include the experts from the field to analyze the business in detail. This department handles the project until the project is started as: a) a new function of one of the companies b) a new company After that state, it is handled to the General Manager of the Company concerned (existing or new) to continue the operations. In fact, this function is performed by 1st Chairmen of Board. Business Development and Planning Department have significant responsibilities for enlargement in energy sector to value the new regulations and possible demand rise in this sector. 126 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo The lack of human resources was considered one of the most important problems of KipaĢ. Additionally, our observations resulted in a consensus on the majority of the inappropriate managers in company, especially, at the KahramanmaraĢ. To compensate this drawback, a robust human resources department is proposed for company. By this department, the company can also measure the performances of the workers, this was absent at that time. Creating a brand requires hard, intensive and lots of efforts. However, if the image of brand is set down, then the company can reach very high yield. The profit margin of the company can increase with creation of this high value added product. Firstly, the creation of brand requires a vigorous marketing department that would firstly decide the appropriate promotion process and then keep the sustainability of this brand. Moreover, to improve the attributes of product and use new technologies in an innovative way, the presence of Research and Development Department is fundamental. The quality concept of brand is developed by quality departments. Being at the right point at the right time would be run by E-business and Logistics departments. EU is an important market for KipaĢ and the foreign structure of KipaĢ would enhance the activities in this market. Moreover, with dismiss of quotas, new markets are emerging and the new players would place to these virgin markets. The shares created in this process would be very easy but after a while, when the markets reach steady state, to penetrate these markets would not be easy. On the other, the low labor cost countries are threats in this foggy weather. However, this structure enables KipaĢ differ from the companies of these countries by their service level and product quality. To evaluate these opportunities and eliminate this threat, the foreign part is strictly proposed The other threats for KipaĢ are increasing customer demands and improvements in competitors. The R&D (Research and Development) and Quality Departments could be effective to eliminate these threats. The R&D department focuses on not only the products but also the process and by developing processes of production the company increases its competitiveness. Quality department works with R&D concurrently for continuous improvement. This would enable to value KipaĢ‘s experience in the sector and turn its knowledge assets to added value. Conclusion Noticing the reactions and rapid increasing portion of China‘s in the market after removing 40 years quotas since 2005, the developed countries have been taking precautions and China respond to reactions with a little increase in tax of these sectors. Despite of these recent developments, it is impossible to turn to conditions before 2005 and the revolution in the sector initiated with new rules. Countries and companies have developed new strategies for the new game. SWOT analysis of KipaĢ Group mainly focused on textile and apparel sector. TOWS Matrix helps to deploy strategies while preparing new organization chart. A new organization structure was prepared to respond to highly competitive markets. It is clear that, China and other low labor cost Asian Countries, such as India, have been gained advantage in the market. However, these regulations would undisputedly increase the competitiveness and in this environment companies would attempt to differentiate by design. Particularly in clothing, the importance of time to market would ascend dramatically. Consequently, the importance of proximity to markets such as EU and North America would intensify, which is an important advantage for both Turkey and KipaĢ considering proximity to E.U. However, Turkish companies and KipaĢ are obliged to concentrate on quality and supply chain activities and establish robust R&D structures to create innovative products and design in short periods to turn over these opportunities to yield. The yields of vertical growth are uncontroversial and KipaĢ is a good instance of this. KipaĢ had all steps of supply chain of textile from cotton apparel. However, just last step of general supply chain was neglected by Kipas that was retailing. KipaĢ must concentrate on last and most value added part of chain. Creation of own brand is the most important step in this essence. In the light of the developments in EU journey of Turkey, as a strategy, KipaĢ can start its retailing activities in Western Europe, more value-added markets rather than domestic market. The company has the knowledge, culture and values to implement the aforementioned strategies and proposed organizing structure. References Dincer O. (2004). Strategy Management and Organization Policy, Beta Publication, Istanbul, Turkey. Diskienė D., Galinienė, B., Marčinskas, A. (2008), A strategic management model for economic development, Technological and Economic Development of Economy, 14, pp.375–387. 127 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Dyson, Robert G.( (2004)), Strategic development and SWOT analysis at the University of Warwick, European Journal of Operational Research, pp. 631–640. El Sawy, O.A. and Pauchant, T.C. (1988), Triggers, templates, and twitches in the tracking of emerging strategic issues, Strategic Management Journal, 7(2), pp. 455-474. Gregory G., G.T. Lumpkin and Marilyn L. Taylor (2005). Strategic Management, Second Edition, McGraw-Hill Irwin, New York, USA. Houben G., Lenie K., Vanhoof K. (1999). A knowledge-based SWOT-analysis system as an instrument for strategic planning in small and medium sized enterprises, Decision Support Systems, 26, pp.125–135. Hsu-Hsi Chang (2006), Wen-Chih Huang, Application of a quantification SWOT analytical method, Mathematical and Computer Modelling, 4, pp.158-169. Hax, A.C. and Majluf, N.S. (1991). The Strategy Concept and Process: A Pragmatic Approach, Prentice-Hall, London. Jay B Barney, William Hesterly (2007), Strategic Management and Competitive Advantage: Concepts Book Description, Prentice Hall, Texas, USA. Ketelhohn W. (2006), Strategic management practice in Latin America, Journal of Business Research, 59, pp.305-309 Jansen L.(2003). The challenge of sustainable development, Journal of Cleaner Production, 11, pp.231–245 McLean, G. N. P.(2006), Organizational Development: Principles, processes performance, Berrett- Koehler Publishers, Inc., . San Francisco, USA. M. Higgins, James and W. Vincze, Julian (2001). Strategic Management, The Dryden Press International Edition,Chicago,pp.347. Porter, Michael E. (1981) The Contributions of Industrial Organization to Strategic Management, The Academy of Management Review, Vol. 6, No. 4., pp. 609-620. Phelan S. E (2005). Strategic Management & Policy. Available from: ttp://faculty.unlv.edu/phelan/ [Accessed 10 April 2010] Tiwana, Amrit (1999). The Knowledge Management Toolkit, Prentice Hall, First Edition, USA pp.126. Viljoen, J. & Dann, S. (2003). Strategic Management, Prentice Hall, USA, pp.68. Volkery A., Swanson D., Bregha F. and Pinter L.(2006). Coordination, Challenges, and Innovations in 19 National Sustainable Development Strategies, World Development, Vol. 34, No. 12, pp. 2047–2063 Yan, Y. , Ding, Daniel and Mak, Simon(2009), The Impact of Business Investment on Capability Exploitation and Organizational Control in International Strategic Alliances, Journal of Change Management, 9: 1, pp. 49 -65. Weihrich, H. (1982), The TOWS Matrix: A tool for situational analysis, Long Range Planning, Vol. 15 No. 2, pp.45-66. 128 � 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. 197 Title A name given to the resource Strategic Sustainable Development and Creating Strategies from TOWS Matrix at KipaĢ Group Author Author ASLAN, İmran BOZKURT, Ramazan Abstract A summary of the resource. The aim of this study is to develop new strategies for sustainable development of a group and to establish a holding from several companies by considering the regulations in the World Trade, recent developments in textile sector and raising conflicts among stakeholders. In this study, internal analysis of the group was carried out with interviews and surveys. To prepare external analysis, the economical situation of Turkey and the World was researched and categorized under standard PEST categories. Important problems were identified and then the purposes and objectives of the firm were determined by focusing on opportunities. Later, SWOT analysis of the group was prepared and most significant factors were chosen. In the light of these factors, TOWS matrix was prepared to combine external and internal factors of the enterprise in order to deploy strategies. New organization structure of the group was determined and presented based on these strategies. 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/ea16ec50f63d4ba358b69e5a3771b49a.pdf 328c9afa7d71530989109946b9531310 PDF Text Text Journal of Foreign Language Teaching and Applied Linguistics Strategies for appropriate and helpful teacher response to stressful situations caused by disruptive students in the classroom Azra Jakupi, Neda Radosavlevikj & Milica Matoska South East European University, Macedonia Submitted: 16.04.2014. Accepted: 01.11.2014. Abstract Whether you have been teaching for 20 years or have just started your teaching career, there’s always a possibility you will have a student in your classroom with disruptive behavior. This behavior can go beyond the limits of what is considered to be acceptable in a learning environment. An obvious example of disruptive behavior is when the student verbally attacks, is late for class, experiences angry outbursts, social problems, etc. or simply rebels against something that is happening beyond the classroom door. However, very rarely are we, as teachers, aware of the possibility that the student might be having a mental health crisis. We, the Language Centre at South East European University, have encountered various stressful situations, while at the same time we struggle for balance and try to find appropriate responses for students’ complaints about grades, “unfair” treatment, the policy of the faculty, etc. In an effort to resolve this dilemma, we will conduct research within the Language Centre through interviews with the academic and administrative staff as well as the students and their supervisors. In our presentation, we will present several strategies to deal with stressful situations that affect the entire learning environment, including the teachers themselves, such as: defining the problem, the reason behind it, the time of occurrence, its impact, introducing meta-communication and early communication by setting early expectations, ways to stay calm when responding to a crisis event and setting limits. We will also explore basic principles related to classroom management and a variety of strategies for early intervention in order to create a dynamic learning environment that promotes learning safety. Keywords: Disruptive behaviour, strategies, safe learning environment Introduction 33 �Strategies for appropriate and helpful teacher response to stressful situations caused by disruptive students in the classroom Students’ disruptive behavior may be resolved by selecting effective classroommanagement strategies. One of the best management strategies is to prevent disruptions before they occur. In this paper we will discuss effective strategies applied at the Language Centre at South East European University for creating and sustaining a dynamic learning environment, as well as effective methods that we as teachers find appropriate for early intervention and how we deal with these problems when they occur. The idea for this study emerged from the stressful situations that teachers were exposed to, always struggling for balance as we seek appropriate strategies to answer to students’ problems such as “complaints about grades”, “unfair treatment” and other difficulties. Language Centre teachers use different management strategies to deal with disruptive behavior, some of which are not very effective. The aim of this research is to investigate the effective management strategies that teachers at the Language Centre use and what they do when a student’s behavior disrupts their classes. Furthermore, the research investigates teachers’ reactions towards the success or the failure of their methods as well as the most frequent types of disruptive behavior and the reasons that students engage in such behavior. Discipline problems are listed as the major concern for most new teachers. What can teachers expect and how can they handle disciplinary problems effectively? The key is classroom management combined with an effective discipline plan. This step-by-step look at classroom discipline will help you see some important steps in dealing with discipline problems that may arise in your classroom. Here is a list of strategies for responding to stressful situations caused by disruptive students in the classroom: 1. Begin each class period with a positive attitude and high expectations. If you expect your students to misbehave or you approach them negatively, you will get misbehavior. This is an often overlooked aspect of classroom management. 2. Come to class prepared with lessons for the day. In fact, over-plan your lessons. Make sure you have all your materials and methods ready to go. Reducing downtime will help maintain discipline in your classroom. 3. Work on making smooth transitions between lesson segments. In other words, as you move from group discussion to independent work, try to minimize disruption to the class. Have your papers ready to go or your assignment already written on the board. Disruptions frequently occur during lesson transitions. Watch your students as they come into class. Look for signs of possible problems before class even begins. For example, if you notice a heated 34 �Journal of Foreign Language Teaching and Applied Linguistics discussion or problem before class starts, try to deal with the problem there and then. Allow the students a few moments to talk with you or with each other before you start your lesson to try and work things out. Separate them if necessary and try to get them to agree to drop whatever issue they have during your class. Have a posted discipline plan that you follow consistently for effective classroom management. This should ensure that students will receive a warning or two before punishment begins, depending on the severity of the offense. Your plan should be easy to follow and also should cause a minimum of disruption in your class. For example, your discipline plan might be - First Offense: Verbal Warning, Second Offense: Detention with teacher, Third Offense: Referral. Meet disruptions that arise in your class with in kind measures. In other words, don't elevate disruptions above their current level. Your discipline plan should provide for this; however, sometimes your own personal issues can get in the way. For example, if two students are talking in the back of the room and your first step in the plan is to give your students a verbal warning, don't stop your instruction to begin yelling at the students. Instead, have a set policy that simply saying a student's name is enough of a clue for them to get back on task. Another technique is to ask one of them a question. Try to use humor to defuse situations before things get out of hand. Note: Know your students. The following example would be used with students whom you know will not escalate the situation: If you tell the class to open their books to page 51 and three students are busy talking, do not immediately yell at them. Instead, smile, say their names, and ask them kindly if they could please wait until later to finish their conversation because you would really like to hear how it ends and you have to get this class finished. This will probably get a few laughs and also get your point across. If a student becomes verbally confrontational with you, remain calm and remove them from the situation as quickly as possible. Do not get into yelling matches with your students. There will always be a winner and a loser which sets up a power struggle that could continue throughout the year. Further, do not bring the rest of the class into the situation by involving them in the discipline or the writing of the referral. If a student becomes physical, remember the safety of the other students is paramount. Remain as calm as possible; your demeanor can sometimes defuse the situation. You should have a plan for dealing with violence that you discuss with students early in the year. You should use the call button for assistance. You could also designate a student to get help from another teacher. Send the other students from the room if it appears they could get hurt. If the fight is 35 �Strategies for appropriate and helpful teacher response to stressful situations caused by disruptive students in the classroom between two students, follow your school's rules on teacher involvement, as many want teachers to stay out of fights until help arrives. Keep an anecdotal record of major issues that arise in your class. This might be necessary if you are asked for a history of classroom disruptions or other documentation. Let it go at the end of the day. Classroom management and disruption issues should be left in class so that you can have some down time to recharge before coming back to another day of teaching. Analysis and Evidence/Findings In order to find out about teachers’ and students’ views on disruptive behaviors and how to deal with such situations, we constructed two surveys. One was teacherspecific and the other was student-oriented. We asked both groups the same questions. The findings from the student-oriented survey are as follows: 1. Both female and male students generally think (98%) that the overall atmosphere in the classroom is positive. 2. 25% of the male students think that discipline is not important and that the current disciplinary methods are utterly inefficient and 20% of female students think that the rules of conduct should be more flexible. 3. The male students (5%) state that the teachers are unable to manage the classroom and deal with undisciplined students, while the female students (2%) think it is due to the lack of a psychologist at the university. 4. 90% of students from both genders think that, in order to deal with disruptive behaviors, teachers should increase students’ obligations. While female students (50%) do not hold teachers responsible for disruptive behaviors, saying they cannot possibly know and be responsible for ‘everything’ in the classroom, the male students (90%) state the opposite. 5. 15% of female and male students think that the students should be involved in designing the curriculum and 90% of them think that students should be involved in setting the rules of conduct. In conclusion, generally speaking, male students place greater responsibility on the teachers; question their competence to manage the classroom and emphasize the importance of the students’ role. On the other hand, female students emphasize the students’ responsibility to control their own behavior. Both groups agree that there should be a co-operation between teachers and students in order to improve and eliminate disruptive behavior. While female students think that behavior is more important than students’ inner thoughts and feelings, male students state the opposite. 36 �Journal of Foreign Language Teaching and Applied Linguistics The findings from the teacher specific survey were the following: 1. Both female and male teachers (98%) describe the overall classroom atmosphere as positive. 2. All teachers agree that discipline is very important. 5% of teachers think disciplinary methods are utterly inefficient and recommend penalties. 3. All teachers agree that they are responsible for shaping the desired behavior in the classroom; it is their responsibility to design the curriculum and to motivate and engage the students. Moreover, they all agree that they cannot possibly be responsible for ‘everything’ in the classroom. 4. 99% of the teachers think that students can control their behavior, but that they should take their students’ needs into consideration. 5. 100% of the female and 50% of the male teachers think that students’ inner thoughts and feelings are more important than their evident behavior. The teachers reject the notion that they could ‘know everything’ in the classroom at all times. However, they emphasize their own responsibility for managing the classroom and dealing with disruptive behavior (5% of them suggest the introduction of penalization is an efficient method). All of the teachers agree that they should have background knowledge when dealing with infractions. Although the students can control their own behavior, the teachers agree that it is their responsibility to motivate the students, get their co-operation and create a positive atmosphere. The teachers must decide what the students will learn, but they should take the students’ needs into consideration. While the male teachers think that students’ inner thoughts and feelings are less important than their evident behavior, 100% of the female teachers state the opposite. Literature review Reasons for and types of disruptive behavior There is no specific definition for disruptive behavior since the definition differs according to its relevance to the specific case of each study (Arbuckle & Little, 2004). Nevertheless, many studies identify some types such as self-reported data from schoolteachers that help identify types of the most frequent disruptive behaviors. Ranking which behavior is more frequent differs in Western and Eastern cultures. In China, some studies report that “day dreaming (also called non-attention and off task) behavior” is the most frequent disruptive behavior in some of their schools (Ding, Li, Li, & Kulm, 2008; Shen et al., 2009). Other studies report that “talking out of turn” is the most frequent disruptive behavior in some schools in England (Arbuckle & Little, 2004) and Australia (Ross, Little, Kienhuis, 2008). 37 �Strategies for appropriate and helpful teacher response to stressful situations caused by disruptive students in the classroom Teachers and students have different perceptions of the reasons behind disruptive behavior. Some students view disruptive behavior as a result of bad teaching skills. Other students mention that they use this behavior to deal with their problems against the whole school system; in other words, they choose to act against teachers’ power in order to assert their own power (Verkuyten 2002). On the other hand, some schoolteachers believe that some students use disruptive behavior as a way of rejecting work and drawing attention to themselves. They also think students use such behavior to defy teachers’ power (Axup & Gersch, 2008; Shumate & Wills, 2010). Further, other teachers mention that students may practice disruptive behavior to establish an identity in order to belong to a “peer group” (Axup & Gersch, 2008). Sometimes the injustice of teachers and the vulnerability of students can be the main causes of disruptive behavior (Miller, Ferguson and Byrne, 2000). The relation between disruptive behavior and the learning and teaching process Inappropriate behavior impacts learning and teaching. It wastes classroom time, distracts students from learning and teachers from teaching, lessens students’ motivation and causes stress for students and teachers (Charles and Senter cited in Ding et al., 2008). Many studies have investigated the stressors that lead to teachers’ burnout and annoyance, which could hinder the teaching process. In a study done on 1,386 secondary teachers working in Spanish schools, disruptive behavior was identified as a major source of teachers’ stress and annoyance (López et al., 2008). Furthermore, students’ disruptive behaviors can provoke negative feelings in teachers such as frustration and lack of confidence. As a result, teachers become too stressed to make the right decisions (Arbuckle & Little , 2004; Ross et al., 2008; Thompson & Webber, 2008). For instance, teachers sometimes give up on disruptive students, remove them from their classes and let others deal with them (Egyed and Short, 2006). What is more, some teachers, especially inexperienced ones, decide to quit teaching and change their careers (Ross et al., 2008;Tsouloupas et al., 2010). Teachers’ selection of management strategies and disruptive behaviors Some teachers do not always realize that they are repeatedly using ineffective management strategies in order to handle disruptive behaviors in their classes. Before deciding which management strategies to apply, teachers could first try to understand why students are practicing this kind of behavior (Stoughton, 2006). Recognizing how disruptive students think can help teachers decide on which management strategies to apply in order to deal with disruptive students (Ding et al., 2008). Furthermore, it is advisable for some teachers to realize that if they want to reduce 38 �Journal of Foreign Language Teaching and Applied Linguistics disruptive behaviors, they have to abandon their authoritative identity and maintain a strong relationship with their students (Lee and Powell, 2006). Some teachers lack knowledge of the kind of management strategies that they need to select in order to handle disruptive behavior. Therefore, it is always important to provide teachers with the necessary consultation on this kind of information (Egyed & Short, 2006; Thompson & Webber, 2010). Consultation can help teachers feel more capable of and knowledgeable about handling disruptive behaviors. This may also help increase teachers’ confidence and reduce their stress (Egyed & Short, 2006; Reinke, Palmer & Merrell, 2008). Effective management strategies can help reduce disruptive behaviors and improve the learning process (Reinke et al., 2008). Some teachers believe that positive management strategies such as praise and engaging students in decision-making are the best management strategies for handling students’ disruptive behaviors. Other teachers believe that negative management strategies such as punishment and reprimands are more effective than the positive ones. Some studies show that teachers who lack patience, confidence and the necessary consultation skills tend to use more negative management strategies to control disruptive behavior (Axup & Gersch, 2008). On the other hand, some studies show that students’ disruptive behaviors decrease when teachers apply positive management strategies and avoid using the negative ones (Reinke et al., 2008). Applying positive management strategies to classrooms is also found beneficial as it increases on-task behavior and enhances students’ learning identity (Arbuckle & Little, 2004; Lee & Powell, 2005; Ross et al, 2008). Most studies that investigated teachers’ perceptions of effective classroommanagement strategies and students’ disruptive behaviors used either questionnaires or surveys in collecting the necessary data. In spite of the limitations of these methods, they remain the most frequent methods of reflecting teachers’ real practices in classrooms (Ross et al., 2008). For this reason one of these methods, a questionnaire, was used as the method of collecting data in this small-scale study. Conclusions Every teacher should have a set of tips for managing teacher burnout and effectively deal with unforeseen disruptive situations. Here are some tips to get you started: 1. Recognize the warning signs of disruption. Obviously this comes with practice of classroom management. However, some signs are fairly obvious. 2. Sarcasm should be used sparingly if at all. If you do use it, make sure you know the student who you are using it with well. Many students do not have the capacity to know that sarcasm is not meant to be taken literally. Further, other 39 �Strategies for appropriate and helpful teacher response to stressful situations caused by disruptive students in the classroom students could find your sarcasm as inflammatory, which would defeat your purpose of greater classroom management. 3. Consistency and fairness are essential for effective classroom management. If you ignore disruptions one day and come down hard on them the next, you will not be seen as consistent. You will lose respect and disruptions will probably increase. Further, if you are not fair in your punishments, making sure to treat all students fairly then students will quickly realize this and lose respect for you. You should also start each day fresh, not holding disruptions against students and instead expecting them to behave. 4. It's easier to get easier. Start the year very strict so that students see that you are willing to do what it takes to have your classroom under control. They will understand that you expect learning to occur in your room. You can always let up as the year goes on. 5. Classroom rules must be easy to understand and manageable. Make sure that you don't have such a large number of rules that your students can't consistently follow them. Appendix Questionnaire for the Teachers Please mark (a) Male (b) Female, Teaching Experience: (a) 0 (b) 1-5 yrs. (c) 6- 10 yrs (d) 11 - 15 yrs. (e) 16+ yrs. Degree Earned : (a) BA (b) Master's (c) EdS (d) Doctorate (e) Undergraduate Directions: On the following scale how much do you agree with the following statement? 1. How would you describe the overall atmosphere in the classroom? 1-very negative 2- barely positive 3- somewhat positive 4- mostly positive 5- very positive 2. It is important for students to be disciplined. (Circle one) 1-strongly agree 2- agree 3-neither agree nor disagree 4-disagree 5strongly disagree 3. How efficient do you think the discipline strategies are right now? (Circle one) 1-very efficient 2- efficient 3-neither efficient nor inefficient 4-inefficient 5-very inefficient 4. If you could change one thing about the behavior management in the school what would it be? Please specify. 40 �Journal of Foreign Language Teaching and Applied Linguistics Directions: Please read the following carefully and select one answer from the scale below. SA=Strongly Agree A = Agree N = Neither Agree nor Disagree D = Disagree SD-Strongly Disagree 1. Teachers must have knowledge of group dynamics. SA A N D SD 2. Teachers need to have background information when dealing with rule infractions. SA A N D SD 3. Teachers are responsible for knowing everything that goes on in the classroom at all times. SA A N D SD 4. Teachers should create a "democratic” classroom. SA A N D SD 5. Teachers should “invite” student cooperation. SA A N D SD 6. Teachers are responsible for "shaping" desired behavior in the classroom. SA A N D SD 7. Teachers must take student needs into consideration. SA A N D SD 8. Teachers are responsible for controlling the behavior of their students. SA A N D SD 9. Students are able to control their behavior. SA A N D SD 41 �Strategies for appropriate and helpful teacher response to stressful situations caused by disruptive students in the classroom 10. Conflict resolution should be employed in the school setting. SA A N D SD 11. Teachers must deal with all students in the same manner when using disciplinary measures. SA A N D SD 12. A "sense of belonging" needs to be created by the teacher within the classroom setting. SA A N D SD 13. Rules of conduct must be set by the teachers. SA A N D SD 14. What students must learn and the tasks to be performed must be determined by the teacher. And, a specific sequence of instruction to accomplish these goals must be followed. SA A N D SD 15. If a student disrupts class, I would ignore the disruption if possible and/or remove the student to the back of the room as a consequence for his/her behavior. SA A N D SD 16. If a student disrupts class, I would express discomfort to the student about being disrupted from my task and then continue on with the lesson. SA A N D SD 17. Rules are never written "in stone," and can be renegotiated by the class; consequences will vary with students. SA A N D SD 18. Teachers should intervene quickly when misbehavior occurs. SA A N D SD 19. Inner thoughts and feelings of students are more important than evident behavior. SA A N D SD 20. Student autonomy is very important in the classroom. SA A N D SD 42 �Journal of Foreign Language Teaching and Applied Linguistics 21. Extrinsic “rewards” may decrease intrinsic motivation. SA A N D SD Questionnaire for the Students a. Gender (check a box) ___ Female ___Male b. Age____________ Ethnicity _________________ d. Faculty ____________________ c. Directions: On the following scale how much do you agree with the following statement? 1. How would you describe the overall atmosphere in the classroom? 1-very negative 2- barely positive 3- somewhat positive 4- mostly positive 5- very positive 2. It is important for students to be disciplined. (Circle one) 1-strongly agree 2- agree 3-neither agree nor disagree 4-disagree 5strongly disagree 3. How efficient do you think the discipline strategies are right now? (Circle one) 1-very efficient 2- efficient 3-neither efficient nor inefficient 4-inefficient 5-very inefficient 4. If you were a teacher and you could change one thing about the behavior management in the school what would it be? Please specify. Directions: Please read the following carefully and select one answer from the scale below. SA=Strongly Agree A = Agree N = Neither Agree nor Disagree D = Disagree SD-Strongly Disagree 1. Teachers must have knowledge of group dynamics. SA A N D SD 43 �Strategies for appropriate and helpful teacher response to stressful situations caused by disruptive students in the classroom 2. Teachers need to have background information when dealing with rule infractions. SA A N D SD 3. Teachers are responsible for knowing everything that goes on in the classroom at all times. SA A N D SD 4. Teachers should create a "democratic” classroom. SA A N D SD 5. Teachers should “invite” student cooperation. SA A N D SD 6. Teachers are responsible for "shaping" desired behavior in the classroom. SA A N D SD 7. Teachers must take student needs into consideration. SA A N D SD 8. Teachers are responsible for controlling the behavior of their students. SA A N D SD 9. Students are able to control their behavior. SA A N D SD 10. Conflict resolution should be employed in the school setting. SA A N D SD 11. Teachers must deal with all students in the same manner when using disciplinary measures. SA A N D SD 12. A "sense of belonging" needs to be created by the teacher within the classroom setting. SA A N D SD 13. Rules of conduct must be set by the teachers. SA A N D SD 44 �Journal of Foreign Language Teaching and Applied Linguistics 14. What students must learn and the tasks to be performed must be determined by the teacher. And, a specific sequence of instruction to accomplish these goals must be followed. SA A N D SD 15. If I were a teacher, if a student disrupted my class, I would ignore the disruption if possible and/or remove the student to the back of the room as a consequence for his/her behavior. SA A N D SD 16. If I were a teacher, if a student disrupted my class, I would express discomfort to the student about being disrupted from my task and then continue on with the lesson. SA A N D SD 17. Rules are never written "in stone," and can be renegotiated by the class; consequences will vary with students. SA A N D SD 18. Teachers should intervene quickly when misbehavior occurs. SA A N D SD 19. Inner thoughts and feelings of students are more important than evident behavior. SA A N D SD 20. Student autonomy is very important in the classroom. SA A N D SD 21. Extrinsic (external) “rewards” may decrease intrinsic (internal) motivation. SA A N D SD 45 �Strategies for appropriate and helpful teacher response to stressful situations caused by disruptive students in the classroom References Arbuckle,C., & Little, E. (2004). Teachers’ perceptions and management of disruptive classroom behavior during the middle years. Australian Journal of Educational & Developmental Psychology, 4, 59-70. Axup, T.,& Gersch, I. (2008). The impact of challenging student behavior upon teachers’ lives in a secondary school: teachers’ perceptions. British Journal of Special Education, 35(3), 144-151. Ding, M., Li, Y., Li, X., & Kulm, G. (2008). Chinese teachers’ perceptions of students’classroom misbehavior.Educational Psychology, 28(3), 305-324. Egyed,C. J., Short, R. J. (2006). Teacher self-efficacy, burnout, experience and decision to refer a disruptive student. School Psychology International, 27(4), 462-474. Lee, S., Powell,J. V. (2005). Using computer-based technology to determine emergent classroom discipline styles in preservice teacher education. Educational Technology Systems,34(1). López, J. M., Santiago, M. J., Godás, A., Castro, C., Villardefrancos, E., & Ponte, D. (2008). An integrative approach to burnout in secondary school teachers: examining the role of student disruptive behavior and disciplinary issues. International Journal of Psychology and Psychological Therapy, 8(2), 85-96. Reinke, W. M., Palmer, T., & Merrell, K. (2008). The classroom check-up: A classwide teacher consultation model for increasing praise and decreasing disruptive behavior. School Psych Rev., 37(3), 315–332. Ross, P., Little, E, & Kienhuis, M. (2008). Self-reported and actual use of proactive and reactive classroom management strategies and relationship with teacher stress and student behavior. Educational Psychology, 28(6), 693–710. Shen, J., Zhang, N., Zhang, C., Caldarella, P., Richardson, M. J., & Shatzer, R. H. (2009). Chinese elementary school teachers’ perceptions of students’ classroom behavior problems. Educational Psychology, 29(2), 187-201. 46 �Journal of Foreign Language Teaching and Applied Linguistics Shumate, E. D., & Wills, H. P. (2010). Classroom-based functional analysis and intervention for disruptive and off-task behaviors. Education and Treatment of Children, 33(1), 23-48. Stoughton, E. H. (2006). ‘‘How will I get them to behave?’’: Pre service teachers reflect on classroom management.Teaching and Teacher Education, 23, 1024-1037. Thompson,A. M., & Webber, K. C. (2010). Realigning student and teacher perceptions of school rules: A behavior management strategy for students with challenging behaviors. Children &Schools, 32(2), 71-79. Tsouloupas, C. N., Carson, R. L., Matthew, R., Grawitch, M. J., & Barber, L. K. (2010). Exploring the association between teachers’ perceived student misbehaviour and emotional exhaustion: the importance of teacher efficacy beliefs and emotion regulation. Educational Psychology, 30(2). Verkuyten,M.(2002). Making teachers accountable for students' disruptive classroom behavior. British Journal of Sociology of Education, 23(1), 107122. 47 � 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. 2805 Title A name given to the resource Strategies for appropriate and helpful teacher response to stressful situations caused by disruptive students in the classroom Author Author Jakupi, Azra Radosavlevikj, Neda Matoska, Milica Abstract A summary of the resource. Whether you have been teaching for 20 years or have just started your teaching career, there’s always a possibility you will have a student in your classroom with disruptive behavior. This behavior can go beyond the limits of what is considered to be acceptable in a learning environment. An obvious example of disruptive behavior is when the student verbally attacks, is late for class, experiences angry outbursts, social problems, etc. or simply rebels against something that is happening beyond the classroom door. However, very rarely are we, as teachers, aware of the possibility that the student might be having a mental health crisis. We, the Language Centre at South East European University, have encountered various stressful situations, while at the same time we struggle for balance and try to find appropriate responses for students’ complaints about grades, “unfair” treatment, the policy of the faculty, etc. In an effort to resolve this dilemma, we will conduct research within the Language Centre through interviews with the academic and administrative staff as well as the students and their supervisors. In our presentation, we will present several strategies to deal with stressful situations that affect the entire learning environment, including the teachers themselves, such as: defining the problem, the reason behind it, the time of occurrence, its impact, introducing meta-communication and early communication by setting early expectations, ways to stay calm when responding to a crisis event and setting limits. We will also explore basic principles related to classroom management and a variety of strategies for early intervention in order to create a dynamic learning environment that promotes learning safety. Keywords: Disruptive behaviour, strategies, safe learning environment Date A point or period of time associated with an event in the lifecycle of the resource 2015-04-16 Keywords Keywords. Article PeerReviewed L Education (General),LF Individual institutions (Europe),P Philology. Linguistics,PE English 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. 3374 Title A name given to the resource STRATEGIES FOR APPROPRIATE AND HELPFUL TEACHER RESPONSE TO STRESSFUL SITUATIONS CAUSED BY DISRUPTIVE STUDENTS IN THE CLASSROOM Author Author Jakupi, Azra Radosavlevikj, Neda Matoska, Milica Abstract A summary of the resource. Whether you have been teaching for 20 years or you have just started your teaching career, there’s always a possibility you will have a student in your classroom with disruptive behavior. This behavior can go beyond the limits of what is considered to be acceptable in a learning environment. An obvious disruptive behavior is when the student verbally attacks, is late for class, experiences angry outbursts, social problems, etc. or simply rebels against something which is happening beyond the classroom door. However, very rarely are we, as teachers, aware of the possibility that the student might be having a mental health crisis. We, the Language Center within South East European University, have been encountering various stressful situations, while at the same time we are struggling for balance and finding an appropriate response for students’ complaints about grades, “unfair” treatment, the policy of the faculty, etc. Hence, the research will be done within the Language Center through interviews with the academic and administrative staff and the students as well as their supervision. In our presentation, the objectives are to present several strategies to deal with stressful situations which affect the entire learning environment, including the teacher him/herself, such as: defining the problem, the reason behind it, the time of occurrence, its impact, introducing metacommunication and early communication by setting early expectations, ways to stay calm when responding to a crisis event and setting limits. We will also explore basic principles related to classroom management and a variety of strategies for early intervention in order to create a dynamic learning environment that promotes learning safety. Date A point or period of time associated with an event in the lifecycle of the resource 2014 Keywords Keywords. Conference or Workshop Item PeerReviewed PE English https://omeka.ibu.edu.ba/files/original/c8d6caeb6db5d2be417bde1f04f6062b.pdf 27ce9e2e138625a278a7ccc366bb3772 PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo Strategies for Curbing Unemployment in Bosnia and Herzegovina: Lessons from Ireland and Netherlands Azra Bičo International University of Sarajevo, Sarajevo, Bosnia and Herzegovina azrabico@hotmail.com Narela Bajram International University of Sarajevo, Sarajevo, Bosnia and Herzegovina narela7@yahoo.com Over the past three decades European countries have been coping with problems of high unemployment, and they need rigid labor market improvements. Countries tried to find strategies to decrease unemployment by using different methods, such as wage moderation, income tax cuts, tightening of unemployment benefits, reduction in barriers to part time work, and education programs. This paper examines methods which have been proven to be successful in Ireland and Netherlands. By looking at its implications it tries to give strategic solutions to countries as Bosnia and Herzegovina, since it is coping with the same problem. This paper analyzes problems of unemployment with special focus on the youth unemployment in Bosnia and Herzegovina. Keywords: Strategy, Curbing, Unemployment, Ireland, Netherland, Bosnia and Herzegovina 50 � 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. 1500 Title A name given to the resource Strategies for Curbing Unemployment in Bosnia and Herzegovina: Lessons from Ireland and Netherlands Author Author BIČO, Azra BAJRAM, Narela Abstract A summary of the resource. Over the past three decades European countries have been coping with problems of high unemployment, and they need rigid labor market improvements. Countries tried to find strategies to decrease unemployment by using different methods, such as wage moderation, income tax cuts, tightening of unemployment benefits, reduction in barriers to part time work, and education programs. This paper examines methods which have been proven to be successful in Ireland and Netherlands. By looking at its implications it tries to give strategic solutions to countries as Bosnia and Herzegovina, since it is coping with the same problem. This paper analyzes problems of unemployment with special focus on the youth unemployment in Bosnia and Herzegovina. Keywords: Strategy, Curbing, Unemployment, Ireland, Netherland, 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 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564