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                <text>THE ROLE OF INSTITUTIONS IN TRANSITION ECONOMICS: A DEEPER LOOK AT THE RELATIONSHIP BETWEEN PRIVATIZATION AND ECONOMIC GROWTH IN BOSNIA AND HERZEGOVINA</text>
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                <text>The field of Institutional Economics is about the theoretical and empirical findings that have a major role in today’s understanding of institutions. The relationship between the institutions and Economic growth is confirmed by the literature. The objective of this study is to present the current situation of government institutions and economic situation in Bosnia and Herzegovina. This paper begins with the principles and explanations of the theoretical aspects of old and new institutional economics, and its role in transition economics like in Bosnia and Herzegovina. In this case Multiple Linear Regression Method is used and analyzed according to the sets of  variables. Results show the positive relations of Large Scale Privatization and Small Scale Privatization and negative relations of Government Budget on Gross Domestic Product. The author expects that this research topic should help to the Government institutions and Private sectors in Bosnia and Herzegovina.    Keywords: Institutional Economics, Economic growth, Bosnia and Herzegovina, Multiple Linear Regression Method, Large Scale Privatization, Small Scale Privatization, Government Budget, Gross Domestic Product</text>
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                    <text>The Role of Institutions in Transition Economics: a Deeper Look on the
Relationship between Privatization and Economic Growth in Bosnia and
Herzegovina
SuadKrcić
International Burch University
Bosnia and Herzegovina
suad.krcic@gmail.com
ErkanIlguen
International Burch University
Bosnia and Herzegovina
erkan.ilgun@ibu.edu.ba
Abstract: The field of Institutional Economics is about the theoretical and empirical findings
that have a major role in today’s understanding of institutions. The relationship between the
institutions and Economic growth is confirmed by the literature. This paper begins with the
principles and explanations of the theoretical aspects of old and new institutional economics,
and its role in transition economics like in Bosnia and Herzegovina. Descriptive statistic is
analyzed according to the sets of variables. The author expects a positive relationship
between Institutions and Economic Growth.
Keywords: institutional economic, economic growth, new economy, new institutions,
privatization, transition economics, Bosnia and Herzegovina.

78

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ILGÜN, Erkan</text>
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                <text>The field of Institutional Economics is about the theoretical and empirical findings that have a major role in today’s understanding of institutions. The relationship between the institutions and Economic growth is confirmed by the literature. This paper begins with the principles and explanations of the theoretical aspects of old and new institutional economics, and its role in transition economics like in Bosnia and Herzegovina. Descriptive statistic is analyzed according to the sets of variables. The author expects a positive relationship between Institutions and Economic Growth.    Keywords: institutional economic, economic growth, new economy, new institutions, privatization, transition economics, Bosnia and Herzegovina.</text>
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                    <text>Journal of Economic and Social Studies

The Role of Intercultural Communication Competence on
Service Reliability and Customer Satisfaction
Ali Ihtiyar
International Business School
University Technology Malaysia
Kuala Lumpur, Malaysia
aliihtiyar@gmail.com
Fauziah Sh. Ahmad
International Business School
University Technology Malaysia
Kuala Lumpur, Malaysia
fsa@ibs.utm.my
Abstract: The article presents an inclusive framework on

three major constructs namely intercultural communication
competence, service reliability and customer satisfaction in
the grocery retail settings in Malaysia. The constructs’
validity and reliability were examined based on structural
equation modeling. Based on the proposed framework, a
number of propositions were developed to facilitate
empirical investigation on intercultural communication
competences of the selected grocery retail outlets. This
contributes to the development of a theory based path
model that links the intercultural communication
competence to service reliability and customer satisfaction.
While numerous scholars have considered the extensive
topics of service quality and customer satisfaction, however,
none of those studies explored on the critical role of
intercultural communication competence and incorporated
the construct with perceived service quality and customer
satisfaction. One of the most critical finding of the study is
the dimension of perceived service quality and intercultural
communication competence have positive relationship and
it also progressive finding for further research on other
dimensions of perceived service quality.

Volume 5 Number 1 Spring 2015

Keywords: Intercultural

Communication Competence;
Service Quality; Customer
Satisfaction; Service Reliability and
Retailing.

JEL Classification: F600, M310,
Z100, Z130,

Article History

Submitted: 15 July 2013
Resubmitted: 21 October 2013
Resubmitted: 4 December 2014
Accepted: 15 December 2014

http://dx.doi.org/10.14706/JECOSS
11518

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Introduction
Increasing the recognition of the significance of services, there is a growing awareness
that the competitive strategies in retailing may integrate a framework of intercultural
service quality assessment and enhancement (Ahmad et al., 2014; Briones et al.,
2009). This has given rise to the notion of measuring the service quality (SQ) with
cultural aspects in retailing, which has become a crucial element in the retailer
business (Cameran et al., 2010). Integration in emerging economies, globalisation,
elimination of trade barriers and innovations in technology have facilitated and
compelled the retailers to internationalise many value chain activities (Hutchinson et
al., 2009). Nevertheless, despite suggestions of enlarged cultural homogeneousness
(Keillor et al., 2001), the retailers continue to struggle in overseas markets due to
their inability to understand and overcome cultural differences (Hopkins et al.,
2009). Obviously, the evaluation of service experiences and measurement of
customer satisfaction cannot be performed without cultural dimension (Sharma et
al., 2012; Ihtiyar et al., 2013). Developments on multiculturalism in marketing in
the past decades have focused on how cultural aspects influence customer choices
(Huang et al., 2013), interpersonal interaction (Sharma et al., 2012), employee
performance (Kong and Jogaratnam, 2007; Sizoo et al., 2005), service evaluation
(Sharma et al., 2012; Paswan and Ganesh, 2005), customer satisfaction (Hopkins et
al., 2009) and purchase intention (Teng and Laroche, 2007). Increasingly greater
complexity of the retail atmosphere - density of growing competition, demanding
customers and shopping attitudes of customers, the capability of retailers to offer a
satisfactory service may be crucial and attractive manoeuvre to differentiate and
actively satisfy the customers (Martinelli and Balboni, 2012). In fact, the tools
usually used by the retailers for competition and promotion, such as low price and
combined merchandise offers, may influence the effectiveness in competition
negatively since the offers perceived as homogeneous by customers. In other words,
in order to improve level of service performance as well as the customers’ perception
of it, the retailers make different moves to better satisfy their potential customers.
When managing cultural issues in the multicultural atmosphere, intercultural
communication competence (IC) that deals with having the right mind set, skill and
sensitivity, is rising as a crucial aspect for intercultural service encounters (ISEs) and
has become a new research theme in ensuring customer satisfaction (CS) (Sharma et
al., 2012; Ladhari, 2009). CS with highly satisfied service experiences has positive
effect on enhancing customer retention, long-term business success, positive word of
mouth, loyalty, cost-effectiveness and sustainable competitiveness (Martinelli and
Balboni, 2012; Kim et al., 2010; Ladhari, 2009).
146

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�The Role of Intercultural Communication Competence on Service Reliability and Customer
Satisfaction

Although, general acceptance on significance of IC, particularly for service providers
operating in various cultural settings, most of existing discussions are conceptual and
qualitative based. However, many authors such as, Sharma et al. (2012); Ueltschy et
al. (2007); Friedman and Antal, (2005) suggest that measurement of service quality
for service settings in multicultural societies may include cultural dimension for
better understanding customers from various cultural backgrounds.
However, some the existing models do not include ‘culture’ as a dimension such as
SERVQUAL and RSQS. Therefore, the gap exists in providing empirical evidence
on the relationships between the intercultural communication competence, service
reliability and customer satisfaction, particularly in a specific industry type that
operates in multicultural atmosphere and emerging economy.
The aim of the study is to examine the role of intercultural communication
competence (IC) on service reliability (R) and customer satisfaction (CS) in grocery
retailing of Malaysia. This study particularly investigates IC in terms of inter-role
congruence (IC4) and interaction comfort (IC1, IC2 and IC3), as highlighted in
Table2. The study examines service reliability aspect of perceived service quality,
which was developed by Dabholkar et al. (1996). Furthermore, the dimension of
customer satisfaction is based on product quality (CS1 and CS2), product
assortment (CS3) and price (CS4).
In order to meet the research goals, the study improves and empirically investigates
the theoretical model of interrelationships among these three constructs. According
to the proposed framework, R mediates the impact of IC on CS. Service reliability
and validity of the constructs was assessed using confirmatory factor analysis. Then,
structural equation modelling (SEM) was employed to estimate the
interrelationships among constructs and to compare proposed model.
Following this introduction section, the present study indicates a literature review
and develops the hypothesised relationships among the constructs of the proposed
model. The methodology of empirical study of the proposed model is then
represented. This is followed by a presentation of the research findings as well as
their implications.

Volume 5 Number 1 Spring 2015

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�Ali Ihtiyar &amp; Fauziah Sh. Ahmad

Literature Review
Intercultural Communication Competence (IC)
Intercultural communication competence is the ability to think, discriminate the
differences, manage the experiences appropriately, and build an efficient
communication with people from different cultures in the multicultural society
(Friedman and Antal, 2005). Instead of this widely definition, there is a consensus
about its influences on intercultural interactions (Lloyd and Luk, 2011; Ward,
2008). People with higher IC show a greater capability to learn different aspects of
other cultures, such as foreign languages and cultural norms. Furthermore, they can
integrate with other cultures undoubtedly (Lustig and Koester, 2009). As
emphasised in the interdependence theory (Surprenant et al., 1983), each part of
interaction has been influenced from another part, because the behaviour of the first
part is having an impact on the second part. Furthermore, interactions among
intercultural service encounters (ISEs) may establish or eliminate the barrier due to
perceived dissimilarities in behavioural norms (Lustig and Koester, 2009). Thus,
individuals with higher IC show more respect and responsiveness for people from
other cultures, respond to unfamiliar behaviours in a non-judgmental way without
showing visible or perceivable discomfort (Sharma et al., 2012). Furthermore, they
willingly use their knowledge and experience about other cultures to manage various
expectations and reduce the uncertainties of ISEs during the service delivery,
compared to those with lower IC (Wang and Mattila, 2011; Lustig and Koester,
2009).
Although interaction comfort has significant impact on achieving, a satisfactory
outcome that is particularly related customers’ collaboration (Sharma et al., 2012).
However, expectations or perceptions and interactions of customers’ in the service
marketing literature have been tested without IC in past decades (Wang and Mattila,
2010; Yu et al., 2001). Table 1 represents several previous studies related to the
intercultural context in the marketing.
Due to the achievable service outcome is highly related the role clarity (Sharma et al.,
2012), role clarity becomes one of the crucial items for the model. Role clarity is
identified as the both sides of interaction recognise and accept each other’s role in
interaction (Solomon et al., 1985). Rarely, ISEs in familiar cultures, they may have
different expectations or perceptions about each other, or they do not always tolerate
with their role in society (Baker et al., 2009). Therefore, as mentioned in role theory
148

Journal of Economic and Social Studies

�The Role of Intercultural Communication Competence on Service Reliability and Customer
Satisfaction

(Solomon et al., 1985), confusion or misunderstanding about role clarity breaks the
communication among ISEs and lead to dissatisfaction.
Table 1. Some of the Recent Conceptualizations of Intercultural Communication
Competence in the Marketing Literature
Author
Concept
Definition
Sharma et Intercultural “This article presents a conceptual framework for
al. (2012)
intercultural service encounters applicable to both
consumers and employees.” (p. 227)
Baker et al. Intercultural
(2009)

“This paper aims to report a study that focuses on
the moderating role of involvement in the
relationships between consumer contact employees’
consumer orientation and service quality perceptions
and satisfaction.” (p.115)

Reimann et Intercultural
al. (2008)

“This article addresses the issue of cultural
differences in the context of business-to-business
relationships.” (p.63)

Ward
(2008)

Intercultural

“The paper pays tribute to the work of John Berry
and the organizational frameworks that he has
proposed for research on identity, acculturation and
intercultural relations. It also suggests that overreliance on these frameworks may constrain
developments in the field.” (p.105)

Kong and Intercultural
Jogaratman
(2007)

“This research extends previous work by examining
cross-cultural differences and intends to provide a
better understanding of restaurant consumers in the
USA and Korea, as well as to enable restaurant
operators and managers to better service their
clientele in the global marketplace.” (p.275)
“This article offers an alternative approach to
intercultural
communication
competence,
‘negotiating reality’, that engages cultural conflict as
a resource for learning.” (p.69)

Friedman
Intercultural
and Antal
(2005)

Volume 5 Number 1 Spring 2015

149

�Ali Ihtiyar &amp; Fauziah Sh. Ahmad

Sizoo et al. Intercultural
(2005)

Ryoo (2005)

Intercultural

Paswan and Intercultural
Ganesh
(2005)
Hopkins et Intercultural
al. (2005)

Yu et
(2001)

al. Intercultural

“This study proposes adding to that trend by
attempting to measure the effect of intercultural
sensitivity on the cross-cultural performance of
service employees.” (p.245)
“This study presents an in-depth analysis of talk
between Korean immigrant shopkeepers and their
African-American consumers in service encounters.”
(p.79)
“This study empirically investigates the notion of
being comfortable with social interaction in a
foreign country (interaction comfort) and its impact
on how service quality is evaluated.” (p.93)
“The value of this paper is that it uses cultural
identity theory to extend an existing model that
examines the nature and determinants of consumer
expectations of service.” (p.329)
“This paper presents a conceptual framework and
research approach for examining the intercultural
communication competence (IC) of Chinese tour
guides, the factors that contribute to IC, and the
impacts of IC on Chinese tourists’ satisfaction with
their experience” (p.75)

Author’s own work
Service Quality from the Retail Perspective
Service quality (SQ) is a fundamental strategy for sufficient superior performance in
grocery retailing; however, customers’ demand not simply products or affordable
prices but also convenience-shopping experience (Martinelli and Balboni, 2012).
Previous studies addressed to measuring SQ in the retailing settings have often
started from SERVQUAL (Parasuraman et al., 1988; 1985). The scale
operationalizes SQ by calculating differences between customer’s expectations
(desired level) and recent performances (perceived level), by evaluating both in
relation to 22 items that are classified under five broad categories. The services are
evaluated as excellent if recent performance is higher than expectations; it is
considered as satisfied, if it only equals expected level; services are classified as
dissatisfied, if it does not meet expectations of customers (Vesel and Zabkar, 2010).
The SERVQUAL scale has been examined in great number of studies conducted in
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�The Role of Intercultural Communication Competence on Service Reliability and Customer
Satisfaction

various service settings such as; health care (Padma et al., 2010), professional services
(Cameran et al., 2010), information systems (Kettinger et al., 2009), tourism
industry (Jani and Han, 2011), higher education (Trivellas and Dargenidou, 2009),
professional services and fast food (Cronin and Taylor, 1992), banking (Amin and
Isa, 2008) and retail settings (departmental and/or discounted stores) (Vesel and
Zabkar, 2010; Zhao et al., 2002; Mehta et al., 2000; Dabholkar et al.,1996).
Yet, SERVQUAL scale has also been criticized by many authors such as, Das et al.
(2010); Caro and Garcia, (2007); Mehta et al. (2000) and Babakus and Boller,
(1992); they suggested that model requires modification and customization to
specify features of the industry. The first reason of criticism is as highlighted in study
of Wall and Payne (1973), customer’s expectations (desired level) of services marked
higher than performance (perceived level) of services by customers. Another
challenge in the model, realization of E (expectation) and P (perception) version of
SERVQUAL caused confusion on participants, and data quality is influenced by
confusion and apathy (Brandon-Jones and Silvestro, 2010; Bouman and Van Der,
1992). For instance, Babakus and Boller (1992) used the SERVQUAL scale to
measure SQ in their study, and they found that, as employed in the SERVQUAL
scale, score relies in perception more significant than expectation. Finn and Lamb
(1991) used SERVQUAL scale among four different types of the retailers in
numerous sizes, and they concluded that scale is not applicable for the retailers
without any industrial justification Ladhari (2009). Another study that was
conducted by Zhao et al. (2002), used SERVQUAL scale for measuring SQ in the
departmental stores in China, and outcome of SERVQUAL scale did not harmonize
in retail sector of Mainland China properly. SERVQUAL is not suitable for retail
settings due to composite nature and specific requirements of retail business settings
and their customers (Martinelli and Balboni, 2012; Das et al., 2010; Vesel and
Zabkar, 2010). Considering these aspects, lack of measurement scales particularly
addressed to measure SQ in retailing, Dabholkar et al. (1996) introduced to retailers
a validated specific scale that is called Retail Service Quality Scale (RSQS).
Dabholkar et al. (1996) filled critical and significant gap in context of service
marketing. Authors developed and empirically validated the RSQS. Model consists
of 28-item and 17 of them have been adapted from SERVQUAL, and other items
have been developed by their literature review, phenomenological interviews,
exploratory depth interviews and qualitative research. Dabholkar et al. (1996)
proposed RSQS has hierarchical factor structure comprising five basic dimensions as
physical aspects, personal interaction, policy, problem solving, and service reliability.

Volume 5 Number 1 Spring 2015

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�Ali Ihtiyar &amp; Fauziah Sh. Ahmad

Reliability
According to Dabholkar et al. (1996), service reliability construct consists of mainly
two dimensions that are titled as inspiring “promises” and “doing it right”. The most
important reason of concentration to this construct is intangible services, which
usually requires greater service reliability between customers and service providers.
Therefore, service reliability has a greater impact on services than on goods
(Dabholkar et al.,1996).
Our knowledge on SQ differs in comparison with the home and host culture is poor
or even lacking, particularly service reliability is affected by cultural value priorities
during the interaction (Ueltschy et al., 2007). There is however lack of research
regarding how IC change and accordingly affect the behaviour in the context of
service reliability and CS in multicultural retail environment.
Customer Satisfaction
Customer satisfaction is one of the most examined topics in service marketing
literature. Particularly, a review from these studies, interrelationship among service
evaluation, loyalty and other related topics with culture have become competitive
power for the intercultural retailers (Vesel and Zabkar, 2010). For instance, CS has
been found to reduce costs for attracting new customers and dealing with poor
quality, defects and complaints (Michel et al., 2009). Reflecting these benefits, CS
has been found to improve the long-term financial performance of firms (Williams
and Naumann, 2011), have a positive impact on loyalty (Ahmad et al., 2014), be
applicable predictor for purchase intention (Kuo et al., 2009), increase firm
profitability (Williams and Naumann, 2011), enhances firms’ market value (Ahmad
et al., 2012; Kanning and Bergmann, 2009) and relationship with culture (Padma et
al., 2010; Chan and Wan, 2008). Both conceptual and managerial thinking can
benefit from this concentration. From former viewpoint, this study more precisely
articulates these linkages and assumes that IC with R can affect the CS, specifically
buying-experience of customers in multicultural atmosphere.
Interrelationship among Intercultural Communication Competence, “Reliability” and
Customer Satisfaction
The role of services in world economy has increased remarkably within past decades,
particularly among emerging economies. During the period of development, services
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�The Role of Intercultural Communication Competence on Service Reliability and Customer
Satisfaction

have replaced goods and probability of choosing among various suppliers gives
customers greater power (Kim et al., 2010). Retail service providers must create
innovative, competitive and stable marketing orientation in multicultural emerging
economies, due to the complicated customers’ attitudes and enlarged market share in
new markets instead of saturated markets (Hutchinson et al., 2009; Ueltschy et al.,
2007). Therefore, driven by recent growth pace of internationalisation of retailers,
number of studies have examined and researched varying perceptions of SQ (Paswan
and Ganesh, 2005), CS (Kuo et al., 2009; Reimann et al., 2008), purchase intention
(Souiden and Pons, 2009; Teng and Laroche, 2007), loyalty (Omar and Musa,
2011), ISEs (Kong and Jogaratman, 2007; Sizoo et al., 2005) and related topics in
unanimously context of culture.
The rationale of these studies in various areas within context of intercultural
marketing is analysing and improving applicable strategies for the retailers in the
multicultural society (Chan and Wan, 2008). Cognitive deductions of several
implementations in practical and/or theoretical fields of these studies have proposed
that intercultural topics are becoming a significant construct in service marketing
literature, specifically in emerging economies (Ihtiyar et al., 2014; Ahmad et al.,
2014; Wang and Mattila, 2011; Souiden and Pons, 2009). Although service
marketing literature that investigated impact of culture on CS, interrelationship
among a construct of SQ, CS and IC has conventionally received relatively little
examine consideration (Mueller and Lockshin, 2008). Moreover, when cultures or
countries differ in behaviour, culture may be integrated into theoretical and
empirical research of diffusion models so that it can be evidenced that different
cultural settings create highly conspicuous differences in customer behaviour
(Shekarchizadeh et al., 2011). In terms of these perspectives, present study conducts
a research to relate intercultural communication competence, service reliability and
its impact on customer satisfaction. Thus, following hypothesis are developed:
Hypothesis 1. Service reliability is significantly and positively related to customer
satisfaction.
Hypothesis 2. Intercultural communication competence is significantly and positively
related to service reliability.
Hypothesis 3. Intercultural communication competence is significantly and positively
related to customer satisfaction.
Grocery Retail Industry of Malaysia

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According to the last census in 2010 (Statistics Department of Malaysia, 2010),
Malaysia’s population was 28.3 million, and Malaysia was the 17th crowded country
throughout Asia and the 42nd most crowded country in the World. Over 60 per cent
of population is regarded as middle-income customers, and poverty has virtually
been eliminated. Over 70 per cent of population now lives in urban areas (Cottrell,
2010). These figures might be a deductive and explicable reason for investing in food
retail industry of Malaysia by global players (Moklish et al., 2009). However, the
market has not been identified as “easy in or easy out”. Malaysia’s grocery retail
industry has highly dynamic and competitive market structure.

Furthermore, well-know global players such as Carrefour (26 Branches-cooperated
with Aeon), AEON-JUSCO (19) and Tesco (45), have been challenging domestic
brands such as Mydin (94) and Giant (147) etc. and they have been creating new
strategies for increasing their market share against the domestics retailers in the
market. According to (PWC, 2011), turnover of the sector has increased up to $54
billion dollars in 2010, from $48 billion in 2009. Furthermore, expected growth rate
between 2010 and 2012 is between 5 per cent and 6 per cent, respectively. As in
world, growth rate of retail industry in Malaysia will be represented an increase in
coming years, and annual expected growth rate of the industry is 3.7 per cent and
3.8 per cent per annual in 2013-2014, respectively (PWC, 2011).
Methodology
The study examines the impact of intercultural communication competence on
reliability and customer satisfaction in grocery retail outlets in Klang Valley,
Malaysia. Empirical study was using self-administered questionnaires for collecting
data from Malaysian respondents. From population, among the sample for the
study was selected on convenience sampling (Huddleston et al., 2009). Several
reminders were sent at monthly intervals to potential respondents, in order to
improve the response rate. Only 227 usable feedbacks were received by before the
deadline and about eight of returned surveys were not appropriate for further
analysis. This represented about 73.24 per cent of total 299 invitations, which were
sent by e-mail.
Likert-type scale was applied in previous studies to the questionnaire design, running
from 1 (very low) to 7 (very high) (Qin and Prybutok, 2009). Before distribution of
the questionnaire, a pilot test was performed for normality check, readability,
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�The Role of Intercultural Communication Competence on Service Reliability and Customer
Satisfaction

accuracy, comprehensiveness and further item purifications appropriately. Based on
pre-test feedbacks, few items were reworded for a comfortable length of time reading
and answering the survey. The Cronbach’s α coefficient was used to determine the
questionnaire service reliability, due to the items that were used to form a scale
(Likert scale), construction at the group level and service reliability of each item at
the individual level has to be evaluated. An exceeding 0.9 indicates high service
reliability, α between 0.9 and 0.7 indicates acceptable level of service reliability, and
α below 0.35 indicates low service reliability.
Results
Characteristics of the participants are as summarised in table 3; 72.7 per cent of
participants were male. In terms of income, 46.3 per cent of them had a monthly
income of more than $ 1,000, 75.1 per cent had a monthly income less than $1,333,
and 75.3 per cent had a monthly income of less than $1,334. In terms of education,
90.4 per cent of them had a degree, 8.2 per cent of them had a diploma, and 1.30
per cent had a high school education. More than 58 per cent of them are Malay, 5.90
per cent of participants are Chinese, 7.3 per cent are Indian, and percentage of
others was five. The participant who were represented 78.5 per cent of them
purchase maximum five times in a month, and more than 41 per cent of them are
paying between $34-$66 for purchasing at one time.
Table 2. Demographic Indicators
Gender Age
Education Ethnicity

Male
20-24
(72.7%) (16.9
%)
Female
(27.3%) 25-29
(46.1
%)
30-34
(19.2
%)

High
School
(1.4 %)
Diploma
(8.2 %)
Degree
(90.4 %)

Volume 5 Number 1 Spring 2015

Malay
(58.9 %)
Chinese
(5.9 %)
Indian
(7.3 %)
Middle
East
(5.5 %)

Income

&lt;RM
1999
(11.0
%)
RM
2000RM
2999
(42.5
%)

Purchasing
Frequency
Amount
at
of
One Time
Purchasing
&lt;RM 99
0-5
(29.7 %)
(78.5 %)
RM100-RM
199
(41.1 %)
RM200-RM
299 (20.1 %)
RM 300&lt;
(9.1 %)

6-9
(16.5 %)
10-14
(3.2 %)
15&lt;
(1.8 %)

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�Ali Ihtiyar &amp; Fauziah Sh. Ahmad

35-39
(11.4
%)
40-44
(3.2
%)
45 and
above
(3.2
%)
Author’s own work

Europe
(17.4.5
%)
Others
(5 %)

RM
3000RM
3999
(21.9
%)
RM
4000&lt;
(24.7%)

The theory assessment of SEM analysis for the model is based on revised number of
items, as in table 3, after removing those with weak factor loading scores from
confirmatory factor analysis (CFA).
Table 3. Items and its Sources.
Questions
Service Reliability
(R1) Performs the service right the first time.
(R2) Providing services on time that it is promising to
do so.
(R3) Availability of merchandise.
(R4) Error-free sales transaction and record.
Consumer Satisfaction
(CS1) This store has good quality merchandise.
(CS2) This store offers products with excellent features.
(CS3) This store has the right merchandise selection.
(CS4) This store provides a good value for money.

Sources
Dabholkar et al. (1996)

Huddleston et al.
(2009);
Moliner et al. (2007);
Pappua and Questerb
(2006)

Intercultural Communication Competence
(IC1) I am comfortable to staff who is of different Sharma, et al. (2012)
ethnicity than mine.
Briones et al. (2009)
(IC2) I think the store is well associated and adapted to Dodd (1998)
local culture.

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�The Role of Intercultural Communication Competence on Service Reliability and Customer
Satisfaction

(IC3) I usually handle culture transitions very well.
(IC4) The store staffs behave accordingly within their
expected role.
The Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy, Bartlett’s test of
Sphericity and Cronbach α test for reliability are conducted and represented in table
4.
Table 4. Factor Analysis and Cronbach α
Constructs
Bartlett’s Test
Service Reliability
χ2= 386,906
Customer Satisfaction
χ2=424,800
Intercultural
χ2=263,229
communication
Overall

df=6
df=6

KMO Cronbach α
Sig.&lt;0.001 0.776 0.839
Sig.&lt;0.001 0.825 0.871

df=6

Sig.&lt;0.001 0.787 0.748
0.887

Table 5 indicates the standardised loadings scores of each variable of the latent
constructs and good fit indices for CFA analysis, to warrant the appropriateness to
proceed with structural measurement. Comparative Fit Index (CFI) of 0.971 and
Tucker Lewis Index (TLI) of 0.962 reveal good fit of incremental index for this
analysis, while Root Mean Square Error of Approximation (RMSEA) of 0.056
represents satisfactory absolute fit index.

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Table 5. Regression Weights and Other Statistics
Items
R
&lt;--CS
&lt;--CS
&lt;--R1
&lt;--R2
&lt;--R3
&lt;--R4
&lt;--IC1
&lt;--IC2
&lt;--IC3
&lt;--CS1
&lt;--CS2
&lt;--CS3
&lt;--CS4
&lt;--IC4
&lt;--Chi Square= 86.256
df=51
p=0.001
CFI=0.971
TLI=0.962
RMSEA=0.056

IC
R
IC
R
R
R
R
IC
IC
IC
CS
CS
CS
CS
IC

Estimate

S.E.

C.R.

P

0.729
0.220
0.725
1.000
0.987
0.881
0.873
1.000
1.109
0.908
1.000
1.032
0.940
0.873
0.968

0.116
0.071
0.117

6.296
4.122
6.188

***
***
***

0.069
0.074
0.092

14.247
11.861
9.453

***
***
***

0.128
0.122

8.689
7.444

***
***

0.073
0.076
0.076
0.136

14.047
12.385
11.456
7.119

***
***
***
***

Structural Equation Modelling
According to Hair et al. (2010), the fit analysis must include one incremental index
and one absolute index in addition to chi-square χ2 value and the associated
freedom degree. Figure 1 indicates the fitted research model that represents
acceptable goodness-of-fit indices, estimates of standardised parameters and
significant values.
As indicated in the model, chi-square χ2 is significant with ratio of χ2 / df. The TLI
incremental fit index, the CFI goodness of fit index and RMSEA absolute fit index
also performed perfectly for structural model.
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Satisfaction

Figure 1. Structural Equation Model on Intercultural Communication Competence,
Customer Satisfaction and Reliability

The path coefficients in table 5 represent that intercultural communication
competence has statistically a significant relationship with service reliability and
customer satisfaction. Service reliability also remarkably affects customer satisfaction,
while intercultural communication competence has significant relationship with
customer satisfaction; therefore, H1, H2, and H3, were accepted. In this study, H1
where R was a positive determinant of CS with standardized coefficients as 0.246,
meaning that when R goes up by one standard deviation, CS up by 0.246 standard
deviations. For H2 IC was a positive determinant of R with coefficient is 0. 569.
The least significant path is at H3 where IC was a positive determinant of CS with a
coefficient of 0.632.
Table 6. Standardized Regression Weight Estimates
Description
Estimate
0.569
IC→ R
0.632
IC→CS
0.246
R→CS

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�Ali Ihtiyar &amp; Fauziah Sh. Ahmad

Conclusion
The fundamental objective of this study is to present and examine relationships of
theoretical model among intercultural communication competence, service
reliability, and customer satisfaction. The integrated framework presented in the
study postulated that intercultural communication competence effects on customer
satisfaction directly. The model also assumed that intercultural communication
competence has positive relationship with customer satisfaction and service
reliability. According to results, represented relationships were provided in.
Several studies have considered significance of cultural issues in service marketing
context (Sharma et al., 2012; Baker et al., 2009; Reimann et al., 2008; Kong and
Jogaratman, 2007). However, empirical examinations on role of intercultural
communication competence in customers’ evaluations of service experiences remain
limited in service marketing literature. This study has concentrated in sufficiency by
proposing and testing a theoretical model of interrelationships among service
reliability, customer satisfaction, and intercultural communication competence.
Future studies could advance the knowledge regarding other dimensions of service
quality by testing and refining the proposed model in other service settings.
Furthermore, examining other dimensions may assist and encourage the model
generalizability.
The findings of the present study have several implications for forthcoming
investigation in theoretical and managerial fields. First, as noted above, future studies
could test both the direct and indirect influences of intercultural communication
competence on service reliability and customer satisfaction in different service
settings or industries. Second, it is apparent that the role of intercultural
communication competence in service experience may create great interest to
researchers and practitioners. Third, results of present study suggest that other
dimensions of perceived service quality may be included in future studies, in terms of
managerial and theoretical implications. The major managerial implication from
present study is that, evaluations of service experience may include reference to
intercultural communication competence of service experience in addition to the
traditional cognitive evaluation (that is, “perceived service quality”). Majority of
grocery retailers ask customers for cognitive feedback on a variety of service
dimensions without recording positive and/or negative feelings that customers have
experienced during their shopping in the store. Second, as practitioners are well
aware, employees play a significant role in determining delivery of services during
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�The Role of Intercultural Communication Competence on Service Reliability and Customer
Satisfaction

interaction with their customers. Practitioners may improve level of education and
sequence of training activities for their staff particularly frontline staff, such as
cashiers, sales persons, to ensure that their staffs are completely and precisely aware
of importance of monitoring and managing interaction properly in all service
encounters. The study is also providing comprehensive outcomes for re-assessment
of service quality with culture as a dimension in Malaysian retail industry.
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                <text>Abstract: The article presents an inclusive framework on three major constructs namely intercultural communication competence, service reliability and customer satisfaction in the grocery retail settings in Malaysia. The constructs’ validity and reliability were examined based on structural equation modeling. Based on the proposed framework, a number of propositions were developed to facilitate empirical investigation on intercultural communication competences of the selected grocery retail outlets. This contributes to the development of a theory based path model that links the intercultural communication competence to service reliability and customer satisfaction. While numerous scholars have considered the extensive topics of service quality and customer satisfaction, however, none of those studies explored on the critical role of intercultural communication competence and incorporated the construct with perceived service quality and customer satisfaction. One of the most critical finding of the study is the dimension of perceived service quality and intercultural communication competence have positive relationship and it also progressive finding for further research on other dimensions of perceived service quality.</text>
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                    <text>3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo

Frazelle E. (2002) Supply Chain Strategy: The Logistics of Supply Chain Management,
McGraw-Hill, New York.
Kleindorfer, P.R., Singhal, K. and Van Wassenhove, L.N. (2005) Sustainable operations
management, Production and Operations Management, 14(4), 482–492.
Li, G., Yamaguchi D. and Nagai M. (2007) A grey-based decision-making approach to the
supplier selection problem, Mathematical and Computer Modeling, 46, 573-571.
Linton, J.D., Klassen, R. and Jayaraman, V. (2007) Sustainable supply chains: an
introduction, Journal of Operations Management, 25 (6), 1075-1082.
Sharma, R.R.K., and Sharma, K. D. (2000) A new dual based procedure for the transportation
problem, European Journal of Operational Research, 122 (3), 611-624.
Sharma, R.R.K., and Berry, V. (2007) Developing new formulations and relaxations of single
stage capacitated warehouse location problem: Empirical investigation for assessing
relative strengths and computational effort, European Journal of Operational Research, 177
(2), 803-812.
Tan, K.S., Ahmed, M.D. and Sundaram, D. (2010) Sustainable enterprise modeling and
simulation in a warehousing context, Business Process Management Journal, 16 (5), 871-886.
Vlachopoulou, M., Silleos, G., and Manthou, V. (2001) Geographic information systems in
warehouse site selection decisions, International Journal of Production Economics, 71 (1),
205-212.

The Role Of Internal Auditing In Sustainable Development And Corporate Social
Reporting

Serpil Senal, Gaye Atilla, Burcu Aslantaş Ateş
Süleyman Demirel University, Isparta, Turkey
E-mails:serduz@mynet.com, burcuatesaslantas@msn.com, gaisan@hotmail.com

Abstract
Sustainability means a lot more than just the economic, environmental, and social challenges
an organization faces in its everyday and future operations: it means the ethics in these
operations, touching on all the lives of those in the organization, its stakeholders, and the
planet. The objectives of all sustainable development programs must be measured, and the
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results are to be reported in and outside the organization. Stakeholders and society need to be
assured independently in that such measures are recorded accurately and in timely fashion
before being reported. There are opportunities for internal auditing to contribute to its
independent and objective assurance services as an auditor as well as a consultant and
teacher. Such a contribution can take best-practice internal auditing to a high level of added
value. The internal auditor is a vital conduit to the creation of trust.
The internal auditor contributes to a number of corporate social reporting (CSR) and
sustainability issues by keeping management updated on the aspects of operational and
compliance issues, which is part of their core function, as well as brand management audits
and through participation in the stakeholder dialogue process. Furthermore, the increasing
importance of CSR and sustainability and its impact on risk management bring additional
challenges involving the control environment, including the provision and installation of
effective management and reporting systems, which will provide clarity and transparency,
and therefore trust. The internal auditor has an integral role in determining the materiality of
the content of the CSR and sustainability report. This is a responsibility that can only increase
with the burgeoning of CSR and sustainability reports, both in volume and size of content.
Today, internal audit function that is the most important factor in creating sustainable value
to improve the value of the company and firm performance is important to correct
implementation and to be sustainable. Therefore, enterprises should assign enough
importance to internal auditing and should pay attention to create a sustainable audit system.
The aim of this study is to investigate the system of sustainable internal audit which is the
essential element for sustainable development and corporate social reporting.

Keywords: Corporate Social Reporting, Internal Auditing, Sustainable Development,
Corporate Social Responsibility, Sustainable Management Systems.

1.INTRODUCTION
Sustainable development process drawing attention of both public sector and private sector
for decades have brought forward the concept of corporate sustainability. Particularly the
belief that the sustainable development process cannot be achieved without the support of the
entities has necessitated the consideration of sustainability process in the entities. In this
regard, sustainable policy and strategies have been developed via sustainable management
systems.

Variation of management policies and strategies has led to variation in the risk areas that the
entity will come across during its activities. Relevant variation have also created differences
in the roles and responsibilities of internal auditing that supports (COSO, 2006) the
designation of policies, procedures and strategies by the management and gives assistance to
the management, board of directors and audit committee responsible for the operation of this
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process with respect to review, assessment, reporting and increasing the effectiveness and
adequacy of corporate risk management processes.

In this study, the role and responsibilities of internal audit in corporate sustainability have
been reviewed. In this perspective, particularly internal auditing and current structure of
internal auditing has been reviewed and then new roles and responsibilities of internal
auditing in the corporate sustainability have been searched.

2.Internal Auditing
Internal auditing is an independent and objective activity of assurance and consulting aimed
to develop the activities of an entity and add value to these activities (D. Pehlivanlı, 2010, 7).
The purpose of internal auditing is to remedy each process to mitigate risks in the entity and
increase operating income (M.A. Yousuf, 2010). Internal auditing is aimed to give assistance
to the management, board of directors and audit committee in reviewing, assessing, reporting
and increasing the effectiveness and adequacy of corporate risk management processes
(COSO, 2006).

A fair internal auditing process must be relevant to both management and application
performance of the entity and auditing financial and operational risks of the entity. For this
reason, internal auditing is an important instrument of the firm in maintaining its operations
in a successful fashion. What is important is to use this instrument as required and in an
efficient manner so that the results are reflected on the activities of the entity
(G.Aras,2012,2).
According to the Standard 2130 of the Institute of Internal Auditors (IIA), internal audit
contributes to the progress of the entities in following dimensions (The Standard 2130 of
IIA):
_

Designation of organizational values and objectives and communication of these
objectives and values to staff,

_

Supervision of whether the objectives are achieved,

_

Maintenance of accountability,

_

Protection of organizational values.

Reasons necessitating the existence of internal auditing can be enumerated as follows
(D. Pehlivanlı, 2010, 19).
_

Responsibility and accountability: Obligatory transfer of authority and responsibility
due to the growth of enterprise; the need to search the effectiveness of the staff and the
compliance of senior management with policies,
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�3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo

_

Agency theory: The need to employ salaried executives as a result of professionalism
and growth of the entities and to determine to what extent these executives fulfill their
responsibilities,

_

Consulting and assistance to the management: The objective of internal auditing is not
only to discover the errors and deceits but also to provide consulting in areas where the entity
management needs advice.

_

Savings need: Today, since costs are minimized in every field in order to survive
intensive competition conditions, internal auditing units also help in finding areas to maintain
savings for entities.

_

Need to oppose fraudulent transactions: Internal audit is responsible for discovering
fraudulent acts of entity owners, executives or staff.

Internal audit also has roles and responsibilities for the corporate management which is the
assurance of sustainability and a process assisting the entity in working efficiently, drawing
human capital and financial capital and earning profits for all shareholders by balancing their
interests (M. Ertuğrul, M. Sarıkaya, A.A. Özdemir, M. Kılıç, S. Yılmaz, 2009, 9) to operate
efficiently. Within this framework, risk management, control and corporate management
processes as well as independent and unbiased assurance and consulting activities of the
entities and corporations are also under the responsibility of internal auditing. Making
significant contributions to the establishment of administrative accountability process in
entities, internal auditing creates added value for the entities with its opinions and
recommendations about appropriate performance of the activities as well as the performance
of appropriate activities (A.K. Uzun, 2012).

3. Corporate Sustainability
Sustainable development is the process of preventing waste of resources and directing
investments, technological innovations and industrial improvements in order to meet the
needs and requests of persons today and in future (Brundland Commission, 1987). Everincreasing roles of the entities in society have resulted in the consideration of sustainable
development concept more in business environment. As companies represent the productive
sources of the economy today, it is accepted that the society cannot achieve sustainable
development without the support of the companies. Therefore, private sector companies must
work actively to create economic values and to mitigate environmental and social problems
emerging from their activities as well as producing goods and services increasing living
standards (M. Sarıkaya, F.Z. Kara, 2007, 225). This situation introduced the concept of
corporate sustainability. Corporate sustainability is to satisfy the needs of direct and indirect
shareholders of an entity without making concessions from the facilities in order to meet the
requirements of future shareholders (M. Ertuğrul, M. Sarıkaya, A.A. Özdemir, M. Kılıç, S.
Yılmaz, 2009, 9).

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4. Role of Internal Audit in Corporate Sustainability
Sustainability with environmental, social an economical dimensions necessitated the
formation of consumer behaviors and other market dynamics within the framework of
sustainability and designation of a sustainable management system by the companies. For this
reason, risks and opportunities to emerge with respect to this process have also been inserted
among the priorities that the companies must take into consideration (IMKB, 2011, 4-6). New
function of the internal auditing is to define and understand the risks and opportunities
created by the sustainability process as well as to determine how these opportunities and risks
will affect the entity; to assess and report sustainability indicators and results of climate
changes.( www.deloitte.com/.../Role%20of%20Int%2). Sustainable development has a very
strong link with ethics. Companies must gain the trust of others not only for the financial
resources, but also for all resources used in the organization in order to create value. Trust
can be established only with transparency. In order to render the risks of company founders
or management consistent and balanced, to supervise that the company comprehends the
business field and competition conditions well and takes balanced decisions and to ensure
sustainability of the company, internal audit assessments must be made in a prudential, fair
and
value
increasing
manner
in
line
with
ethical
principles
(http://www.deloitte.com/assets/Dcom-Turkey/Local%20Assets/Documents/turkeytr_fbs_kurumsallasma_051110.pdf).
Corporate sustainability necessitated the designation of sustainable management systems. The
advantage of the relevant management system is that the system is an auditable structure
covering economic, environmental and social assumptions with a systematic, transparent,
consistent and reliable understanding manner (H.Niveuwlands, 2006, 37). Internal audit is
responsible for providing advisory services in this field with the senior management and must
follow up the entire process related to sustainability in the organization (H.Niveuwlands,
2006, 49-66).

Sustainable management process is consisted of (H.Niveuwlands, 2006, 37):
_

Determination of sustainable policies and strategies,

_

Information risk management and planning,

_

Improvement and application,

_

Control and correction,

_

Management review and continuous improvement.

Objective

Traditional Management
Understanding

Sustainable Management
Understanding

Economic Growth and profitability

Sustainability and standard of
living

Welfare of the shareholders

Welfare of the stakeholders
Products

394

Design based on function, style and
price

Design appropriate to the
environment

�3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo

Environment

Operating
Functions

Single use package product

Packaging friendly to the
environment

Dominance on the environment

In harmony with nature

Air pollution and wastes are
accepted as exteriority.

Elimination and management of air
pollution and wastes

Financing for profit maximization
in short term

Financing for sustainable growth in
long term

Accounting for traditional costs

Accounting focused on
environmental costs

Human resources management for
labor force effectiveness

Performance
Measure

Financial results

Human resources management
aimed to make the business
meaningful and protect security
and health in the work place
Financial, economic, social and
environmental results

Figure 1: Differences in Management Understanding (N. Tökgöz, S. Önce, 2009, 253).

As it is obvious from Figure 1, first step of sustainable management system is to issue
sustainable policies. Internal auditing must review sustainable policies determined and
determination process of these policies on a periodical basis. On the other hand, it is also
responsible for reviewing whether sustainable policies are in compliance with strategic plans
and other organizational policies. Furthermore, internal auditing must monitor and search all
relevant laws, regulations, protocols and industrial standards (H.Niveuwlands, 2006, 49-66).
For the sustainable management process to reach its objectives and targets, job descriptions
of the staff should be made appropriately. Duties, roles and responsibilities of the staff must
be clearly defined and it must be ensured that the staff has access to necessary sources in
order to fulfill their duties and responsibilities. The role of internal auditing at this stage is to
determine whether the staff appointed to the relevant duty is appropriate to the related job
description. In this regard, internal audit may resort to personnel files as well as survey
application. Another step of sustainable management process is risk management. Internal
auditing assumes a key role in this field. Internal auditor must develop a risk management
system covering sustainable perspective. In this process, internal auditor must give assistance
to the management for improvement, consideration and identification of risk management
methodologies by taking over a consultant’s role and collect evidence substantiating whether
risk management process has achieved its objectives (H.Niveuwlands, 2006, 49-66).
Corporate scandals unveiled in recent years, higher levels of information and awareness of
investors, environmental, ethical and social performances of the enterprises which have
become more important and sustainable development process have created differentiations in
the role of internal auditing. Particularly the fact that traditional internal auditing does not
represent risks related to sustainability process has been one of the essential factors affecting
the role of internal auditing in the enterprise. ( http://www.cipfa.org.).

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The risks which sustainable management system shall be exposed to may refer to
environmental, health and security risks in addition to the risks which each enterprise may be
exposed to. Nevertheless (H.Niveuwlands, 2006, 49-66),
_

Organizational reporting structure,

_

The possibility of causing environmental losses or fines,

_

The possibility of causing injuries and deaths,

_

The possibility of encountering adverse propaganda,

_

Loss of reputation or image can also be described as the risk areas that the enterprises
may come across in this process.
From this perspective, International Professional Practices Framework (IPPF) Issued by
International Institute of Auditors (IIA) enlists the risks related to the sustainability process
(http://www.theia.org).

1.

Strategic risk: Enterprises may go through changes in areas such as market placement,
consumer preferences, strategic investments (such as renewable energy) and stakeholder
communications along with sustainability and climate change. Therefore, senior management
or board of directors of the enterprise must determine how they can make use of these
changes in order to derive competition advantages. For example, manufacturing environment
sensitive products (green products).

2.

Compliance risk: Together with climate changes and sustainable development,
regulations in many areas such as national, international and regional areas have become a
current issue. The biggest risk in this field is related to the measurement of the results
concerning regulations. The fact that the applications are in different fields which are health,
security, human rights, labor acts, anti-bribery and environmental; and both their results and
measurements of these results show variance are among the key risks that the enterprises
experience. For instance, while environmental risks have direct impacts such as emission
costs, they have also indirect impacts such as the increase in energy prices.

3.

Financial risk: Climate changes and changes related to sustainable development may
directly or indirectly affect share certificate values of the enterprises. For example,
compliance to this process not only leads to new costs, but also new market losses.
Furthermore, corporate ratings given at the end of sustainability performance may cause the
enterprises to lose value in the eyes of the investors. All these developments may also be end
up with customer losses in addition to market losses.

4.

Reputation risk: Corporate reputation is a collective concept covering the opinions of
all stakeholders about corporate reputation, internal identity and particularly the opinions of
the customers about the corporation as well as external image. A strong reputation ensures
sustainable competition advantage. Reputation risk is described as potential negative
reputation about the business practices of corporations. It increases social and environmental
roles of the sustainable enterprises. For this reason, failure in fulfilling these responsibilities
increases reputation risk of the enterprise (E.Uzunoğlu,B.Öksüz,2008,114-116).

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Due to this process, most of the enterprises prepare and issue sustainability reports, in
other words, corporate social responsibility reports today for the following purposes (A.B.
Başar, M. Başar, 2006, 216):
_

To increase the possibility of monitoring process towards certain targets and facilitate
the application of environmental strategies,

_

To increase more awareness about environmental issues within the enterprise,

_

To express enterprise message explicitly within and outside the enterprise,

_

To increase credit rating due to transparency, to ensure increase in cost savings and
efficiency,

_

To increase the spirits of the staff, reputation of the enterprise and business
development opportunities.

Social responsibility or sustainability reporting is reporting of the activities and results of the
activities that an enterprise conducts within the framework of the obligations emerging from
its social responsibility (U. Kaya, A. Karakaya, 2008, 154). Together with this process,
internal audit has assumed the obligation of creating opportunities to ripen sustainability
program of the enterprise, maintaining reliability and appropriateness of integrated reporting
process and control reports of this process in addition to giving assurance for operation
activities.

The biggest expectation of the enterprises from sustainable development and social reporting
is satisfaction of their basic requirements. Internal auditing is responsible for transferring the
objective, yield and risks of sustainability program causing an additional cost for the
enterprises to the business management or board of directors. Enterprises generally think that
this process brings nothing, but additional costs and show a proactive approach against the
risks imposed by the process. In this respect, internal audit must state the importance of these
risks to the enterprises and create certain plans in order to remove the risks. On the other
hand, it must be ensured that senior management or board of directors also participate in the
sustainability process (www.deloitte.com/.../Role%20of%20Int%2).

Internal audit must be informed about the risks of corporate social responsibility process
discussed together with sustainability process. Nevertheless, internal auditors must have
sufficient information and capabilities in order to fully understand this process (J. Ridley, K.
D’Silva, M. Szombathelyi, 2011, 482). Internal auditors must answer the following questions
in order to turn the corporate social responsibility and sustainability process into an
opportunity (J. Ridley, K. D’Silva, M. Szombathelyi, 2011, 483):
_

Why should we pay attention to corporate social responsibility as an enterprise?

_

What is corporate social responsibility and where are we in this corporate social
responsibility?
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�3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo

_

Who are the interest groups of the enterprise and what are the needs of these groups?

_

What are the enablers?

_

What is triple bottom line?

_

Which enterprises are close to sustainable development?

_

Which managers report the results in the enterprise and give assurance to the report
results?

_

What is the role of internal audit in this process?
The reporting system of the sustainable management system must issue the report related to
environmental audit. However, the report must be issued in time and cover all results related
to the enterprise. Internal audit must be held responsible for the control of this process.
5.CONCLUSION
Internal auditing covering various audit activities such as compliance audit, activity audit and
information systems audit has been one of the indispensable activities of the enterprises
particularly with its function and scope for the reliability of financial reporting system in
companies and institutions, compliance with laws and regulations, protection of operating
assets, maintenance of economic, effective and efficient conditions of the activities, security
and reliability of information systems (S. Selimoğlu, 2011). The differences emerging in the
role of internal audit together with the corporate sustainability process defined (M. Ertuğrul,
M. Sarıkaya, A.A. Özdemir, M. Kılıç, S. Yılmaz, 2009, 9) as the sustainability of an
enterprise as a whole in terms of economic, ecological and social perspectives can be
summarized as follows (The IIARF- Sustainability and Internal Audit):

_
_

To design and improve sustainable management system,
To raise awareness about the sustainability with the help of training programs
organized for the staff,

_

To coordinate audit activities of external auditors,

_

To make suggestions related to the determination of external evaluators.

_

To assure that the objectives of the enterprise are fulfilled on condition that all
negative impacts related to all interest groups are minimized and the conditions to affect
interest groups positively are maximized,

_

To ensure compliance with rules and regulations related to the values with a sense of
responsibility,

_

To ensure that the resources are used at maximum level with a sense of responsibility
and reliable records are kept for all interest groups including shareholders and staff of the
enterprise,

_

To preserve both internal assets of the enterprise and external assets (air, energy,
nature etc.).

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                <text>The Role Of Internal Auditing In Sustainable Development And Corporate Social  Reporting</text>
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                <text>Sustainability means a lot more than just the economic, environmental, and social challenges  an organization faces in its everyday and future operations: it means the ethics in these  operations, touching on all the lives of those in the organization, its stakeholders, and the  planet. The objectives of all sustainable development programs must be measured, and the results are to be reported in and outside the organization. Stakeholders and society need to be  assured independently in that such measures are recorded accurately and in timely fashion  before being reported. There are opportunities for internal auditing to contribute to its  independent and objective assurance services as an auditor as well as a consultant and  teacher. Such a contribution can take best-practice internal auditing to a high level of added  value. The internal auditor is a vital conduit to the creation of trust.  The internal auditor contributes to a number of corporate social reporting (CSR) and  sustainability issues by keeping management updated on the aspects of operational and  compliance issues, which is part of their core function, as well as brand management audits  and through participation in the stakeholder dialogue process. Furthermore, the increasing  importance of CSR and sustainability and its impact on risk management bring additional  challenges involving the control environment, including the provision and installation of  effective management and reporting systems, which will provide clarity and transparency,  and therefore trust. The internal auditor has an integral role in determining the materiality of  the content of the CSR and sustainability report. This is a responsibility that can only increase  with the burgeoning of CSR and sustainability reports, both in volume and size of content.  Today, internal audit function that is the most important factor in creating sustainable value  to improve the value of the company and firm performance is important to correct  implementation and to be sustainable. Therefore, enterprises should assign enough  importance to internal auditing and should pay attention to create a sustainable audit system.  The aim of this study is to investigate the system of sustainable internal audit which is the  essential element for sustainable development and corporate social reporting.  Keywords: Corporate Social Reporting, Internal Auditing, Sustainable Development,  Corporate Social Responsibility, Sustainable Management Systems.</text>
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                    <text>1st International Conference on Foreign Language Teaching and Applied Linguistics
May 5-7 2011 Sarajevo

The role of language in the process of social integration:
from the ancient Cena Trimalchionis to the contemporary world.
Maria Elena Galaverna
Università degli Studi di Parma, Italy
mariaelena.galaverna@studenti.unipr.it
Abstract: The Ancient World melting pot is not so different from the globalized
contemporary society, in which various people and languages are constantly meeting each
others. In particular, language still plays a leading part in the process of social
redemption, integration and cultural identity formation. This fact provides us a prominent
opportunity to compare these two backgrounds, noticing how the hic et nunc could help
explaining the past, which, in turn, could improve our analysis of the present. The
proposed contribution intends to apply some of the most known linguistic models on a
Latin literary text, the famous Cena Trimalchionis in Petronius‘ Satyricon, in order to
investigate its sociolinguistics implications. This system can frame a further
understanding of the passage, which gives back the possibility to outline some evergreen
rules about the relationship between the governing and the emerging class. As the Cena
shows, freedmen, who accorded a high prestige to Latin, aimed to imitate it; yet, they
were at the same time also bound to their mother tongue. Their linguistic choices reveal
both their wishes and their limits. According to this view, a good use of language, with
the consequent sense of being member of a group, granted – and still grants nowadays – a
privilege path towards emancipation to foreigners and lower classes. This presentation
aims to give some examples on the different levels of communication.
Key words: immigration‘s sociolinguistics aspects, actuality of ancient culture, social
redemption and integration, cultural identity formation, linguistic prestige and loyalty.

Introduction
A parallel reading of an ancient text with the contemporary society, although they are very far from each
other, however, could offer many consonances on a linguistic level: the background changes, but the dynamics of a
linguistic phenomenon remain unchanged. This type of reading helps to understand the present as well as the
Ancient World, offering new guidelines to interpret the text.
This working hypothesis is the starting point of the following contribution, which aims to study the role of
language in the process of social integration, applying some of the most known linguistic models on a Latin literary
text, the famous Cena Trimalchionis in Petronius‘ Satyricon.
This is a sort of experimental first realistic representation – as Auerbach (1956) 33 notes – because the
characters, who do not coincide neither with the author nor with the mock narrator, are talking about what they see
and think and they do that using their slang. The Cena expresses a new subjectivity because Petronius describes a
sort of objective popular everyday environment through the subjective process. Therefore, it presents sociolinguistic
cues to investigate.

Language patterns applied
Communicative Competence
Every freedmen‘s word and action will be considered as a communicative act. The assessment of each one
will be coherently based on the model of Communicative Competence theorized by Freddi259and provided below.

259

The reproduced graph is sourced from Freddi (1999), but this model of communication had already been studied by the same
author (Freddi 1979; 1994).

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Ling = linguistic competence
SocioLing = sociolinguistic competence
ParaLing = paralinguistic competence
ExtraLing = extralinguistic competence

Communicative competence includes four integrated skills: linguistic, sociolinguistic, paralinguistic and
extralinguistic. First of all, speakers must recognize and produce grammatically correct sentences and therefore
master all the three levels of language (phonology, morphology and syntax, lexicon). Secondly, sociolinguistic
competence concerns diatopic, diastratic, diaphasic and diachronic language varieties, because speakers must also
use appropriate codes for the socio-cultural context. Finally, they must control the prosodic elements (fluency,
speech rate, pitch, stress, use of pauses), which are not strictly relevant to the linguistic level but essential to the
communication, and non-verbal codes, which are used along with language or as a replacement for it. The latter ones
include kinesics (body motion, gesture and facial expressions), proxemics (distance or space), artifacts (clothing,
jewels, cosmetic aids) and sensory skills.
A good communication needs also two higher-level competences: the semiotic-cultural one, whereby the
communicative act is effective and consistent with the cultural scene in which it takes place, and the textual one,
because we communicate through texts, which are extended linguistic sequences with a specific purpose and a
coherent internal structure. At last, there is an important subordinate competence, the metalinguistic one, whose
object is the thinking on the language.

Interlanguage
According to the literary and epigraphic sources, the Roman Empire involved various people and languages
and its social fabric was very complex. Despite the hierarchical structure, there was a real upward social mobility
both in Rome and the provinces, as Alfôldy (1987) 206-207 shows. This opportunity of emancipation led foreigners
and lower classes to imitate upper classes education and modes of speech: Latin was the language of the State and of
the governing class and it became the most prestigious one260. However, the natural loyalty of the emerging class to
their native language – most of all Greek – and their lack of liberal education produced an imperfect linguistic and
cultural acquisition. The Cena, which probably took place in a provincial town in Campania261, offers a meaningful
picture of this attitude staging some upstarts, whose names reveal a humble foreign origin262, opposed to the
educated guests.
The same situation characterizes the globalized contemporary world, in which speakers always need to find
appropriate language forms and features to their purposes. Alongside conditions of bilingualism and diglossia, they
often settle the mixture of languages taking on a new code: they leave the less influential language varieties in the
context in which they live, using the one in which they recognize a cultural superiority263. They start a second
language learning (L2), because of its favourite role in the process of social redemption, integration and cultural
identity formation. Yet, they still remain bound to their first language (L1), the mother‘s one, and this implies many
interferences.
For these reasons, freedmen‘s language in Petronius‘ Satyricon reveals the same features of an
interlanguage, which is a language developed by a speaker, who already has its own natural language, when he starts
to learn a second language. The schema reported here is taken from Freddi (1994) 76.

260

About the spread of Latin in the Empire and its consequent learning as L2 see Banfi (1991) 84.

261

The exact place is controversial, but it is certainly a Graeca urbs – as it is defined in the text (81,3) – in southern Italy,
probably in Campania. See Petersmann (2000) 84-86.
262

As Priuli (1975) 25 explains, all other freedmen have a non-Latin and typical of lower condition name, excepted Fortunata,
Scintilla, Primigenius and Proculus, which are anyway Latin names of humble origin.
263

The relationship between language and power is well-defined by Heller (1995) 159.

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L1
L2

Interlanguage
It is a personal grammar, because it depends on the assumptions that the speaker has made about the
operation of the L2; it is temporary, because he aims to achieve a full acquisition of the L2; finally, it is dynamic,
because it is constantly modified on the line L1,L2.
Chomsky‘s generative grammar, which provides, below the superficial differences, a universal grammar as
a mental and biological equipment, allows us to identify universal mental processes in language learning. This
implies that the elements of a second language learning are almost identical, regardless of the language.
Most errors are due to the interference mechanism: second language learners compare it with their mother
tongue and this fact can both help and damage the learning process distorting the marks of the L2. Most of them are
morphosyntactic, but they can also concern the phonology and the lexicon. Others can be related to physiological
and psycho-emotional factors, which are the subject of psycholinguistics. In general, the awareness of these errors
can be an incentive to improve or cause a fall-back of speech on more familiar codes becoming a source of shame.
Analogy, which appeals to well-known forms, is one of the main features of the interlanguage, since
speakers are supported from a regular basis (Astori 2007-2008 118). In contrast, hypercorrectness is very common,
because they try to use elegant forms, even when not required, to demonstrate their control over the language. Yet,
code-switching, borrowing, calque and neologism are frequent. It is a very concrete language and often controls the
micro-language, but not the conventional expressions. Simplification is usual, as evidenced by the frequent use of
modal verbs and the decomposition of a word into its primitive constituents.

Analysis of freedmen‘s acts
In the Cena Trimalchionis, the master of the house, Trimalchio, and the other freedmen clash with the
narrator Encolpius and the other educated characters. It becomes a show – with discussions, performances, dances,
music, enormous dishes and unexpected twists – in which freedmen flaunt their wealth, their social redemption and
their integration into the upper-classes of society. Their purpose involves every aspect of communication, but it
always reveals its limits: they are parvenu and the scholastici laugh at them because of their imperfect use of the
rules. Examples of their attempts will be shown according to the different levels of Communicative Competence.264

Linguistic level
[58,7] «Athana tibi irata sit, curabo, et &lt;ei&gt; qui te primus ―deuro de‖fecit. Non didici geometrias, critica
et alogas menias, sed lapidarias litteras scio, partes centum dico ad aes, ad pondus, ad nummum. [8] Ad
summam, si quid vis, ego et tu sponsiunculam: exi, defero lamnam. Iam scies patrem tuum mercedes
perdidisse, quamvis et rhetoricam scis. Ecce ―qui de nobis longe venio, late venio? Solve me‖. [9] Dicam
tibi, qui de nobis currit et de loco non movetur; qui de nobis crescit et minor fit. Curris, stupes, satagis,
tamquam mus in matella […]».265
The libertus Hermeros is talking, in an outburst of rage against Ascyltos and Giton, who are laughing at him
and his colleagues. This is an advantaged communication context in order to analyze freedmen‘s language, because
in those moments they lose the control and make many errors, which follow the interlanguage pattern outlined.
In this case, according to the classification of Boyce (1991) 46-54, we can see phonological peculiarities,
like the doric form Athana, typical of the south Italian speech, and one syncopated form, lamnam, which is widely
used in colloquial popular language. From a morphosyntactic point of view, there are several irregularities. Indeed,
instead of quis nostrum, he uses qui de nobis thrice: here the partitive genitive is replaced by a prepositional
construction, according to the simplification of syntax of the cases, and the interrogative pronoun quis is confused
with qui. Yet, according to the same tendency, there is the simpler use of indicative (currit, movetur, crescit, fit) in
indirect questions, where the literary language employs the subjunctive, and the present defero is employed in place
264

The critical edition used is edited by Mùller (1995 4), the translation by Michael Heseltine (1913).

265

[«I will bring down the wrath of Athena on you and the man who first made a minion of you. No, I never learned geometry,
and criticism, and suchlike nonsense. But I know my tall letters, and I can do any sum into pounds, shillings and pence. In fact, if
you like, you and I will have a little bet. Come on, I put down the metal. Now I will show you that your father wasted the fees,
even though you are a scholar in rhetoric. Look here: ―what part of us am I? I come far, I come wide. Now find me‖. I can tel l
you what part of us runs and does not move from its place; what grows out of us and grows smaller. Ah! You run about and look
scared and hustled, like a mouse in a pot»].

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of the future. About the lexicon, there are a diminutive, sponsiacula, which is common in vulgar speech, and a code

arrived in that Greek city when he was a young slave and he served there forty years, as he tells us; Greek has
obviously an heavy influence on his speech. Finally, the form geometrias used in the plural form could represent an
incorrect use of a word he has learned, whose specific meaning remains unknown to him. In fact, ―he contrasts his
business education and practical literacy with the liberal education of the scholastici‖ (Boyce 1991 91), in order to
affirm again he is proud of his gained status.

Sociolinguistic level
It is very difficult to choose a passage in order to demonstrate the sociolinguistic valence of freedmen‘s
words, because every character has different origins, status and ambitions, which are unavoidably revealed by his
language, which changes according to the context. The following example, a part of the consideration about the
present time of the poor old clothes dealer, Echion, is indicative of the will to speak classical Latin, but also of the
unsatisfactory result.
[45,5] «Et Titus noster magnum animum habet et est caldicerebrius: aut hoc aut illud, erit quid utique.
Nam illi domesticus sum, non est mixcix. [6] Ferrum optimum daturus est, sine fuga, carnarium in medio,
ut amphitheater videat. Et habet unde: relictum est illi sestertium trecenties, decessit illius pater. Male! Ut
quadringenta impendat, non sentiet patrimonium illius, et sempiterno nominabitur. [7] Iam Manios
aliquot habet et mulierem essedariam et dispensatorem Glyconis, qui deprehensus est, cum dominam
suam delectaretur. Videbis populi rixam inter zelotypos et amasiunculos. [8] Glyco autem, sestertiarius
homo, dispensatorem ad bestias dedit. Hoc est se ipsum traducere. Quid servus peccavit, qui coactus est
facere? Magis illa matella digna fuit quam taurus iactaret. Sed qui asinum non potest, stratum caedit. [9]
Quid autem Glyco putabat Hermogenis filicem umquam bonum exitum facturam? Ille milvo volanti
poterat ungues resecare; colubra restem non parit. Glyco, Glyco dedit suas; itaque quamdiu vixerit,
habebit stigmam, nec illam nisi Orcus delebit. [10] Sed sibi quisque peccat. Sed subolfacio, quia nobis
epulum daturus est Mammea, binos denarios mihi et meis. Quod si hoc fecerit, eripiet Norbano totum
favorem. Scias oportet plenis velis hunc vinciturum. [11] Et revera, quid ille nobis boni fecit? Dedit
gladiatores sestertiarios iam decrepitos, quos si sufflasses cecidissent; iam meliores bestiarios vidi.
Occidit de lucerna equites, putares eos gallos gallinaceos; alter burdubasta, alter loripes, tertiarius
mortuus pro mortuo, qui habe&lt;ba&gt;t nervia praecisa […]».266
As Boyce (1991) 82 notes, ―he is an opportunist and frustrated social climber: while he does not hesitate to
attack the wealthy and famous such as Glyco and Norbanus in the most rabid and venomous fashion once they have
been disgraced and their fortunes have declined, he displays a cloying obsequiousness and even affects to be on
intimate terms with those who are currently in power, such as Titus and Mammea‖. Therefore, he wants to hide his
lower-class origin and, with regard to language, he uses hyperurbanisms, like neuter in place of masculine (nervia)
and deponent in place of active (delectaretur). However, as his political judgment is based only on popular
materialistic opinions about gladiatorial combats, banquets and money (Ciaffi 1955 139), from a linguistic point of
view, ―in an attempt to compensate for the popular tendencies in his speech, he commits solecisms of the opposite
sort‖ (Boyce 1991 83).
Moreover, despite the effort, his language is characterized by a high number of vulgarisms (Boyce 1991 4654), which reveal once again his origin and upbringing, marking his exclusion from the upper circles: the
266

[«And our good Titus has a big imagination and is hot-blooded: it will be one thing or another, something real anyway. I know
him very well, and he is all against half-measures. He will give you the finest blades, no running away, butchery done in the
middle, where the whole audience can see it. And he has the wherewithal; he came into thirty million when his father came to
grief. If he spends four hundred thousand, his estate will never feel it, and his name will live for ever. He has already col lected
some clowns, and a woman to fight from a chariot, and Glyco‘s steward, who was caught amusing Glyco‘s wife. You will see the
crowd quarrel, jealous husbands against gallants. A twopenny-halfpenny fellow like Glyco goes throwing his steward to the
beasts. He only gives himself away. It is not the slave‘s fault; he had to do as he was told. That filthy wife of his rather deserved
to be tossed by the bull. But a man who cannot beat his donkey, beats the saddle. How did Glyco suppose that a sprig of
Hermogene‘s sowing would ever come to a good end? He was one for paring the claws of a kite on the wing, and you do not
gather figs from thistles. Glyco? Why, Glyco has given away his own flesh and blood. He will be branded as long as he lives, and
nothing but death will wipe it out. But a man must have his faults. My nose prophesies a good meal from Mammaea, twopence
each for me and mine. If he does, he will put Norbanus quite in the shade. You know he will beat him hands down. After all, what
has Norbanus ever done for us? He produced some decayed twopenny-halfpenny gladiators, who would have fallen flat if you
breathed on them; I have seen better ruffians turned in to fight the wild beasts, He shed the blood of some mounted infantry tha t
might have come off a lamp; dunghill cocks you would have called them: one a spavined mule, the other bandy-legged, and the
holder of the bye, just one corpse instead of another, and hamstrung»].

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pronunciation with o of the diphthong au (plodo); the morphological change of gender of stigma, treated as a first
declension feminine noun, and of amphiteater, whose transformation from a neuter noun to the masculine does not
surprise, if we advert to the universal language principles; vinciturum (from vinco) for victurum, which could be
confused with the past participle of vivo, according to the tendency to simplify irregularities using analogical
formations; quos si sufflasses, where the intransitive verb is used with the accusative; many syntactic errors, similar
to those seen before in Hermeros language (occidit de lucerna equites; subolofacio, quia nobis epulum daturus est;
eripiat; vixerit); neologisms, like the compounds burdubasta and loripes, and a borrowing, zelotypos &lt;

 (Cavalca 2001 181-182). Finally, he frequently uses proverbial expressions (qui asinum non
potest, stratum caedit; ille milvo volanti poterat ungues resecare; colubra restem non parit) and some insults, like
Glyco‘s wife as a filix and a matella, which represents an emotional outburst which is typical of the Lateinische
Umgangssprache (Hofmann 19852 220).

Paralinguistic level
Few information come from the work about paralinguistic elements, because this is a written text and
therefore fluency, speech rate, pitch, stress and use of pauses cannot be directly investigated, as in reverse it can be
done with the spoken language. However, there are some narrator‘s remarks and some speeches which would seem
to provide such an opportunity. For example, the following joke is very useful:
[41,7] Ad quem sonum conversus Trimalchio «Dionyse» inquit «liber esto». Puer detraxit pilleum apro
capitique suo imposuit. [8] Tum Trimalchio rursus adiecit: «non negabitis me» inquit «habere Liberum
patrem. Laudavimus dictum [Trimalchionis] et circumeuntem puerum sane perbasiamus ».267
In this passage, the ambiguity of non negabitis me habere Liberum patrem can be understood only by
assuming an intonation, which would highlight the word Liberum with appropriate pauses. In fact, it is both the
adjective of patrem, with reference to Trimalchio as ingenuus, and the appellative of the Italic Dionysus Pater,
whose figure is drawn from the action: the freedman has just freed his slave, Dionysus, who was miming the
different epithets of the god (Bromius, Lyaeus, Euhius) (Gaide 1993 251-253).

Extralinguistic level
Also the non-verbal communication is governed by a sort of ―grammar of acts‖, which should be observed.
The following example concerns the use of clothes:
[32,2] Pallio enim coccineo adrasum excluserat caput circaque oneratas veste cervices laticlaviam
immiserat mappam fimbriis hinc atque illinc pendentibus. [3] Habebat etiam in minimo digito sinistrae
manus anulum grandem subauratum, extremo vero articulo digiti sequentis minorem, ut mihi videbatur,
totum aureum, sed plane ferreis veluti stellis ferruminatum. [4] Et ne has tantum ostenderet divitias,
dextrum nudavit lacertum armilla aurea cultum et eboreo circulo lamina splendente conexo. 268
Thus Trimalchio introduces himself to his guests, when he is entering for the first time in his triclinium: he
wears gaudy clothes and some jewels, exhibited to show his wealth. Indeed, all the freedmen believe that richness is
the main way to be admitted to the upper classes. Trimalchio reveals he knows the rules to use those objects: instead
of the golden ring on the ring finger of his left hand, which he could not use, because it was distinctive of the
knights, he wears surrogates with the same value. He finds gimmicks to mask his diversity, like the enormous gilt
ring on the little finger, the precious bracelet and the little ring against the evil eye on the ring finger.

Semiotic-cultural level
[71,12] «[…]‖C. Pompeius Trimalchio Maecenatianus hic requiescit‖ […]».269

267

[Trimalchio turned round at the noise and said, «Dionysus, rise and be free». The boy took the cap of freedom off the boar,
and put it on his head. Then Trimalchio went on: «I am sure you will agree that the god of liberation is my father». We applauded
Trimalchio‘s phrase, and kissed the boy heartily as he went round].
268

[His head was shaven and peered out of a scarlet cloack, and over the heavy clothes on his neck he had put on a napkin with a
broad strip and fringes hanging from it all round. On the little finger of his left hand he had an enormous gilt ring, and on the top
joint of the next finger a smaller ring which appeared to me to be entirely gold, but was really set all round with iron cut out in
little stars. Not content with this display of wealth, he bared his right arm, where a golden bracelet shone, and an ivory bangle
clasped with a plate of bright metal].
269

[―Here lieth Caius Pompeius Trimalchio, freedman of Maecenas‖].

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In this part, Trimalchio is giving the instructions for his testament, tomb and epigraph, and he is using a
rather high-flown language, because of the importance of these things in Roman society, according to Magnani
(19972) 138.
The sentence provided above is the actual inscriptio, which should have been engraved on his tomb and it
aims to be perfectly appropriate to the socio-cultural background. He takes on the tria nomina, which from Caesar‘s
age identified the Romans free citizens, but he adds a second famous cognomen to increase the feeling of nobility
and greatness, betraying the expectations. Also the entire inscription meets the same goals: it is traditionally included
in an architectural structure with a figurative element, it remembers Trimalchio‘s office of sevir in absentia and his
Roman values of pietas, fortitudo and fidelitas. At the end, it presents the address to the viator, so that the dead will
live in his memory.

Textual level
A text must respect the seven standards of textuality to be correct. According to De Beaugrande – Dessler
(1984), those are cohesion, coherence, intentionality, acceptability, informativity, situationality and intertextuality. If
one or more of them fail, the communication can be compromised. This happens several times during the Cena, as
the following example shows.
[59,3] […] Mox silentio facto «scitis» inquit «quam fabulam agant? Diomedes et Ganymedes duo fratres
fuerunt. [4] Horum soror erat Helena. Agamemnon illam rapuit et Dianae cervam subiecit. Ita nunc
Homeros dicit quemadmodum inter se pugnent Troiani et Tarentini. [5] Vicit scilicet et Iphigeniam, filiam
suam, Achilli dedit uxorem. Ob eam rem Aiax insanit et statim argumentum explicabit». 270
Trimalchio‘s speech is clearly cohesive, coherent, informative and it has a situational relevance, because he
is translating the lines of Homeristae Graecis. His intent is also proper, because he wants to compare the mythic
Ajax with the chef Ajax, who soon after will slice a boiled calf. But it fail in acceptability and intertextuality,
because the recipients have a more correct cultural heritage and they will find incomprehensible deformations of the
mythical tradition.

Metalinguistic level
There are two moments in which the freedmen make some remarks about their language, opposed to the
Latin of the educated characters, and in both of them they feel the same sense of inferiority. However, the reactions
are different:
[46,1] «Videris mihi, Agamemnon, dicere: ―quid iste argutat molestus?‖. Quia tu, qui potes loquere, non
loquis. Non es nostrae fasciae, et ideo pauperorum verba derides. Scimus te prae litteras fatuum esse
[…]».271
Against the rhetorician Agamemnon, Echion admits to speak incorrectly (as the active form of loquor and
argutor, the change of pauperorum from the third to the second declension and prae with accusative show), but this
perception lead him to attempt a classical Latin learning. Later, indeed, his aggression is attenuated and his tongue
tries again to imitate them, qui possunt loqueri, to be part of their group.
Niceros, on the contrary, refuses to stand against the educated characters and tells them a popular folktale,
with a lower-class Latin:
[61,4] «[…] Itaque hilaria mera sint, etsi timeo istos scholasticos, ne me [de]rideant. Viderint: narrabo
tamen; quid enim mihi aufert qui ridet? Satius est rideri quam derideri».272

Conclusions
270

[Soon there was silence, and then he said, «you know the story they are doing? Diomede and Ganymede were two brothers.
Helen was their sister. Agamemnon carried her off and took in Diana by sacrificing a deer to her instead. So Homer is now telling
the tale of the war between Troy and Parentium. Of course he won and married his daughter Iphigenia to Achilles. That drove
Ajax mad, and he will show you the story in a minute»].
271

[«Now, Agamemnon, you look as if you were saying, ―what is this bore chattering for?‖. Only because you have the gift of
tongues and do not speak. You do not come off our shelf, and so you make fun of the way we poor men talk. We know you are
mad with much learning»].
272

[«Well, it shall be pure fun then, though I am afraid your clever friends will laugh at me. Still, let them; I will tell my story; what
harm does a man‘s laugh do me? Being laughed at is more satisfactory than being sneered at»].

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�1st International Conference on Foreign Language Teaching and Applied Linguistics
May 5-7 2011 Sarajevo
This work is intended as a further example of the fruitful dialogue between classicism and the present. In
fact, according to the modern sociolinguistic and cognitive studies, we can analyze the language shift of the Ancient
together with the contemporary World in the process of social integration. The former studies 273 prove that the
mechanisms are the same over time, the latter that they are universal, regardless of the language.
As the analysis of the text shows, on one hand the language of the freedmen can be interpreted as an
interlanguage which tends to the upper-class Latin but contains a lot of errors due to the interference mechanism and
to the creativity of the speakers. On the other hand, their attempt to integrate themselves shows evergreen rules:
outcast people try to imitate every kind of feature of the governing class in order to emancipate themselves, but they
end up exaggerating or damaging them. Their communicative acts often mark the difference and reveal what they
want to hide. However, their perceptions, their aims and their motivations can improve the outcome. According to
this view, a good use of language still plays a decisive role.

273

See Giacalone Ramat (2000) 60 in her consideration about William Labov‘s statement ―use the present to explain the past‖.

803

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May 5-7 2011 Sarajevo
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804

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                    <text>The Role of Local Authority in Tourism Development in Vlora
Landsite Mukluk
Epoka University
Albania
linditamukli@gmail.com
Abstract: Economic and social opening of Albania after 1991, gave a new momentum to the
country's tourism development particularly the one to the coastal areas, using individual
private investment, which structured small-scale tourism, coupled with cleavage to extreme
local landscape. Governments after 1991, rightly considered tourism development as a big
opportunity on developing the country in a short term.Local authorities have many direct and
indirect mechanisms at their responsibility and disposal to influence the development of
tourism as they are providers of public goods and services, supervisory bodies of economic
activities, builders of public infrastructure, responsible for economic development and
accountable for the natural environment. The local authorities have focused on the distinctive
challenges of governance for sustainable developments.
This article discusses the development of the tourism industry in Albania and Vlora. It calls
for both local and national agencies, and respective stakeholders to support the idea where
tourism is an important sector in the process of economic development. The study is based on
a structured survey which was developed in Vlora. The questionnaires were structured in
such a way that it contains the information needed to answer a hypothesis: “The Local
Authority play an important part on tourism development in Vlora”.For processing
questionnaires, SPSS software (descriptive Statistics, Frequencies, Compare Means, and
Independent Samples T-test) and Mega Stat (Hypothesis Test, Compare Two independents
Groups) were used.In Vlora, tourism is one of the many driving forces promoting the
directions and opportunities for local developments. The research question of this article is
whether tourism can be sustainable. The true proof of “sustainable tourism” will be the
sustainable development of local communities which are tourist destinations as the time is
right for more focus on this challenge.
Keywords:Vlora, Albania, tourism, sustainable tourism, local authorities, local developments,
policy making.

73

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                <text>Albania is a country which has passed through a difficult transition period and surely this period has lead to  some inevitable effects on the Albanian economy. The high inflation and the rapid decline of the economy  contributed to the crisis which happened in 1997. After 1998 the economic progress and the inflation  reduction were enabled by the fiscal and monetary policy strengthening. Much progress is made and this is  seen in the continuous increase of gross domestic product growth rate.  This research paper will analyze the relationship between term structure of interest rate and the two key  variables which are inflation rate and GDP growth rate. The challenging correlation of these variables has  been discussed by many economists. Some of the authors could introduce their yield curve model without the  intervention of macroeconomic variables, while some others considered macroeconomic factors such as  inflation rate and GDP growth rate in explaining the model.  The focus of this paper is how the two key variables affected the interest rate. From the regression analysis, it  is found that the macroeconomic variables explain about 16.3 % of the variation in the interest rate which is  not a high percentage. These variables are not statistically significant and they can be drop out of the  regression line.  Keywords: interest rate, inflation rate, GDP growth rate.</text>
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PeerReviewed</text>
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                    <text>The Exchange Rate in Albania and its Connection with Import-Export
Alba Cani
Epoka University
Albania
acani10@epoka.edu.al
Abstract: Recently, trade agreements among different countries are becoming more and more
important. Exchange rate and its volatility are important elements taken into consideration
when these trade agreement and exchanges are done. The history of Albania has had crucial
developments in different periods. These changes and developments have had an impact not
only in policy making process but also in the way how economic policies are compiled.
Among the most important economic actions undertaken in the transition period is the
adoption of flexible exchange rate. This paper is an attempt to explain the relationship that
exists through the exchange rate and import-export as this is one of the traditional methods
for long-term analysis taken into consideration in studying this connection. The aim of this
research paper is to analyze the way how these variables are connected to each-other and to
explain which factors have influenced in the volatility of exchange rate in these years in
Albania. This study examines the effect of exchange rate volatility in imports and exports by
using multiple regression analysis with exchange rate as dependent variable and trade
balance, remittances, government spending as independent variables. Thus, an empirical
method is used in order to prove whether there is a relationship between the exchange rate
and its variables and import-export. Moreover, a detailed analysis of exchange rate volatility
on trade balance connection is included. All the data are taken by Bank of Albania, Instat and
World Bank and all the values of variables are in million Albanian Leke. The analysis is
based on respective values of above mentioned variables for the period from 1996-2010 for
Leke-Dollar exchange rate and from 1999-2010 for Leke-Euro exchange rate. The findings of
this study conclude with the result that exchange rate volatility does not have significant
impact on import because some of the products that Albania imports are basic products
regarding the inelastic demand of these products. On the other hand, exchange rate volatility
affects exports as exports are directly related with exchange rate volatility.
Keywords:Exchange Rate, Volatility, Import, Export, Regression Analysis, Trade Balance,
Government Spending.

86

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                <text>The Role of Macroeconomic Variables on the Yield Curve Model: Case of Albania</text>
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                <text>LAÇI, Besjana
RYSKULOV, Urmat</text>
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          <element elementId="94">
            <name>Abstract</name>
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              <elementText elementTextId="5649">
                <text>Albania is a country which has passed through a difficult transition period and surely this period has lead to some inevitable effects on the Albanian economy. The high inflation and the rapid decline of the economy contributed to the crisis which happened in 1997. After 1998 the economic progress and the inflation reduction were enabled by the fiscal and monetary policy strengthening. Much progress is made and this is seen in the continuous increase of gross domestic product growth rate.    This research paper will analyze the relationship between term structure of interest rate and the two key variables which are inflation rate and GDP growth rate. The challenging correlation of these variables has been discussed by many economists. Some of the authors could introduce their yield curve model without the intervention of macroeconomic variables, while some others considered macroeconomic factors such as inflation rate and GDP growth rate in explaining the model.    The focus of this paper is how the two key variables affected the interest rate. From the regression analysis, it is found that the macroeconomic variables explain about 16.3 % of the variation in the interest rate which is not a high percentage. These variables are not statistically significant and they can be drop out of the regression line.    Keywords: interest rate, inflation rate, GDP growth rate, level, slope, curvature.</text>
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                <text>International Burch University</text>
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                <text>ISSN 2303-4564     </text>
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