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1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
Global Financial Crisis and Its Impact on Balkans
Ergin ĐSMAĐL
President of COFER, Macedonia
e.ismail@coferweb.org
Semi ŞAHĐN
Finance Director of COFER, Macedonia
s.sahin@coferweb.org
Abstract: The aim of writing this paper is to reveal that the implication of the crisis to the
western Balkans has been not of a sort of financial crisis, but an economic turbulence which
has occurred as a result of lack of demand in the world markets to the western Balkan
products and falling sources of finance. Expansionary fiscal policies on top of external trade
deficits growing at record levels, calls into question the ability of the western Balkan
economies to finance the needs, that in turn increases their vulnerability and that may lead to a
possible financial crisis in future if the global financial crisis continues to sustain until 2010.
What is expected to ease the conditions is the seasonally strong increase in construction, food
exports and private transfers during the spring and summer seasons, expected to close the
gaps that are being established through growing external trade deficits. Increase in
construction business, growing food exports and raising remittances may offset vulnerabilities
of the economies and may limit further economic and financial crisis in the region.
Keywords: global financial crisis; Balkans; growth; unemployment; remittances
Financial Crisis in the World, Economic Crisis in the Balkans
What started as a global financial crisis has become an economic crisis. The world financial crisis
emerged from a property bubble and a credit boom. Bad debts soared and banking sector in the developed
economies became insolvent. The implication of the crisis to the western Balkans has been not of a sort of
financial crisis, but an economic turbulence which has occurred as a result of lack of demand in the world
markets to the western Balkan products and falling sources of finance. Investments, remittances, industrial
production, foreign exchange reserves and employment rates have fallen. As a result, growth has slowed down.
Expansionary fiscal policies on top of external trade deficits growing at record levels, calls into question the
ability of the western Balkan economies to finance the needs, that in turn increases their vulnerability and that
may lead to a possible financial crisis in future if the global financial crisis continues to sustain until 2010.
The governments of the region of the western Balkans, when the crisis hit in September 2008, argued
that they were immune to the crisis. However, as their export-oriented economies began to slump in the autumn
of 2008 due to the slid in the world commodity prices, which resulted in tens of thousands of citizens of western
Balkan countries loosing their jobs, the governments of the region became more open about the difficulties of
their economic situation, although continuing to argue that the effects of the financial crisis are least to be felt in
western Balkans in comparison with other regional economies of Europe such as that felt in Iceland, Baltic states
or Ukraine. The culprit many of the governments have now settled on is the world out of Balkans. Even wider
publics took comfort of this argument due to relatively low exposure of the local economies to the world
financial markets.
Although the governments continue to predict that the economies would show growth and small
contraction in 2009, the economic indicators show that the economies are in some degree of trouble at the
moment with industrial output, foreign investment and remittances falling and unemployment rising.1 Growth
forecasts are down across the region from 5 to 3%, investors are slowing projects and governments are drawing
up rescue plans.2 Independent economists think that 3% growth of GDP for 2009 is wildly optimistic. Depending
on the world manufacturing and commodity prices, they could show growth by 2 or even 1% of GDP.
For the small economies of a scale of western Balkans that have boomed for the past seven-eight years,
following the end of conflicts in the region in 2001 - that last one being the conflict of Macedonia in 2001 - with
1
2
The Economist, "The Balkans: A year in the life of Kosovo", 14 February 2009, p. 14.
The Economist, "The western Balkans: A stuck region", 14 February 2009, p. 36.
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annual average GDP growth reaching 5%, economic slowdown and contraction in GDP that has started to be
seen starting from the autumn of 2008 is a particularly harsh blow to western Balkans. The whole region, except
Serbia and Croatia, has escaped the global financial crisis however it has run into economic crisis due to the
recession in its export markets, including EU. As small open economies the western Balkan countries are
uncomfortably exposed to the world crisis and particularly to EU as their trade with the EU member states
comprises their largest trade volume. Since the global financial crisis hit in September 2008 growth has turned to
contraction and unemployment is mounting in the region. Also, any lingering hopes that the western Balkans
might escape relatively unscathed from the global financial storms were dashed when managers of the foreign
banks in the region, mainly those of Austria and Greece, sought support from the international finance
institutions. This shows that, although the economies are small and relatively well protected, they are exposed to
the global financial crisis that has been replicated in the region in the form of economic crisis.
The falling manufacturing and commodity prices in the world markets are causing problems. Depended
on steel and metal exports, the region has been hit hard by the global slump in commodity prices and by the
expensive imported electricity, sending metal prices into a tailspin. The price of the metals has fallen by almost
two-thirds since mid-2008 leading to slowdown in the region's economies. More than a fifth of economic output
and employment are based on exports, making them particularly vulnerable to a fall in global growth and trade.
Manufacturing and exporting economies are grinding to a halt, as demand across the world melts away. The
western Balkan economies contracted further in last quarter of 2008, as a dispute between Russia and Ukraine
over gas prices reduced energy supply to the region and forced the countries' heavy industries to go slow, cutting
production or even halting assembly lines. For example, Silmak, a significant producer of ferro-nickel in
Jegunovce, in the western part of Macedonia, has cut production and has laid 700 workers due to the drastic fall
of the ferro-nickel's price in the world markets.1 The nearby brick factory Kiro Kucuk in Veles, in the central
part of Macedonia, also exemplifies the gravity of the setback. On 1 March 2009 the employees turned up for
their final day's work. The factory will not reopen until the economy recovers.2 A similar story could be told in
many countries of the region. Macedonia is not alone depended on exporting metallurgical industries. Serbia has
suffered far more as global demand for the goods in which its industry specialises has evaporated. For example,
US Steel, one of Serbia's leading exporters, closed one plant.3 These examples are reflection of the data released
for January 2009 that industrial production, which accounts for a fifth of total value added in Macedonia4 and
Serbia has plummeted by 17%, its steepest fall in years.5 The Macedonian State Statistics Office reported that the
local companies have been operating by using 50% of their capacities in the course of January 2009 and their
situation has deteriorated on a monthly basis, which has led to a drop in employment rate as well as a large fall in
production due to the reduced foreign demand for Macedonian products, insufficient domestic demand, uncertain
economic situation and the financial problems. These are hotbeds that might be transferred to other economic
sectors, such as the textile and leather industry and to the construction sector, which comprise large share in the
country's GDP.
The gloom reflects growing worries about underlying weaknesses that make the countries especially
vulnerable to recession happening in the EU and other economies to which Balkan economies are depended.
So companies have announced big lay-offs as demand has fallen and factories have closed.6 The official
unemployment figure of Macedonia already stands at 33% (unofficially it is probably 35% or more) and is set to
rise as the new basic salary estimates will only count employed those who pay social security benefits.
Unemployment rate in Bosnia and Herzegovina and in Kosovo are more than 40%. The unofficial
unemployment rate is, however, much higher and many who say that they have jobs are in fact on indefinite
unpaid leave. The economists forecast that unemployment region-wide will rise. Most of that rise will be the
result of fall in trade (many exporting companies have laid off workers), and due to declining investments.
Coffee streets from Knjez Mihajlova in Belgrade to Kej Vardar in Skopje to Bash Charshija in Sarajevo
are busy during sunlight as young people, forming more than 50% of the unemployed force in the region, sip
their coffees. Unemployment rates are soaring and offices of the Employment Agencies in whole region are full
with people looking for work.
The stock markets have plunged as well. The Zagreb stock exchange index lost 42% during the last
quarter of 2008 and others such as Sarajevo Stock Exchange, dropped by 19% during the same quarter, leading
1
Dnevnik, "Silmak prekina so rabota", 2 Mart 2009, p. 7.
Utrinski, "Rabotnicite od Kucuk izvisija", 3 Mart 2009.
3
European Commission, DG ECFIN, EU Candidate and Pre-Accession Countries Economic Quarterly, 9 January 2009, p.
30.
4
Ibid, p. 10.
5
Utrinski, "Pad na proizvodstvoto za 16.7%", 27 February 2009.
6
International Monetary Fund, "Former Yugoslav Republic of Macedonia: Staff Report for the 2008 Article IV
Consultation", Prepared by Staff Representatives for the 2008 Consultation with Former Yugoslav Republic of Macedonia,
11 November 2008, p. 11.
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to an annual decrease of 67% in 2008.1 The Belgrade Stock Exchange tumbled and its index lost 75% during
2008.2
An important sector that waits to be affected is the real estate market as the credits have gone down and
the borrowers are unable to pay back their monthly loans. The scale of the bubble in the region is as big as in
troubling EU cities. House prices rose further in Belgrade than they did in Tirana. So did commercial-property
prices. As a result, demand for new homes has dried up although prices have remained stable and over inflated,
with Belgrade topping the prices where average residential square meter is sold at 2000 euros. The housing
boom in the region is among the extreme, measured by real price increases and resulting overvaluations. This is
a bubble which is waiting to burst. Another bubble which is waiting to burst is commercial property where office
blocks and shops are overvalued. Both these booms have been fuelled by debt, another reason why the region
looks particularly vulnerable now.
There is much to suggest that the pain is felt most by small enterprises, labelled as small and medium
sized enterprises (SMEs) that are the backbone of the western Balkan economies. SMEs seem especially
vulnerable to the downturn. Many specialise in textile and these are also the products whose orders are the first
to be cancelled when economies slow and companies trim investment. These firms are finding themselves
chronically short of orders and capital.
The governments in the region have launched actions to stimulate their economies. Montenegrin
government launched a plan with significant capital expenditures and other stimulus to businesses at some 10%
of the projected GDP for 2009.3 In November 2008, the Macedonian government unveiled measures worth 5-6%
of GDP.4 Other governments as well have unveiled packages that include extra billions to finance investment,
infrastructure projects, extra benefits for poorer and tax cuts. The central banks as well have joined in tightening
monetary policies and increasing controls of the credit markets. These measures mean the economy may suffer
only a mild downturn. Tightening of control by the central banks has encouraged banks to drastically decrease
the amount of lending. When there are no loans for companies and consumers, the consumption of domestic and
foreign products decreases, leading towards economic stagnation. So officials are also trying to inject cash and
confidence into the banking system, avoiding confidence crisis that in October 2008 hit Albania, Bosnia and
Herzegovina, Montenegro and Serbia where the lack of confidence led to a withdrawal of deposits by
population.5 They have done this in various ways. Croatian central bank has abolished reserve requirements. The
Bank of Albania has limited Banks' exposure towards their foreign parent companies.6 The National Bank of
Serbia has eliminated the tax on savings income to help boost foreign exchange liquidity.7 The Bosnian central
bank has increased the level of guaranteed savings deposits from 3500 to 10.000 euros and the Montenegrin
government has given full guarantee to deposits. The Montenegrin government has also given capital boost to
ailing Prva Banka to allow it to expand landing, especially for small businesses.8
The global crisis has slowed down western Balkans' credit-fuelled boom. Estimates of output have
slumped and currencies have dropped as capital inflows have dried up. The bad debts have raised as local
customers default particularly those that have borrowed in foreign currencies that have since risen relative to
their own. One of the dirty habits from the boom is that as local loan growth outpaced deposit growth.9 There is
likelihood that one or more of the ex-communist Balkan countries will default on its debt. The biggest weakness
lies in a financial system that has combined badly run local banks with loosely overseen subsidiaries of western
ones. Some local banks now depend on their parents' willingness to keep financing them – and those parents
have plenty of problems at home. The Greek government has told its banks to draw back from their lending in
the Balkans. Debt burdens are high today because so much was borrowed in the recent past. This began as a
logical response to declining interest rates, low inflation, rising asset prices and less frequent recessions. Some
countries have an extra problem of big external government debts (in Croatia's case, the gross figure is near 85%
of GDP). For other countries, the strong Euro is a problem; they have pegged their currencies to it.10
Tumbling exchange rates raised the real burden of foreign-currency loans, forced policymakers to keep
interest rates high. However, by boosting exports, a weaker currency can offer a route to recovery. In
Macedonia, by contrast, denar stays strong as the economy slumps, deflation setting in which will lead debts to
grow and possibly banking problems to grow. Possible threat of financial crisis has led the Euro to be seen as a
shelter for western Balkan economies from the storms. The local currencies dinar of Serbia, kuna of Croatia, lek
1
European Commission, DG ECFIN, p. 23.
Ibid, p. 31.
3
Ibid, p. 26.
4
Ibid, p. 10.
5
Ibid, p. 3.
6
Ibid, p. 18.
7
Ibid, p. 31.
8
Ibid, p. 27.
9
The Economist, "Eastern European banks: The ties that band", 21 February 2009, p. 73.
10
The Economist, "Eastern Europe: Argentina on the Danube?", 21 February 2009, p. 14.
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of Albania have lost their value against the Euro. Kuna depreciated by 2.9% and lek 1% vis-à-vis the euro in the
last quarter of 2008,1 where as the Serbia's dinar has lost close to 17% of its value against the Euro in the same
period. The central bank of Macedonia has spent over 50 million euros of its reserves in January 2009 alone,
largest since the introduction of denar in early 1990s, to cushion the devaluation of its currency and avoid public
panic.2 Macedonia will suffer damages if the Euro loses its value in relation to the dollar as it would affect the
Macedonian export to EU markets. The increase of the dollar value will also have negative implications for
Macedonia as the country uses this foreign currency to purchase twice as much as it sells. The value of the Euro
in comparison to the dollar has been declining since autumn 2008. The drop of the value of the Euro with this
fixed course of the denar in relation to the Euro currency will damage the Macedonian economy and de-motivate
exporters primarily exporting to EU states.3 The government in Macedonia also has shredded investor
confidence by calling for decreasing the amounts given to private pension funds.
Recovery is possible only through strong demand in the rest of the world (which is to lack for some
time), that would lead exports to soar, allowing quick recovery. However, today demand is falling rapidly across
the globe and most big developed economies buying Balkans products face simultaneous banking crises. With
demand weak everywhere, the familiar route to recovery is blocked.4 For the largest trading partners of western
Balkan economies, the EU countries, figures that came out in February 2009, showed that Euro-area GDP shrank
at an annualised rate of around 5% in the fourth quarter of 2008. The IMF has forecasted that Euro-area GDP
will decline by 2% in 2009 and barely recover in 2010. Countries with huge current-account deficits are most
exposed in a credit drought. So the hope had been that weaker economies of Balkans would be offset by faster
economic recovery in EU economies and support by the local banks mother banks' in EU. Unfortunately, the EU
economies are facing recession and mother banks and mother countries have asked them to lend first to domestic
businesses and households and not to transfer money to their subsidiaries in Balkans. The Greeks publicly
advised banks to be more prudent about transferring bail-out funds to Balkan subsidiaries.5
The western Balkan countries face a current account deficit this year in average of around 14%.
Nevertheless, the crisis for example has not stopped the Macedonian and Kosovar governments from doling out
billions of euros' worth of cultural projects.
Financial crisis is also having effect on remittances, a large share in GDP of the economies of Balkans.
Foreign workers have been first to be laid off in the western economies. Remittances make up more than a tenth
of the GDP of Balkan economies. Although they are likely to fall as a result of the slumping world economy, as
it has been the case with Albania, where remittances' inflows have declined from 13% of GDP in 2007 to 11% of
GDP in the last quarter of 2008,6 they may be less affected by the world economy.7 It is expected that people
keep the cross border payments going even when their incomes fall. Migration from western Balkans to EU
countries is expected to rise as the borders are getting opened through visa facilitation and liberalisation
programmes. However, this rise will be balanced with the recession in the EU economies where it means fewer
jobs for migrants.
In surveys, the economy has leapt to the top of voters' concerns. Overall the public is scared and
uncertain. So far, the Balkans has escaped the civic unrest seen in the Baltic States, Iceland, or elsewhere.8 There
are not yet signs of discontent, except concerns expressed by politicians and economists. Thousands taking to the
streets to protest against crises in Baltic States and Ukraine have not resembled in Balkans. However, pundits
predict unrest in towns that rely entirely on one ailing factory or industry. But so far the signs are limited.
The middle class in the whole region is under a great threat. The middle class flourished during
communist times. As economy goes into reverse they may well be hit harder than the rich or poor. They work in
export industries so their jobs are unsafe. The other part of the middle class, who are employed in the state
administration, and whose jobs are relatively safe, they have started to borrow, so are hurt by the credit crunch.
To End with a Negative and a Positive Note
The economies of the Balkan region, except those of Serbia and Croatia, have escaped the financial
crisis. However they are facing the biggest economic crisis since 1991, when they left the communism regime.
Corporate profits have collapsed. Big manufacturers' output is down. Metal producers have halved or halted their
1
European Commission, DG ECFIN, p. 7.
Biljana Krstevska, "Stopeni uste 53 milioni evra", Dnevnik, 27 February 2009; Utrinski, "Samo so dobra plata do kredit",
27 February 2009.
3
Abdulmenaf Bexheti, "Experts on Fixed Course of Denar", Skopjediem, 25 February 2009.
4
The Economist, "America's banking crisis: Worse than Japan?", 14 February 2009, p. 76.
5
The Economist, "Charlemagne: Single-market blues", 7 February 2009, p. 30.
6
European Commission, DG ECFIN, p. 19.
7
The Economist, "Remittances: Trickle-down economics", 21 February 2009, p. 74.
8
The Economist, "The western Balkans: A stuck region", 14 February 2009, p. 36.
2
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production. Companies have slashed jobs and investment. Industrial output and employment have fallen at
record levels not seen since 1991.
What is expected to ease the conditions is the seasonally strong increase in construction, food exports
and private transfers (workers remittances) during the spring and summer seasons. These seasonal effects are
expected to close the gaps that are being established through growing external trade deficits. Increase in
construction business, growing food exports and raising remittances may offset vulnerabilities of the economies
and may limit further economic and financial crisis in the region.
385
�
Dublin Core
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279
Title
A name given to the resource
Collaboration of NGOs and Local Governments for a Sustainable Struggle against Urban Poverty in Turkey
Author
Author
ÖZDEN, Kemal
Abstract
A summary of the resource.
Poverty is among the significant issues that the governments should tackle with. This problem has social and cultural dimensions as well as the economic dimension. From day to day, so many international and national bodies apply policies to cope with this question. For the solution of urban poverty, two worldwide tendencies are critical turning points. One of them is that, throughout the world, there is a tendency that central governments delegate some of their duties and responsibilities to the local governments. This delegation of responsibilities requires the delegation of certain financial and administrative resources as well. Otherwise, a delegation of responsibility without necessary resources will result in growing crisis. Delegation of responsibility and resources, at the same time, to the local governments will prepare more successful solutions in coping with the problem of poverty. In general, local governments are closer to the citizens and therefore they may follow the needs and desires of citizens better than the central governments. Consequently, transfer of both responsibility and resources from central to local governments, most probably will solve the urban poverty problem more effectively. The other tendency is increasing role of NGOs in social issues including the elimination of urban poverty. In coping with poverty, local governments and NGOs engage in two kinds of main activities. One of them is the activities that directly produce a surplus value such as career creating courses. The second one is the solution seeking policies such as social aids in kind and in cash such as offering scholarship and free medical services. In this study, a general outlook for the poverty will be drawn and the “culture of poverty” will be briefly analyzed. Later, the policies of local governments and NGOs as dynamic actors in poverty alleviation will be discussed. Lastly, as a case study, a critical challenge to poverty, “Study Halls” established in the most underdeveloped region of Turkey will be analyzed.
Date
A point or period of time associated with an event in the lifecycle of the resource
2009-06
Keywords
Keywords.
Conference or Workshop Item
PeerReviewed
HB Economic Theory
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1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
Entrepreneurship Opportunities and Problems in Indonesia
Selim ÖZDEMĐR
Dr., Department of Business Administration, Qafqaz University, Baku / Azerbaıjan
selim.tx@gmail.com
Abstract: In 2008 when I visited to Jakarta for editorship of the book “Entrepreneurship
Opportunities in Indonesia” two different survey studies with regard to entrepreneurs and
companies were completed. In face to face meetings with company supervisors and official
authorities more detailed information related to this subject was collected. In 2004 while visiting
Malaysia, Singapore and Indonesia during a 6-month academic study, I gathered background
information on these countries, and no doubt that these data had made positive contributions to
these studies.
In this study four main topics were examined: “current potential in Indonesia for foreign
investors”, “opportunities in different sectors”, “potential problems” and “business relations
rules”, which were responded by about 100 company supervisors and government authorities.
Key words: Entrepreneurship, investment opportunities, Indonesia.
Introduction
Indonesia can be considered as one of the richest countries on Earth due to its biological diversity. The
country is located between Asia and Australia, comprised of more than 17,000 islands that stretch 5,000 km
from east to west. Because of its complex geographical make-up and unique biogeographic position Indonesia
has enormous ecosystem diversity, as well as a fascinating history and heritage. In terms of human diversity,
with more than 210 million inhabitants, the country ranks as the fourth most populous nation in the world and
the third largest democratic country. It is also the world’s largest Islamic nation, where a constitutional freedom
to practice other religions sees major groups of Christians, Buddhists, Hindus and other faiths existing side by
side. There are approximately 336 distinct recognized cultures that share more than 250 spoken languages. The
lingua franca, Bahasa Indonesia, was adopted only 77 years ago and is now widely used throughout this vast
land, serving as a means of communication and as a unifying factor. Indonesia is a diverse country and it is
among the culturally richest countries on Earth.1
In addition to this it has enormous mineral, marine and natural resources and it is evident that it ranks
as a major economic force in the region. Following the economic and financial crisis that hit the country in
1997, the Indonesian government recognized the important role of foreign investment in the reconstruction of
the Indonesian economy. During following years, the successive governments carried out legal and regulatory
reforms designed to make Indonesia a competitive destination for foreign direct investment. From the socioeconomic point of view the development of entrepreneurship is very important for Indonesia, where the market
economy is still in the process of development. The Encouragement Plan for Development of Entrepreneurship
approved in 1995 by the president Soeharto is of great importance. By the effects of economical crisis,
increasing level of unemployment caused the state to pay more attention to development of entrepreneurship.
In Indonesia approximately 40 million people are in search of a job. Formulation of such a big number of
unemployed people arise threats for the country such as increasing number of criminals and decreasing the
social welfare. The growth of employment in the country will be possible through the encouragement of
entrepreneurship by the government.2
1. Opportunities and Problems
For Indonesia, which is in a development trend, healthy growth of the socio-economic structure
depends on enterprises, mainly on SMEs. The SMEs share 99% of the total enterprises in Indonesia.3 Parallel to
country’s large territory, there are many problems both in general and specific with regard to placing the
entrepreneurship on the focus of attention. One can assume that in the future such a great country will have big
1
Doing Business in Indonesia, Urbach Hacker Young International Ltd (UHY), Indonesia, 2008, p.4
Selim Ozdemir, “Motivational Factors Influencing Entrepreneurship in Indonesia: An Empirical Study”,
(not published)
3
The Ministry of Cooperative and SME Republic of Indonesia, Press release, 2003. p.1.
2
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enterprises with their important contribution to its development, and also there will be local and foreign
investors which can transform problems to opportunities and can utilize current potential of the country.
The Government of Indonesia has signed contract with 56 countries, including Turkey for the purpose
of protecting foreign investment. Indonesia takes the responsibility of protecting assets of these foreign
investors and allows sending profit dividend to their countries. Indonesia also is the member of MIGA
(Multinational Investment Guaranty Association). In relation with this, the government made a decision on
protecting foreign investments against possible political crisis. Indonesia launched some loosing politics in the
beginning of 1990s, such as decreasing tax rates in foreign trade policy, applying non-tariff barriers. The
Government of Indonesia is decreasing the number of import restrictions and products which are under special
license.
Encouragement items about foreign investors can be listed as follows:
• Foreign enterprise can be formed 100% by foreign share. But in infrastructure this is 95%.
• For foreign investors there isn’t any necessity to sale shares to local companies.
• There isn’t minimum capital amount.
• Foreign investment procedure and confirmation is being completed within 5 days.
• For the purpose of investment, custom taxes for machinery and raw materials have been decreased by
5%.
• The depreciation period in foreign investments is short. Dividend tax is 10%.
Despite the positive developments in the economy, Indonesia has smaller investment environment than
other rival countries in this region, because of bureaucracy, corruption and chaos in country’s law structure.
Although, there are noticed different developments, such as trade mark, copyrights, commercial secrets,
protection of industrial designs, yet there isn’t sufficient protection in this area. Fighting piracy with respect to
patents, trademarks and trade copyrights isn’t be successful. The Trade Mark Rights protects trademarks not
based on first utilization, but first registration. Finally, it can be noticed that commercial secrets are not
protected by the Indonesian laws. For industrial designs and models there isn’t enough protection either.
The Indonesian Government is applying labeling policy for imported food products. According to this
policy, for imported food products there must be used labels in Indonesian language. This application is making
obstacles for Turkish companies which are exporting food products not only to Indonesia, but to other countries.
In some sectors the existence of monopoly impedes development of entrepreneurship on the said sectors. For
example, companies that operate in natural gas sector have licensed rights which allow them to derive benefits
from different advantages, and this situation prevents other companies from entering these sectors.1
2. Entrepreneurship Survey Analysis in Indonesia for Foreign Investors
Doing researches on entrepreneurship in Indonesia is important for foreign investors who desire to
engage in entrepreneurial activities in this country. These studies, which analyze opportunities and problems in
entrepreneurship, will be guidance for the business world. General evaluation according to the survey questions
responded by approximately 100 Indonesian and Turkish entrepreneurs and official authorities are given below.
Four question topics were examined here: “current potential in Indonesia for foreign investors”, “opportunities
in different sectors”, “probable problems” and “rules in business relations” which were responded by about 100
company supervisors and government authorities.
Under the topic of “From the standpoint of foreign investors’ thoughts about current potential in the
country” the given responds were like this: Indonesia is an attractive country which has much more potential
for investors in different fields. Its geography, population and trade capacity is the most important potential. In
2007 there was 114 billion USD export and 74 billion USD import in this country.
There are enough subsoil and surface resources. According to export of coconut palm oil Indonesia
takes the leading position. The three largest companies of Indonesia are engaged in coconut palm oil
production. The country’s second largest company SINARMAS is doing business in four sectors: coconut palm
oil, paper production, construction and finance.
Rapid development of Taiwan, South Korea, Singapore and Malaysia and their relations with
Indonesia increases the potential of this region. There are about 48 million SMEs in Indonesia, and also there is
the Ministry of SME and its subunits.
Evaluations on the question “Which sectors in Indonesia are recommended for foreign investors and
what opportunities they have?” are as follows: Every sector is important, but potential sectors are: textile, mill
machinery, construction products, spare parts for cars, motorbikes, agriculture machinery, infrastructure and
apartment building, construction of hydroelectric and thermal electric stations, navigation, food and
1
Selim Ozdemir, Endonezyada Girişimcilik Fırsatları, (not published).
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consumption products, shop chains, mining (especially coal), electronic products, industrial agriculture
products, airline business, recreation business, telecommunication, oil and natural gas sectors.
It’s logical to provide raw materials and semi-finished products from Indonesia. “Container” fees are
very low and it’s possible to export “zero custom” technologic machines from Europe to Indonesia.
Mediterranean products like dry fruit, olive oil, greenery and fruit are important export products. Because of
cheap labor force, it’s difficult to enter the sectors such oil and gas. Agricultural and industrial products with
applied technical knowledge will be more suitable for foreign investors. There can be built a coconut palm oil
factory.
For those entrepreneurs who are engaged in small business, it’s recommended to open fast-food, candy
shops, and building mini-sport complexes. Due to region’s population important brand strategies can be
launched. Religion tourism is a potential business area which can bring much more benefits and returns on
investments. Doing business in education sector, especially opening a university with international status and
building education centers based on English language will be a strategic investment.
Thoughts on “Problems awaiting foreign investors in Indonesia” are the following: There is not
enough government incentive for foreign investors, the industry and infrastructure has not been developed well
enough and there are no mining rights. Like in many countries there are corruption problems in the enforcement
of adopted laws. Not forming of secure and healthy environment is an important obstacle. There are
considerable bureaucratic problems due to weak synchronization of the central and regional government units.
In Indonesia
another important problem for foreign investors is the conflicts between local people
in having rights on lands. Monopoly and protection, high costs, language based communication problems with
local people, geographic adjacency of Australia are the main disadvantages. Traffic jams in Jakarta is an
important problem for entrepreneurs who want to do business in this city.
“Entrepreneurs who want to do business in Indonesia must pay attention to factors in work relations”
are examined like this: One should possess special information about Indonesia. There were plenty of foreign
investors who lost money by different ways, like advance. There must be gained enough information from
individuals and entities that know this region well and then an action should be taken accordingly. With
possibility of 100% foreign investment, investors who don’t know country’s environment should be guided by
the state and other agencies which encourage foreign investments. Before doing investment it would be
reasonable decision to see the region. Market researches will help to reduce costs. The support of consultants
should be taken consultant in order to determine the investment costs exactly. It is necessary to take effective
marketing activities.
Personal relations are very important. For entering to market, short-term investments have more
advantages than long-term one. Those who want to start up a midsize business should find long-term support.
Such kind of support can be provided in three different forms: 1. Strong capital. 2. Company supported activity.
3. Cooperation with people who are well-informed about Indonesia.
Paying attention to the distance between work place and home will solve traffic jam problems. There
must be given standardized trainings and education to personnel and international exchange and development
programs should be applied for increasing quality. One needs to understand Indonesia, its local people and
culture. Those who want to open a business in this country must have patience at least like Indonesians.
Because, phrases like “sebantar lagi” (soon), “gampang” (easy) are the signs of time waste habits of this
country’s people.
Conclusion and Suggestions
In a country with 250 millions of population and rich natural resources, poorly developed industry and
infrastructure, weakly synchronized central and regional government authorizes with bureaucratic problems
directly affect the investments of foreign investors; trade relations are generally in import-export axis. In
meetings with Indonesian and Turkish businessmen one can notice the formation of necessary resources for
foreign investors to do business in important sectors.
In comparison with China, India and the USA, Indonesia is more pure market for foreign investors.
Indonesia is the country which conducts barter trade with other countries: exporting raw materials and
importing finished goods. This shows that Indonesia can be a potential trade partner. In many countries there
are very little advantages for small and middle size enterprises, however, in Indonesia there are many
advantages for them.
We can give the following suggestions for the formulation of effective entrepreneurial activities in Indonesia:
1. Increasing the state support to SMEs.
2. Development of laws for encouragement of foreign investors.
3. Decreasing the bureaucratic obstacles.
4. Effective struggle against corruption.
5. Development of investment consulting services for companies.
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6.
7.
Investors should start doing business with short-term investments.
To attract foreign investors to the country through organization of exhibitions and job picnics.
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2008
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the Investment Coordinating Board, Jakarta, 2008.
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Jakarta, 2007.
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Zabadi, Jakarta, 21.08.2008.
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Meetings with Foreign Trade and Investment Consultant Galip Kayar, Depok, 05-15.08.2008.
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T.R. Indonesia Embassy, Meeting with Trade Attache Gokhan Bayar, Indonesia Country Profiles Notes, Jakarta,
12.08.2008.
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http://asiafoundation.org/pdf/SMEsurvey_Indo.pdf, 10.05.2009
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10.05.2009
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http://www.mondaq.com/article.asp?articleid=29859, 10.05.2009
184
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168
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Entrepreneurship Opportunities and Problems in Indonesia
Author
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ÖZDEMİR, Selim
Abstract
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In 2008 when I visited to Jakarta for editorship of the book “Entrepreneurship Opportunities in Indonesia” two different survey studies with regard to entrepreneurs and companies were completed. In face to face meetings with company supervisors and official authorities more detailed information related to this subject was collected. In 2004 while visiting Malaysia, Singapore and Indonesia during a 6-month academic study, I gathered background information on these countries, and no doubt that these data had made positive contributions to these studies. In this study four main topics were examined: “current potential in Indonesia for foreign investors”, “opportunities in different sectors”, “potential problems” and “business relations rules”, which were responded by about 100 company supervisors and government authorities.
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2009-06
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Conference or Workshop Item
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HB Economic Theory
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1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
The Increasing Importance of the Civil Society Organizations (CSOs)
Süleyman ÖZDEMĐR
Associate Professor
Istanbul University, Faculty of Economics
Department of Labour Economics and Industrial Relations, Turkey
sozdemir@istanbul.edu.tr
Zeki PARLAK
Associate Professor, Marmara University
Faculty of Economics and Administrative Sciences
Department of Labour Economics and Industrial Relations, Turkey
zekiparlak@hotmail.com
Abstract: “Civil Society Organizations” (CSOs), especially by developed societies, are "started
to be re–explored" since 1970s in consequences of social welfare states' crisis, domination of
neo–liberal philosophy and policies in the world, spreading of democracy, end of the cold war,
improvements on information and communication systems etc… The most prominent difference
between the last decades of the previous century and the first decade of the current century lies in
the role that CSOs undertake in the society. As CSOs have suitable properties which are brought
about the economic and political philosophy of globalization, they have got considerable
attention of the states and have had a proper environment to develop in the countries where neo–
liberal philosophy is being implemented.
However, CSOs are not an alternative to the state, instead, they are supplementary institutions.
Since CSOs are very appropriate to the rationale of economical and political philosophy of the
last quarter of the twentieth century, which requires minimalization of the state, they are being
supported by the state which was directed by liberal philosophy. Hence, they are increasingly
developing in terms of quantity and quality.
Keywords: Civil Society Organizations (CSOs), Non–Governmental Organizations (NGOs),
Non–Profit Organizations (NPOs), Third Sector, Social Policy, State–CSOs Relationship,
Turkey.
Introduction
The post–1980 era has witnessed the widespread transformations in the economic and political realms
of the social life at the global level. The expansion of globalization, neo–liberalism and participative democracy
has resulted in the increasing importance of the civil society organizations (CSOs) in the last three decades. The
state has withdrawn from the economic and social areas. While the economy has been left to the market forces,
new actors entered the scene to provide social welfare services. Consequently, the CSOs were re–discovered as
the abiding provider of the social aids. Thus, it may not be incorrect to name this century as the century of the
civil society.
The CSOs are now considered as extremely significant institutions of the modern society as the new
provider of social services. A new division of labour has been advanced among the state, municipals, market and
the CSOs. The state has formed partnership with the CSOs and prefers purchasing services from the CSOs rather
than producing them. The process has been expanding since the late 1970s and has come to constitute a
significant part of welfare mixes in many countries. In many developed nations, particularly the USA and UK,
the legal system and the administrative reforms enabled the state to maintain responsible for financing and
auditing the social welfare services while transferring the responsibility for the provisions of these services to the
CSOs and private sectors.
In contrast to the developed nations, the CSOs are extremely weak in Turkey. Despite the promotion
and expansion of their role in the social policy area at the global level, the Turkish CSOs do not seem to have
gained any impetus. Neither the state nor the CSOs have any intention to alter their entrenched attitudes. The
state has distrusted them and had hostile attitudes towards that civil society organization which are not under its
control. The CSOs, on the other hand, have no desire to change and undertake any major responsibilities for
social services. However, Turkey’s accession to the EU will eventually transform the hostile attitude of the state
towards the civil society and give rise to the growth of the civil society in Turkey.
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1. The Concept and Description of Civil Society Organizations
A. The Confusion over the Concept of Civil Society Organizations
Civil society organizations (CSOs) are composed of a wide range of different organizations such as
small local associations, large professional organizations and foundations. A number of different terms are
currently used to indicate the civil society in the literature. Some widely used terms including civil society
organizations, non–profit organizations, non–profit sector, non–governmental organizations, non–governmental
sectors, philanthropic organizations, charitable organizations, third sector, voluntary organizations, private
voluntary organizations, not–for–profit organizations, independent sector, tax–exempt organizations and social
movements (Uslu 1999). It should be pointed out that there is no widely accepted discretion for none of these
terms.
In the Turkish literature on this sort of civil organizations, although there is a disagreement whether
some of these organizations could be considered as civil society or not, the term civil society organizations is
used to point out followings: foundations, associations, chambers, cooperatives, clubs, and platforms, and non–
governmental organizations and third sector. On the other hand, some different terms such as community,
society, order, guild and foundations were employed in the past to express the CSOs (ACOC, 2004).
The term “non–profit organizations” is preferred in the developed world. This term is extensively used
in English literature. Nevertheless, the term civil society organizations will be used in this article. This is because
this term has wider in scope, and is also well known and commonly used in the academic circles, the political
discussions and in the daily life in Turkey.
B. The Concept of Civil Society Organizations
The concept of CSOs has a wider framework and usually tends to include most of the other terms given
above. The CSOs is based on the voluntariness principles and is wrought by philanthropy and social aims. It is
independent of the state and constitutes a third sector along with the public and private ones. Although located in
the private sector, in terms of its structure it is quite distinct from it.
Lester Salamon (1999), who has written widely on the CSOs, describes the CSOs as non–profit organizations
and non–profit sector in his book and indicated that they have six basic features in common.
• First all these organizations have managed to become institutionalized one way or another. Informal and
temporary gathering of people cannot be regarded within the scope of non–profit establishments.
• Second, these organizations must operate in the “private sector”. Thus, they must be independent of the
state. Nevertheless, this point does not mean that these organizations may not receive support from the state.
• Third, they must distribute profits in accordance with the social objectives. That is, these organizations, do
not share dividends with their shareholders.
• Fourth, they must have an independent management structure. They plan and implement their own
activities. No person or an establishment should interfere in the running of these organizations.
• Fifth, the development of non–profit organizations should be voluntary. In general, the members of the
board of trustees are volunteers, yet those who work for the organization do not have to be volunteers.
• Sixth, the non–profit organizations have to operate with purposes declared in their charter.
According to a categorisation, developed by National Centre for Charitable Statistics, massive number
activities of non–profit organizations can be discerned.
The centre, divides this activities 26 main areas and functions. Then, it is divided into sub–categories.
For example, in the field of education there are 41, on the other hand in the field of arts and culture and
humanities 56 activities exist (Salamon 2003 & Fremont–Smith 2004).
According to another study, the CSOs are described as “organizations, which are independent from the
state, based on voluntary gathering and working for the interests of the society rather than their members, non–
profit and operating within the legal system” (Şahin 2007).
2. New Categorisation: Civil Society Regimes
In line with Esping–Andersen’s widely known classification, “welfare regimes” (Esping–Andersen 1999
& Özdemir 2007), Salamon and Anheier classify the CSOs as “civil society regimes”. For them, the CSOs are
developed in different ways under different regimes, and they prose four different types of civil society regimes
(Anheier and List 2005).
The first is the “liberal model. This model, represented by the USA, is characterized by the low level of
public spendings on social welfare and the existence of a large civic sector.
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The second regime is “social democratic model”. The model is implemented in the small Scandinavian
states, mainly in Sweden. This model is geared to a strong welfare state and relatively weaker in voluntary
sector. The higher social spending, by the state, leaves no necessity for the civil society.
The third model is called “corporatist model”. The model is mainly represented by Germany and is
based on the partnership between the state and civil society. The central feature of this model is the high public
and civil society spendings. That is both the state and civil society are generous.
The final model is the “statist regime”. This model is represented by the countries such as Turkey and
Japan. The level of social spendings on social welfare is extremely low and the civil society is not well–
developed. While the statist regime restrains from the public welfare spendings, they pressurize the CSOs to trim
down their welfare spendings (Moore 2001 & Anheier and List 2005). Nonetheless, this does not mean that the
balance between the state and the CSOs will never change. The CSOs are occasionally promoted as in the case
of France and Japan (Moore 2001).
3. The Historical Development of the Civil Society Organizations
A. Pre- Industrial Revolution Era: The Increasing Social Responsibility of the Civil Society Organizations
Voluntary organizations that are providing social aids with philanthropic sentiments to those who are in
need have always existed throughout the history. In fact, practices which are similar to those social welfare
services provided by the welfare state as old as human history, the societies always looked for ways to provide
aids and services (accommodation, food, cloths etc...) to those who are disables, ills, poors. It should be indicated
that before the establishment of the modern welfare state, society, religious and voluntary organizations provided
these services in one way or another (Ersöz 2000).
In the period before the centralized state authority took over the responsibility for social services, CSOs
had provided welfare for individuals and families in the face of economic and natural disasters. Social aids were
provided by personal relations such as families, relatives, communities,and by economic organizations such as
guilds and also by religious organizations such as order, small dervish. In addition to these, it was also observed
that the administrative classes of south aimed to develop a protective system for the poor with various concerns.
In short, before the Industrial Revolution, it can be argued that the practice of social policy was provided by
philanthropic organizations operating on the basis of voluntariness and mutual aid principles. Following the
transformation of the economic and social structures by Industrial Revolution, the social welfare providing
organizations started to be transformed also (Ersöz 2000).
B. The Period of Industrialisation: The Decreasing Importance of Civil Society Organizations
In consequence of rapid industrialization, the social policy organizations of the previous era such as
family, philanthropic organizations and others quickly became insufficient and the new organizations to meet the
growing demand were established. This is because, the traditional social aid organizations failed to provide help
for rapidly growing working classes in terms of work accident and social care (Koray 2003).
The process of urbanization, caused by the Industrial Revolution, resulted in the elimination of the some of the
social protection organizations or reduced their effectiveness; along with the declining of the size of families, the
family ties and protection of the family weakened, thus the state in the industrial societies had to take over those
responsibilities (Güloğlu 1998).
After the great depression of the 1929, to overcome the crisis, the Keynesian economic model was
adopted. This model was called for the extensive involvement of the state in economic and social realms in order
to sustain a high level of domestic demand. The state intervention in the economic and social services, virtually
eradicated the need for the CSOs. As a result, a new period, in which the state took over the main responsibility
for the provision of the social welfare, was launched. The period between the World War II and 1980, state
intervention in social policy reached its apex and welfare states were born and matured.
C. Post–1975 Era: Globalization and Neo–Liberalism and the Re–Discovery of Civil Society Organization
In this century, there is no doubt that the increasing importance of the CSOs is very much associated
with the rise of globalization and neo–liberalism and participative democracy. In the post–1980 period, the
transformations, taking place in the economic, politic, social and legal areas, resulted in the gradual withdrawal
of the state from the social welfare services. As a result, the CSOs started to take over the responsibility from the
state for the provision of the social welfare services, and a third sector, in which the CSOs operate, developed
after a long period of stagnation (Şahin ve Öztürk 2008). These organizations, providing social welfares for
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humanity since the early ages, have performed a very significant role. It seems that they will continue to erg this
role in the near future (Kuhnle ve Alestalo 2000).
The CSOs, particularly in the western world, have been increasingly seen as an actor of social policy.
The central government, local government, and the CSOs have set up partnership for the provision of social
services and the state increased its collaboration with the CSOs. The state, rather than producing the same
services prefers buying from these organizations. Particularly after 1970s, the process revived and come to
constitute a significant part of the welfare mixes (Uslu 1999).
The ascendancy of globalization and neo–liberal policies seems to be the main factor behind the current
expansion of the CSOs both in qualitative and quantitative terms in the developed countries. While calling for
the state to wane and return to the main functions, the CSOs are expected to undertake the responsibilities and
duties for the provision of the social welfare along with the private sector (Pierson 2001). Hence, the legal and
administrative restructuring in the developed countries particularly in the USA and England has intended to
enable the state to maintain the responsibility for fining and auditing while transferring the responsibility for the
provision and distribution of the social welfare to the CSOs. Along with the process and policies a discourse and
need for supporting the CSOs have come to dominate the political agenda (Özbek 2002).
The role of the state in the social area should be that the state should provide services to civil society or
the private sector which are reluctant to produce, should provide aid for those priors who cannot afford to buy
the services produced by the private sector (Çalışkan 2001) or should support, subside the private sector social
services that are useful for its citizens, and should promote them (Çevik 1998).
The state seeking to cut down the social spendings with the aim of restructuring themselves, particularly
stared felling that is insufficient in the area of social aid and social services. The realisation of the shortage by
the state, in these issues, resulted in the re–establishment of the ties between the state and civil society.
4. The State–Civil Society Organizations–Market Relations
A. The Relations between State and Civil Society Organizations
Some researches demonstrate that in the development and the qualitative expansion of the CSOs, the
attitude of the state towards these organizations is of central importance. If the legal, institutional and financial
supports (purchasing social service, aids and tax exemptions, etc.) are provided by the state to these
organizations, not on their quantity and scale but also their share in the provision of the social services, will
certainly augment (Luksetich 2008).
The CSOs have become one of the basic social actors in the local, national and international levels. The
CSOs are parts of the private sector, while they are operating on a voluntary basis, and provide services for the
public. Thus, CSOs can be regarded as the organizations where the private and public cut across.
More than a quarter century, many researchers, mainly economist, have argued that the CSOs provide social
services much more effective and cheaper than the state and suggested that the state should set up partnership
with the CSOs. In some developed countries such as the USA, France, England and Germany, these suggestions
have been implied for a long time. In countries where the State–CSOs relations are developed and strengthened,
the number of the CSOs and the coverage of their activities (such as in the USA, Holland and Austria) are much
more extensive than in countries (particularly developing countries) where these relations are underdeveloped
(Anheier ve List 2005).
It is possible to argue that the State–CSOs relations are formed on three bases such as supplementary,
complementary and adversarial.
The first form of relation is the supplementary relations where the CSOs produce services that are not
produced by the state. The failure of these states to meet the demand for services, result in the entrance of the
CSOs into the service production. In this case it can be argued that there is reverse relations between the public
spendings and CSOs’ spendings. That is, if the state produces more services, its spendings will increase, the
CSOs’ spendings will decrease.
The second form of the State and CSOs relations is the complementary. This means that the state and
CSOs are partners in the provision of the social services and the role or the CSOs are to carry out the distribution
of the services that are financed by the state. At this stage, there is a direct link between the CSOs’ spendings and
the state spendings. That is, with an increase in the state spendings, its support to the activities of the CSOs will
augment.
In the third form of the relationship, CSOs, instead of producing services or helping governments to
produce it, are constantly encouraging the government in order to produce services and in this sense to perform
the public responsibility. Yet the relation and interaction is very low if compared two others.
It must be pointed out that in hybrid organizations, where the State–CSOs relations merge one with
another, the border have become more vague as in the USA, Japan and Israel (Young 2000).
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The CSOs can be seen in all civilized societies. Yet each society has specific structure and scale of
voluntary sector distincts very much from the others. Currently the high growth in the voluntary sector has
occurred in the USA. In the last 30 years, the voluntary sector has become a third sector along with the public
and private sectors (Payton ve Moody 2008).
B. The Relations between Market and Civil Society Organizations
The CSOs do not always obtain financial resources from the charity, donation and state aids. Some of
the CSOs may participate in the economic activities by means of economic enterprises with an intention to make
profit. Thus, they can produce and sell goods and services like any other private sector companies. Nevertheless,
the profits coming from these economic activities are not shared by the shareholders, but are used in accordance
with the social purpose of the organization (Easterly ve Miesing 2008).
In the last two decades, it is extensively observed that not only the CSOs have expended rapidly, but
also their incomes have risen sharply, particularly in the USA. The central reason for the expansion of the CSOs
is the markets. During this period, an ample demand developed for their services and for their increased incomes
from charging for these services; they set up trading companies or partnerships with private sector firms and they
commenced to use the techniques that are used by the firms, learned to obtain more financial resource from the
state and sophisticated marketing strategies and monetary management techniques. They also re–designed their
own structures and implemented all these techniques for collecting charities and providing social services. All
these denote that the CSOs of the century are very much different than those at time of our fathers due to still
continuing process of a massive restructuring (Salamon 2003).
5. Civil Society Organizations in the USA and Turkey
A. Civil Society Organizations in the USA
The USA has gone in the way of philanthropy and CSOs more than any other nation did in the history.
That is no nation has been based on voluntary activities more than the USA has been. Along with the state and
market, as a third sector the CSOs has become very important. The voluntary sector has gone beyond the
imagination of people in this country. That is, there exist more that 2 million voluntary organizations, millions of
donors and volunteers, millions of employment, billions of dollar income, billions of dollar spending and
trillions of dollar assets (Payton ve Moody 2008).
One of the important characters of the American society is that, in sharp contrast to many welfare states,
the constantly growing state has developed the CSOs rather than emasculating and restricting them in the last
fifty years. Because in the USA, societal hostility towards centralized bureaucracy and the presence of large
number of voluntary organization in various fields, have increased the supports for the CSOs in the fields such as
health, education, social services, art and culture. In the American social welfare system, in many of the basic
social welfare areas financing is proved by the state while private organizations and establishment provided most
of the services (Salamon 1999).
The CSOs and philanthropy has become very important element of the social life in that the number of
the registered CSOs reached to 1.4 million according to the Internal Revenue Service in 2004. The figure does
not include small religious groups, local communities, and clubs, civil partnerships, and the other voluntary
organizations. If these unregistered organizations are included the number of the CSOs, total number reaches to
2 million in the USA. Of these 500,000 are very large and have immense revenues and investments. According
to the IRS, the group had 1,36 trillions revenues and 2,97 trillions worth assets in 2004. It means that the
economical size of the CSOs in the USA is larger from the whole countries' economies. Incomes and possessions
belonging to the CSO’s in this country are mostly consumed for education and health services (Payton ve Moody
2008).
B. Civil Society Organizatons in Turkey
Looking at the development of the CSOs in Turkey, it is possible to say that the CSOs, which are the
important elements of the democratic system, have played a profound role in the development of the society
since the early days of the history. Most of these CSOs are organised as foundations (vakıf) and associations
(dernek). They have done pioneering and useful works for the society. It is determined that most of them were
established with philanthropic and social aims (DPT 2001).
CSOs, organized the form of foundations, have performed countless duties and have undertaken large
number of responsibilities within the economic and social lives since the Seljukis time. They thrived greatly
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during the Ottoman era. The Ottoman epoch can be considered as the golden age of these organizations in terms
of quantity and functions (Zaim 1997).
However, it is well–known that the foundations were in decline in the last years of the Ottomans and
this process continued well into the republican era. It was not untill the amendment made in the Common Law as
to foundations in 1967 that the fate of CSOs changed in Turkey (See Ertem 1998). Following these amendment,
the number of foundation have amplified.
These foundations have carried out extremely important responsibilities in the economic and social lives
throughout the centuries in Turkey. This type of organizations contributed to the education, culture, and
economy, social and politic lives. It can be said that the Foundation allocated most of their services to social
services. Some of the foundations established as educational (for example Dar’üş–Şafaka, which is a secondary
school in Istanbul for poor or poor and fatherless children) and health (for example a lot of dar’üş–şifa, which is
health care centres) establishments in order to enhance national culture and protection of public and individual
health. Some them prefer caring the poor, provide pension for those who work in heavy and weary industries,
elderly who cannot work, parentless kids, orphans and widows etc. (Özdemir 1997).
Another organising form of the CSOs during the last period of the Ottomans and Republican eras was
the associations. Nevertheless neither the foundations nor the associations have managed to serve as CSOs
because of the legal restriction on their activities. Thus, the legal amendments have been taken place in Turkey
to eliminate these restrictions and give more freedom to the CSOs.
For today, looking at the number of the association and foundations and other CSOs, and their
members, are very low when compared to those in the developed countries. As of February 2009, there are 4.966
foundations. The number of total associations operating in Turkey is about 80,706. The figure is very low
compared to the number of civil associations in the USA, Germany and France, which are approximately 7
millions, 2.1 and 1.4 millions respectively. According to the calculations; Turkey has to have at least 300
thousand associations in proportion to their size.
In line with Solomon’s description of CSOs, one of the elements of the concept is that considering the
private and public division, the CSOs are private sector establishments. Looking at the Turkish CSOs, apart from
the foundations, associations and trade unions, some chambers and occupational association (chambers of
commerce, engineers association, artichoke association, laws etc.), for which membership is compulsory, are
considered as CSOs. These aspects of the civil organizations are not compatible Salmon’s CSOs description.
And they have hybrid characters.
At the same time, in these and other EU countries, the sector employs a sizeable part of their population.
In the USA, approximately 9 million, in Germany 1 million, in France 0.8 million, and in Japan 1.4 million
people are working for CSOs. However, albeit there is no research conducted in the respects in Turkey, it is
estimated that the employment in this sector is negligible.
On the other hand, as noted earlier, the importance of the CSOs are expanding in the world. In many
countries, the share of these organizations in the GDP is very large and continues to grow (for example, in the
USA is about 6.3 percent, in England and France 4.8 percent, and in Japan 3.5 percent). Unfortunately there is no
research which has been carried out in this respect in Turkey (ACOC 2004).
In Turkey, the inexistence of sufficiently developed welfare state constitutes the basis of the insufficient
development of State–CSOs relations. Thus, this insufficiency dominates the CSOs and there is no sign that
there will be significant development in this area. Turkey has not undergone the process of transformation of the
western welfare state since the 1970s.
The formation of the relation between the state and CSOs depends of the existence of some conditions.
First of all, it is necessary that the state should promote the CSOs, by providing the legal framework enabling the
effective operations of the organizations.
In order to develop the CSOs–State relations, those CSOs which have better organizations, performed
effective and useful services should be selected and supported and promoted. The Social Services and Child
Protection Agency (SHÇEK) leading role and advises will help these organizations to improve the quality of
their services (DPT 2001).
In Turkey, the profound presence of state dominates the educational, health and social services. The
social services provided by the public organizations are controlled by central authority in Ankara. Extreme
centralizations tendency prevents planning, producing and distributing the services to those in need. In addition,
shortage of financial resources results in the shortage of these services. Therefore, looking from these angles,
regarding the fulfilment of social welfare services, both public management and the CSOs are far from the
expected levels (Çevik 1998).
The results of a survey (See Özdemir & Başel & Şenocak 2009), performed by us in Üsküdar District of
Istanbul, after exposing the conditions and reasons of CSOs, point out that unfortunately there is not any
evidence that this structure will change or transform, like in developed countries, in near future.
In the developed countries, the process of the transformations which give rise to transferring, to a large
extent the state responsibility concerning social policy to the CSOs. Not only have not been experienced in
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Turkey yet, but also the CSOs are neither aware nor enthusiastic towards such a change that will alter their
destiny. Unfortunately some questions in the research demonstrate that the CSOs have accepted their destiny, are
extremely reactant to do something to alter their future. This is very much noticeable from the questionnaire. As
can be seen from the (Tab. n. 35) that 33.3 percent of the participant CSOs are against the transfer of social
responsibility from the state to any other organizations including the CSOs. Only the 11 percent of the CSOs
support such initiatives and express willingness to take some responsibility. The rest, (55,6 percent) avoid to
reply these questions and do not believe that such transfer can be possible. In some developed countries such as
the USA, the majority of the CSOs supports the transfer of the social aids and social services to voluntary
organizations. In the countries, where this transfer has taken place, the growth of the CSOs has been observed.
It is, therefore, a must for the Turkish CSOs to welcome this development and undertake increasingly
responsibility for the provision of the social policy. If the CSOs have still state–centered views and are unaware
what is going on in the World, nothing can be done to change their destiny. It is probably that the CSOs are in
the opinion that they may not be able to overcome the provision of social policy and thus lack self confidence
(Özdemir & Başel & Şenocak 2009).
The view that the state provides social aids and social services better than anyone, dominate not only the
CSOs but also the entire society in Turkey. The survey carried out by Çarkoğlu (2006) also confirms this view.
According to his results, 38.2 percent of participants believe that social aid is primarily the responsibility of the
state in Turkey. 30.9 percent believe that it is also the individual responsibility of wealthy people. Only 5,4
percent indicate that the CSOs should have some responsibility in this respect. Hence, it is possible to argue that
in the mind of individuals, there is very small role for the CSOs for providing social services. This means that
when people give charity, only few of them take the CSOs into consideration (Özdemir & Başel & Şenocak
2009).
Conclusion
The 1980s have witnessed major transformations in the economic, political and social realms. With the
collapse of the Post–War order, the Western capitalism moved to a new stage. With the ascendency of the new–
liberal economic policies, while the state involvement in the economy was undermined, the expansion of the
welfare state came to the end. For the neo–liberals, the state involvement in the economy created market
inefficiencies and prevented optimum allocation of resources. Hence, it is more rational for the state to withdraw
from the economy and stop providing social welfare services. The social welfare services must be provided by
civil society organizations (CSOs) or the private sector (1) (Pierson 2001). This is resulted in the re–discovery of
the role of the CSOs as the actors in providing social services in the developed economies. A spectacular
expansion of their role and activities of the CSOs in the provision of social services have been observed. The
number of the CSOs has also mushroomed.
The post 1929 crisis witnessed a period in which the role of the state in the economy and in the
provision of social services was rapidly expanded. Nevertheless, with the crisis of the 1970s the state
involvement in those areas came to be questioned. A new area was launched by the adaption of neo–liberal
economic policies, demanding minimum state interference in the economic and social realms in the late 1970s
(Özdemir 2007). Consequently, the discourse that the CSOs and waning the state have dominated the economic,
political and social agendas in the world (Özbek 2002).
The concept and issue of the CSOs, philanthropy, non–profit organizations, and social capital have been
disregarded by social scientist and the public officials for a long–time. As social policy and welfare state
developed, discussion on markets, state and social policy dominated the agenda in the post war epoch. The CSOs
was considered as an insignificant issue. Nevertheless, following the ascendancy of the neo–liberal economic
policies, this approach changed in the late 1970s. As the state has withdrawn from the economic and social
realms, the CSOs were re–discovered as alternative to the public provision of social services in many developed
countries. Thus, the CSOs have, recently, become one of the most important economic and social actors in the
developed countries. They are seen as a “middle way” between the state and market and are called as “third
sector”. In these countries, the state seeks to generate an environment conductive for the growth of the CSOs.
The high quality relations between states and the CSOs constitute the basis for the phenomenal revival of the
CSOs
Unfortunately this is not the case in Turkey for the time being. The CSOs have neither mentally nor
economically developed to undertake the responsibility for the provision of the social welfare state. There are
number of reasons for this insufficient development of the CSOs. One of them is the existence of poor relations
between the state and CSOs. In contrast to the developed countries, the state is reluctant to promote the civil
society. This may be related to the authoritarian character of the state. The state has always distrusted the civil
society and sought to keep any civil organizing attempt, which would challenge the state authority, under stick
control. Thus, the growth and expansion of the civil society may be deliberately prevented. The state is reluctant
to hand over some of its authority and responsibility to the civil society. This means that CSOs have not obtained
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sufficient support from the state to flourish. This also means that the state have no intention to purchase services
from the CSOs and does not involve or consult the CSOs in the formulation of social policies.
Thus, it can be legitimately concluded that the state may partially hold responsiblity for this apparent
insufficient development of the CSOs in Turkey. Our findings provide ample support to this argument.
Nevertheless, the process of Turley’s integration to the EU and economic and social development, it may argued
that the CSOs will discover their potential as well as get better recognition from the state and society.
One another reason for the dismay of the Turkish CSOs may be themselves. Reviewing the literature
and the fieldwork results demonstrate that most of the CSOs are even unable to perform their own duties
determined by their charters. Nevertheless, those, with sufficient financial resources, have not changed their
mentality at all. They are still disinclined to have any major role in the society. In many developed countries, the
responsibility of the state for the provision of social and welfare services is shifting to the CSOs. Most of the
Turkish CSOs tend to believe that providing social services have the responsibility of the state and reluctant to
undertake any responsibility in this regard. Consequently it is possible to argue that the most striking result of
this research is that the most of Turkish CSOs turn a blind eye to the changing international economic and
political environment of the CSOs in the world (Özdemir & Başel & Şenocak 2009).
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232
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The Increasing Importance of the Civil Society Organizations (CSOs)
Author
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ÖZDEMiR, Süleyman
PARLAK, Zeki
Abstract
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“Civil Society Organizations” (CSOs), especially by developed societies, are "started to be re–explored" since 1970s in consequences of social welfare states' crisis, domination of neo–liberal philosophy and policies in the world, spreading of democracy, end of the cold war, improvements on information and communication systems etc… The most prominent difference between the last decades of the previous century and the first decade of the current century lies in the role that CSOs undertake in the society. As CSOs have suitable properties which are brought about the economic and political philosophy of globalization, they have got considerable attention of the states and have had a proper environment to develop in the countries where neo– liberal philosophy is being implemented. However, CSOs are not an alternative to the state, instead, they are supplementary institutions. Since CSOs are very appropriate to the rationale of economical and political philosophy of the last quarter of the twentieth century, which requires minimalization of the state, they are being supported by the state which was directed by liberal philosophy. Hence, they are increasingly developing in terms of quantity and quality.
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2009-06
Keywords
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Conference or Workshop Item
PeerReviewed
HB Economic Theory
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https://omeka.ibu.edu.ba/files/original/7d80881826bd1213de4116a40611dbb0.pdf
e2edd0e8159fc769c1a9205c8d2fd968
PDF Text
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1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
An Analysis of the Impact of Motivating Factors on
Tourism Agencies in Turkey
Şuayip ÖZDEMĐR
Assoc. Prof. Dr. Department of Business Administration, Afyon Kocatepe
University, Turkey
Tel: +90 (272) 228 1292, Fax: +90 (272) 228 1145, sozdemir@aku.edu.tr
Yusuf KARACA
Assist. Prof. Dr. Department of Business Administration, Afyon Kocatepe
University, Turkey
Abstract: This study investigates the relations between agencies and hotels in Turkey, from
the perspective of business to business marketing. Drawing on the data obtained from 189
agencies by a survey. The results of the research show that six variables are important. Their
order of importance as followings: Communication with the agencies, supports for agencies,
the relationship between agencies and hotel companies, promotion activities for clients and
agencies, promotion activities encouraging and out of business relations between agencies and
hotel company.
Keywords: agency, tourism, distribution channel.
Introduction
This study investigates the motives influencing the perception of tourism agencies towards to hotel
companies. This research will try to illustrate why tourism agencies prefer one hotel brand to others. There is a
little study in the literature on the subject how agencies could be motivated by hotel companies. Generally,
authors refer to other aspects of relationship between agencies and hotels. Karamustafa (2000:24) emphasized
price-related problems which are tour operators frequently encountered. Jorgensen and Zaccour (2003:801)
discuss the effects of marketing strategies on the other member’s actions.
Tourism agencies are the most common intermediaries between the guest and a hotel company. They
play four important roles at the market. Firstly, they act as information brokers between guests and managers.
Secondly they process transactions by booking rooms and transferring money. Thirdly, they provide advice to
their customers. Finally, they provide better services by considering their customers’ needs and feedback.
Tourism agencies help with the customers’ safety, good value, and high quality for the guests. These
intermediaries do business with the hotels much more regularly than the guests do. Most travel agencies receive
little feedback on their clients’ satisfaction with their hotels client. The majority of travel agencies think that no
complaints as indicator of clients’ satisfaction.
From hoteliers’ point of view travel agencies want to improve their relationship with hotel companies
carry out joint-marketing activities and include more detailed information in the sales brochures (Medina-Munoz
et al. 2002).
Buhalis and Licata (2001) underline electronic communication devices affecting the intermediaries in
the tourism industry. They explain that using the internet, the interactive digital television and the mobile devices
bring new intermediaries called e-mediaries. From the point of experts, they suggest to reengineering business
process concerning the relationship between hotels and agencies. Ozturan and Roney (2004) find out that travel
agencies cannot use the internet effectively in Turkey. Travel agencies still use traditional marketing
communication channels such as printed media and telephone.
Knowing of the expectations of agencies and distributor firms is important for keeping successful relationship.
The industrial resellers expect financial and competitive differentiation benefits from main company. A finding
of a study on the USA shows that greater benefit differentiation leads to fewer financial benefits (Ghosh et al.,
2004)
Supplier firms try to attract agencies using different applications and methods. For example economic and
non-economic tools are preferred to encourage agencies by the hotels. The following two parts will explain
economic and non-economic tools respectively.
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1. Economic Tools For Motivation
Economic tools that aim to motivate agencies are the pecuniary ones. The agencies are encouraged by
these tools. As a consequence of using economic tools, agencies could increase their profits and so
intermediaries willing to make further cooperation with the hotel companies. There are many economic tools in
the practice that being used to affect intermediaries directly. Some selected important economic tools are
explained below.
Firstly, quotas are used as an economic tool. Supplier firms aim to make the members of distribution
channel join actively in marketing their own products using quotas. In order to make their distribution system
that they used active and effective, both sides want to use law sanctions based on agreements or other powers
(Aksoy, 1990:14-19).
Secondly, discounts, financial aids, compensation are used as economic tools. Such tools could be used to
decrease the conflicts and improve the cooperations. For realization of it, suppliers apply discounts, financial
aids, compensations, and setting protective rules by an agreement (Islamoglu, 1999:440-442). Intermediaries
expect from the suppliers financial aids and competitive differentiation (Gosh et al., 2004). Tsay (2001) points
out those intermediaries could be motivated by cash discounts and give back policy. It is also suggested that
supplier firms could encourage the intermediaries using the difference price for in favor of intermediaries (Li and
Dant, 1999).
Thirdly, promotion, advertising and co-marketing are also used for motivation economically. (i)
Promotion activities of supplier firms support the intermediaries’ activities such as giving gifts (e.g. pens,
calendars, etc.) in special day and religious festivals. At the same time, intermediaries’ promotion activities also
support the suppliers. This creates a mutual support between agencies and hotels. (ii) Advertising, public
relations, personal selling and the other marketing activities of hotels motivate agencies. (iii) Co-marketing
activities would be providing the reduction of cost and increase of effectiveness for both agents and the hotel
companies.
To sum up, this section explained main economic tools that motivate intermediaries such as quotas,
discounts, financial aids, compensations, agreements, difference price, cash discounts, co-marketing and
promotion activities. Non-economic tools are explained in the following section.
2. Non-Economic Motivation Tools
Non-economic tools to motivate agencies are not pecuniary ones such as communication, personal
relationships, participating to decisions, cooperation, problem solving. In practice, the number of non-economic
tools is more than economic tools. The most important feature of non-economic tools is that these tools provide
some advantages that make intermediaries the same profit with lesser working. Moreover, non-economic tools
encourage voluntary efforts in the mid or long term.
There are three factors influencing the recommendation of agencies’ a hotel to a client: The quality of
communications with intermediaries, the hotel brand name, and the incentives for intermediaries. These
communication tools provide hotel companies some advantages. Another three tools that contribute to the hotel
companies as the followings: Efficiency of computer systems for reservations, the sales representatives, and the
information received in following intermediaries’ requests (Dube and Renaghan, 2000:73-74).
Medina-Munoz and Falcon (2000) report that the intermediaries’ successes depend on five factors:
interorganizational trust, commitment towards the relationship, interorganizational communication
(coordination, communication quality, information exchange and participation), conflict resolution and
interorganizational dependence. But at the same time they had said there is no model established as an entirely
satisfactorily alliance. As a result of their study, in order to improve the impresenting of interorganizational
relationships in the tourism industry should be examined from the perspective of tourism agencies, recreational
companies, airlines and rental companies.
According to Gilliland (2003:60; 2004:88) there are five factors for the intermediaries of electronic
equipment such as credible channel policies, market development support, supplemental contact, high-powered
incentives, end-user encouragements. Later, he mentions about 16 subgroups differentiating these factors into
subgroups again which contains both economic and morale variables.
Shipley and Egan (1992) report that the countrywide marketing activities of the supplier firms, supported
marketing activities of intermediaries, the opportunity of product wideness and open relations and personal
relationships between supplier and intermediaries are thought important by intermediaries. They were also
underlining that, if there are being low motivated or demoralized intermediaries in the distribution channel,
conflicts will be inevitable in this channel and the conflicts prevent the effectiveness of channel. Because
intermediaries expect the reward for taking capital risk and labor force. Furthermore intermediaries compare the
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rewards of other similar intermediaries, the will cause conflict if there are any disadvantageous difference
against them. The first way of cooperation in a distribution channel and preventing conflict is better
communication.
Yukselen, (2003:262-263) evaluate the motivation of distribution channel members and conflict among
them simultaneously and he shows collaboration, partnership and the activities of programming the distribution
as incentives
Motivations of intermediaries are generally related to their expectations. The transformation of four P’s
(product, price, place and promotion) in the marketing mix into four C’s (customer value, convenience, cost,
communication) is the most important clue to understand the expectations of intermediaries as industrial
customers. Using the elements of marketing mix (4P) as (4C) makes intermediaries’ self-confidence. Trust is the
first expectation of international intermediaries from the supplier, especially in industrial marketing (Marshall,
2003). As long as intermediaries feel in confidence it is easier to motivate them
Yaprakli (1997) classifies motivation tools as rewarder power, punisher power, or charismatic power for
newcomers in the channel. Akin (1997) also adds to these tools three new powers: legal, expertise and
leadership. It is known that supplier firms' participating intermediaries making plans and solving problems has
positive effects on the interorganizational relationships. (Claro et al. 2003). Since active participation willingly
have positive effect for both sides, motivation is an important tool, and lack of motivation is one of the reasons
that cause lack of cooperation and conflicts and increase these conflicts (Tek, 1997:563). This reason, when
motivation is accepted as the basic factor in cooperation and conflicts, it will be easy to solve the problems since
the reason of the problem is determined truly. Actually, relationship between supplier and intermediaries is a
kind of human behavior in a group from social-psychological perspective. The trust between intermediaries and
supplier firms, relative profit gained from the sold products, cooperation and supplier firms’ satisfaction from the
intermediaries affect the relationships (Anderson and Narus, 1984). Namely, the trust and satisfaction of the
representatives are accepted as trust and satisfaction of intermediaries.
Weber (2001) put forward that the communication tools and using frequency of these tools determine the
relationship between supplier and intermediaries. Especially, internet increases the communication and sharing
the information, thus increase effectiveness of relationship between suppliers and intermediaries.
Intermediaries positively affect the use high technology communication. As a result of this thought,
intermediaries’ opinion affects long term relation expectations with the supplier positively (MacDonald and
Smith, 2003; Hunter et al., 2003).
Customer services of the supplier firms are important for relationships between supplier and
intermediaries (Parasuraman, 1998); because each of the intermediaries is an industrial customer. Being focused
on the targets, power equity and cooperation helps firms have contracted to each other reciprocally (Dabholkar
and Neeley, 1998).
Dickson and Zhang (2004) determined that the referent power influenced positively on retailer’s attitudes
toward and non-economic satisfaction with their suppliers in apparel industry in China. They reported that the
greater referent power also reduced channel conflict and enhanced economic satisfaction with business
performance. They also reported that greater channel conflict was associated with increasing economic
satisfaction with business performance.
Anderson and Narus (1990) state the relationship between distributors and supplier firms can be
considered in one perspective. Considering the subject both from supplier and distributors’ perspective, they had
seen distributors as a customer who must be satisfied. Their satisfaction is determined by the outcomes of
distributor communication, relative dependence, cooperation, trust and conflict. Whose power will be stronger in
this relationship? Anderson and Narus, (1984) reported that distributors’ comparison levels of outcomes and
comparison levels of alternatives determine the powerful side of this relationship.
Briefly, main non-economic tools that impact motivation of intermediaries are following:
Communication, Personal relationships, expectations of intermediaries, participating to decisions, cooperation,
problem solving, trust, communication tools, power and customer services,
3. Research Method
The survey was conducted on a sample of privately held Turkish companies in November December 2004
/ February 2005. The research was employed on a sample of 240 tourism and traveling agencies. All the sample
companies are the members of TURSAB (Association of Turkish Travel Agencies). TURSAB has 4585 member
tourism and traveling agencies in countrywide. The names and addresses of these agencies are available from the
website of TURSAB. Three copies of the questionnaire were distributed to each of 58 fourth-year undergraduate
students of the Department of Management at Afyon Kocatepe University, with the instruction to visit two
tourism and traveling agents they chose from the TURSAB database list. The researcher was the convener of the
course “Research Methods” for this fourth-year undergraduate programme class. A decision was made by the
researcher to assign the students to conduct the survey as a part in fulfilling the course. The participation-
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invoking nature of personal communications and the cost constraints led the researcher to prefer this method to
mailing the questionnaire. No restriction was applied in choosing the companies. But once a student chose a
company, the name of the company was noted down and subsequent students were not allowed to choose it in
order to eliminate the possibilities of duplicate questionnaires. The aim and nature of the research were
addressed to the students beforehand. They were asked to bring back the questionnaires in stamped and signed
form by participants, and were told that further confirmation with the participants may be made later via
telephone. The students presented agent each business with a letter of invitation to participate in the survey.
Once the invitation was accepted, the students directed the questions to the participants. A few directors (28)
rejected the invitation letter to participate in the study by indicating some personal reasons (not having enough
time, going for a trip, etc.). In the case of rejection, students have chosen new companies. All the representative
directors who accepted the invitation letter completed the questionnaire. The questionnaires were stamped and
signed by the participating board member and the students noted the date of the interview. During November
2004 and February 2005, the students returned the questionnaires and for confirmation purposes telephone calls
were made to 12 (more than 6% of sample) companies. Telephone interviews with the participants indicated that
they were enthusiastic on the subject and answered the questions seriously. Verification of their answers in these
phone calls also showed that there were no differences in terms of their answers on the phone and those that they
gave in the questionnaires. Therefore, it was not deemed necessary to make further phone calls for confirmation
purposes. Of the 212 questionnaires distributed and then collected in that way, 23 were eliminated due mainly to
missing information. This resulted in 189 usable questionnaires, corresponding to 79 percent of the
questionnaires answered. The reliability of questionnaires is measured by Cronbach Alpha coefficient
(Cronbach alpha=0,91) which shows that dataset is reliable to analyze.
A questionnaire that consists of three parts is used in the research. Characteristics of the participants have
been investigated in the first part. The attitudes of the intermediaries to hotel companies are measured in the
second part. Likert scale is used in this part (1 strongly agree, 2 agree, 3 no idea, 4 disagree, 5 strongly disagree).
The importance of practices of hotel companies and the success of these practices are measured in the
third part. Likert scale is used in this part, too (1 very important, 2 important, 3 no idea, 4 not important, 5 not
very important). Variables used in this part are based on Gillilands’ (2003; 2004) studies. Gilliland (2003; 2004)
points out five factors that motivate intermediaries. Credible channel policies, market development support,
supplemental contact, high-powered incentives, end-user encouragements.
Table 1. Descriptive Statistics
Establishment date
Before 1990
Between 1990-1999
Between 2000-2003
Frequency
48
90
51
Percent
25,4
47,6
27,0
Number of hotels (or brand name) that
intermediaries represent.
Only one brand
Two or more brands
66
123
35
64,8
Intermediaries that have another job different
from tourism.
Yes
No
51
138
27,0
73,0
Table-1 shows descriptive statistics of sample companies. A perusal of Table-1 indicates that almost 73%
participants have experience in the tourism sector more than five years. It is expected that data based on these
experienced companies may yield robust findings. Majority of participants (64,8%) represent two or more hotels
or brand names. Majority of agencies (73%), work only as tourism agency, and the rest of the agencies (27%) do
additional business such as logistics, public relations, hotel management and real estate agency.
4. Findings
Evaluation of agencies towards hotel, analyzed by using eight expressions which are shown in the
following table. The responses to these expressions indicate that tourism agencies intend to maintain relationship
with the hotel companies. As shown in Table-2, the weighted mean (1,74) of this expressions indicates that
agencies are satisfied by hotel companies. In addition, tourism agencies believe that clients are satisfied with the
hotels that are booked (mean=1,39). They also happy for being agencies of hotels and they plan to do business
with these hotels.
Table 2 also illustrates that agencies believe that hotel companies make enough effort to increase the
profit of agencies (mean=2,03), and give reward to agencies’ performance (mean=2,21). It should be noted that
this finding is relatively stronger than other findings in Table 2.
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Table 2. Evaluation of Agencies regarding Hotel Companies
Mean
1,18
1,20
1,39
1,48
1,51
1,59
2,03
2,21
1,74
We are planning to do business with these hotels for a long time.
We are pleased with hotels that we represent them.
Our clients are pleased with hotels that we represent them.
We are happy for being agencies of hotels.
We believe that the products of these hotels are well.
Hotel company has a good relationship with us.
Hotel company makes efforts to increase our profits.
Hotel company rewards our performance.
Weighted mean
Std.
Deviation
0,50
0,40
0,64
0,77
0,75
0,82
1,21
1,19
Means= 1 strongly agree, 2 agree, 3 no idea, 4 disagree, 5 strongly disagree
Table 3. Associate Relationship between Agencies and Hotel Companies
Evaluation of current situation
(services oh hotels)
%
Perceived importance
Mean
Solving the conflict between agencies and hotel company
1,32
Including encouraging factors in the agreement increase to
1,50
sell hotel products.
When rival companies want to steal agencies, whether the
hotels maintain the relationship with the agencies to continue 1,80
with them.
Establishing partner advisory council
1,59
Compensating the loss of reps due to direct sales.
1,67
Giving client list to agency in a market division
1,86
Agreeing a market division belong to an agency
2,33
Weighted mean
1,72
Std.
Deviation
Enough
No idea
Not Enough
,50
66,1
6,4
27,5
,72
69,8
14,3
15,9
,90
52,9
36,5
10,6
,78
,88
,93
1,22
43,9
49,2
47,1
32,8
23,8
27,5
34,4
38,6
32,3
23,3
18,5
28,6
Means= 1 very important, 2 important, 3 no idea, 4not important , 5 not very important
Table 3 shows the associate relationship between agencies and hotel companies. The finding indicates
that from the agencies’ perspective, the most important subject at relationship between agencies and hotel
companies is “solving the conflict between agencies and hotel company”. The other variables that affect the
relationships between agencies and hotel companies are as follows in turn according to their importance: (1)
Including encouraging factors in the agreement increase to sale hotel products, (2) when rival companies want to
steal agencies, (3) whether the hotels maintain the relationship with the agencies to continue with them, (4)
establishing partner advisory council, (5) compensating the loss of reps due to direct sales,(6) agreeing a market
division belong to an agency (7) giving client list to agency in a market division (8) solving the conflict between
agencies and hotel company. Majority of agencies (66,1%) perceive that “solving the conflict between agencies
and hotel company” and “encouraging agreements to sale hotel company.
Table 4. Supports for Agencies
Perceived importance
Representative’s ability in communication
Hotels catalogs and brochures
Providing information for agencies about products and sales methods
Special communication opportunities between agencies and hotels
Training meeting
Rewarding successful agencies
Participating to fairs
Advertorials
Appropriating financial funds for agencies’ marketing activities
Certification programs for agencies
Allocating more financial funds for market development
Number of hotel staff for selling hotel products
Weighted mean
Mean
Std.
Deviation
1,11
1,27
1,47
1,47
1,52
1,53
1,55
1,58
1,76
1,74
1,89
2,08
,32
,55
,57
,74
,72
,79
,69
,76
,82
,73
,80
,94
Evaluation of current situation
(services of hotels)
%
Not
Enough No idea
Enough
77,8
87,8
70,6
76,2
68,8
50,8
58,2
64,0
37,0
54,0
42,8
74,6
20,1
4,2
17,6
15,9
11,6
21,7
21,7
13,8
27,5
20,1
28,6
17,5
2,1
7,94
11,8
7,9
19,6
27,5
20,1
22,2
35,5
25,9
28,6
7,9
1,58
Means= 1 very important, 2 important, 3 no idea, 4not important , 5 not very important
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Support methods for agencies are evaluated in Table 4. Based on the findings in the table, it could be
suggested that representative’s ability in communication is very important who represent the hotel against
agencies and it is found that majority of hotels are successful in this subject (77,8%). The findings also indicate
that brochures and catalogs are important to support agencies to find new clients. Hotels’ brochures and catalogs
are perceived successfully by agencies. Information about sales methods is perceived satisfactory (87,8%).
Providing information for agencies about products, sales methods, and number of hotel staff for selling hotel
products, special communication opportunities between agencies and hotels are found adequate.
Hotel companies’ financial funds which are kept for market development and agencies’ marketing
activities are perceived inadequate. While half of the hotel companies are found successful at rewarding
agencies’ performance, 27,5% of agencies believe that hotels do not reward their performance.
Table 5. Communication with the Agencies
Perceived importance
One to one relationship between representative of hotels and
agencies’.
Information on the internet (online support, training)
Using internet to communicate the agencies
Communication programs for better work relationships
Giving information about new products
Meeting for agencies
Defining price and quota automatically
Weighted mean
Mean
Std.
Deviation
1,32
,47
1,44
1,44
1,48
1,48
1,65
1,89
,59
,59
,50
,70
,98
,82
Evaluation of current situation
(services oh hotels)
%
Enough
No idea Not Enough
84,1
5,8
10,1
79,8
82,0
69,8
85,7
65,6
49,2
10,1
7,9
14,3
12,2
10,1
34,9
10,1
10,1
15,9
2,1
24,3
15,9
1,52
Means= 1 very important, 2 important, 3 no idea, 4 not important , 5 not very important
As long as hotels have enough information about agencies, they encounter fewer problems in dealing with
customers. Therefore, communication with agencies has special importance. The communication between hotels
and agencies is analyzed in Table 5. It is found that the most important variable concerning with the
communication is the person who represents the hotel against agencies; especially the skills of representative
have a decisive role. Majority of agencies (84,1%) perceive that one to one relationship between representative
of hotels and agencies’ is pleasing. Majority of the agencies think that using internet, giving information about
products, and communication programs are important.
Table 6. Out of Business Relations between Agencies and Hotel Company
Perceived importance
Entertainment together
Club activities for agencies
Join in adventure together
Weighted mean
Mean
Std.
Deviation
2,26
2,38
2,87
,96
,92
1,19
Evaluation of current situation
(services oh hotels)
%
Enough
No idea
Not Enough
39,6
28,6
21,7
30,2
32,8
42,9
30,2
38,6
35,4
2,50
Means= 1 very important, 2 important, 3 no idea, 4not important , 5 not very important
The findings of an analysis of out of business relations between agencies and hotel companies are shown
in Table 6. It is found that one third of hotel companies have out of business relations with agencies. However,
these kinds of activities such as entertainment, adventure and club activities are not important events for
agencies.
Table 7. Promotion Activities for Encouraging Agencies
Perceived importance
N
Mean
Std.
Deviation
Collectively advertising
62
1,66
,74
Providing payment options
62
1,85
,94
Bonus, reward, premium
63
1,87
,94
Gifts, promotional materials
63
1,90
,96
Financial programs (discounts even in small quantity)
63
1,94
,98
Giving agency firm identity card
61
1,98
,94
Rewarding new client by money (discount, cash)
62
2,53
1,05
Weighted mean
1,96
Means= 1 very important, 2 important, 3 no idea, 4not important , 5 not very important
288
Evaluation of current situation
(services oh hotels)
%
Not
Enough
No idea
Enough
52,9
21,7
25,4
46,0
30,7
23,3
50,2
24,9
24,9
58,7
18,0
23,3
49,7
30,2
20,1
49,2
25,4
25,4
24,9
30,7
44,4
�1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
Table 7 shows the findings of promotion activities for encouraging agencies. According to table agencies
perceive that collectively advertising is important though it is found that half of hotel companies’ co-advertising
effort is enough(52,9%). Comparing with the other promoting activities, rewarding the clients by money, giving
firm identity card, discounts (even in small quantity), and promotion materials are relatively unimportant for
agencies.
Table 8. Promotion Activities Intended for Clients
Perceived importance
Sales campaigns
Informing the client concerning agencies (links on the web
etc.)
Advertising
Training the agencies at finding new clients
Demonstrations
Sales on internet
Co-marketing activities
Giving trials
Establishing quota for agencies
Weighted mean
Evaluation of current situation
(services oh hotels)
%
Enough
No idea Not Enough
Mean
Std.
Deviation
1,50
,67
76,7
13,8
9,5
1,59
,78
58,2
18,0
23,8
1,55
1,71
1,76
1,94
2,03
2,16
2,26
,72
,84
,84
1,19
,94
1,14
1,01
62,9
37,6
61,4
57,1
38,6
31,2
44,4
17,5
37,0
22,2
24,4
36,5
43,4
42,3
19,6
25,4
16,4
18,5
24,9
25,4
13,3
1,83
Means= 1 very important, 2 important, 3 no idea, 4not important , 5 not very important
Promoting activities intended for clients are examined in Table 8. The findings indicate that sales
campaigns are the most important promotion method. According to agencies’ viewpoint, majority of hotels are
successful at sales campaigns (76,7%). Informing client about the agencies and activities of advertising intended
for the clients are important promoting activities. Moreover hotels are successful at these activities. Hotel
companies are found relatively unsuccessful in training the agencies at finding new clients, giving trials and comarketing activities.
Conclusion
Tourism agencies are intermediaries between hotels and their customers. Therefore agencies have
enormous importance in finding customers for hotels. Despite the fact that hotels want to have a priority in the
list of tourism agencies, tourism agencies do not give equal opportunity for finding customers to all listed hotels
for some reasons such as lack of knowledge, weak communication, etc. Tourism agencies expect some
incentives. The channel relations between hotels and tourism agencies exemplify a business to business
marketing. This study investigates the relations between agencies and hotels in Turkey, from the perspective of
business to business marketing.
In this study, six main variables and their sub variables are investigated for examining agencies attitudes
to hotels. The findings indicate that, generally speaking, tourism agencies have positive attitudes to hotel
companies. Based on the findings, it could be suggested that the following factors are the most important ones
which determine agencies’ attitudes: communication with the agencies, supports for agencies, relationship
between agencies and hotel companies, promotion activities intended for clients and agencies, promotion
activities encouraging, and agencies out of business relations between agencies and hotel company.
The findings of the research indicate that the intermediaries are found the hotels successful. Factors which
are important for agencies also found adequate or vice versa. It could be investigated whether agencies’ demand
or hotels’ success dominate in this relation. This offers a direction for future research.
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Title
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An Analysis of the Impact of Motivating Factors on Tourism Agencies in Turkey
Author
Author
ÖZDEMiR, Suayip
KARACA, Yusuf
Abstract
A summary of the resource.
This study investigates the relations between agencies and hotels in Turkey, from the perspective of business to business marketing. Drawing on the data obtained from 189 agencies by a survey. The results of the research show that six variables are important. Their order of importance as followings: Communication with the agencies, supports for agencies, the relationship between agencies and hotel companies, promotion activities for clients and agencies, promotion activities encouraging and out of business relations between agencies and hotel company.
Date
A point or period of time associated with an event in the lifecycle of the resource
2009-06
Keywords
Keywords.
Conference or Workshop Item
PeerReviewed
HB Economic Theory
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1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
Telecommunication Sector in Bosnia and Herzegovina: An Overview
Telecommunication, Regulation & Sustainable Development
Oğuzhan ÖZALTIN
Ph.D. Student, Süleyman Demirel University, Department of Public Administration,
Isparta / TURKEY, oguzhan@oguzhanozaltin.com
Aykut SEZGĐN
Research Assistant, Süleyman Demirel University, Department of Economics,
Isparta / TURKEY, asezgin@iibf.sdu.edu.tr
Onur DEMĐREL
Research Assistant, Süleyman Demirel University, Department of Economics,
Isparta / TURKEY, onurdemirel@yahoo.com
Abstract: The aim of the study is to investigate the telecommunication sector in Bosnia and
Herzegovina with respect to the liberalisation process mentioned by the Public Governance
Committee of the OECD and the sustainable development goals introduced by the World
Bank. It is analyzed that how telecommunication sector has been regulated in the post-war
period, the sectoral structure, legal infrastructure and regulatory agency characteristics are
represented and finally a SWOT analysis is made for the telecommunication sector in Bosnia
and Herzegovina and the Communication Regulatory Agency.
Keywords: Regulation, telecommunication sector, sustainable development, Bosnia
and Herzegovina
Introduction
Current discourse is the importance of competition in any sector. It is expected from nation-states that
they replace their competition policies with more liberal ones. In other words, the role of the states is expected to
be ‘mediator state’. States will delegate their regulatory and supervisory authorities to autonomous
administrative authorities. In this way, the wealth of the citizens will foster.
In order to experience such a wealth increase monopolistic sectors should be transformed into
oligopolistic markets. Then, these oligopolistic markets shall approach to perfect competition.
It is the case also for the telecommunication sector. The sector is generally under governmental
monopoly or has oligopolistic features. Therefore, the regulation and supervision shall be performed by
autonomous administrative authorities.
Telecommunication and Regulation in Bosnia and Herzegovina
a.
A Historical Overview
During the first phase of postwar reconstruction in BiH, broadcasting regulation was split between two
agencies: the Independent Media Commission (IMC), responsible for licensing radio and television stations,
program monitoring and establishing codes of practice, and the Telecommunications Regulatory Agency (TRA),
responsible for telecommunications and frequency management. The High Representative merged the two
agencies in March 2001, creating the Communications Regulatory Agency (Regulatorna Agencija za
Komunikacije-RAK), that has responsibility for both broadcasting and telecommunications areas (CARDS,
2006).
Currently there are three telecom enterprises in Bosnia and Herzegovina. These are BH Telecom,
Telekom Srpske and HT Mostar.
BH telecom, headquartered in Sarajevo, is a “joint-stock” company, principally divided into four
primary service units: (FIPA, 2005)
• Fixed telephony BH Telecom;
• Mobile telephony GSM BIH;
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•
•
Internet service BIHNET;
Data transmission BIHPAK.
Figure 1: Historical Progress of Former PTT in Bosnia and Herzegovina
Source: CARDS, 2006.
The company employs about 3,000 personnel at the total and provides 22 direct connections with
foreign operators, providing a total capacity of 3,471 channels and also direct connections with Bosnia’s other
two incumbents, Telekom Srpske (494 voice channels) and HT Mostar (214 voice channels). BH Telecom has
commercial roaming contracts with 127 world GSM operators, in 59 countries on all five continents. BH
Telecom continues to expand its BIHNET Internet service with subscriber access to broadband capacity via
leased lines and ADSL access (FIPA, 2005).
Ownership Structure Pre-Privatization
100%
80%
60%
40%
20%
0%
10
20
25
90
80
75
Figure 2: Ownership Structure
of Dominant Telecommunication
Companies before Privatization
BH-Telecom
HT-Mostar Telekom
Source: Cullen International, Country Comparative Report, 2005.
Telekom Srpske, headquartered in Banja Luka, employs about 2,400 personnel, and provides its present
subscriber base of 275,000 with direct switch links to Serbia-Montenegro, Germany, Slovenia, Croatia, Austria,
Italy, and Switzerland.
HT Mostar is the second of two telecoms operating in the Federation BiH. HT Mostar was legally
established as a limited liability company, with the Federation government owning about 80% of the company
capital, the remaining 20% is privately owned capital (currently 37% of the company is private). At present, HT
Mostar provides only fixed line telephony and Internet connectivity services. The company possesses about
130,000 fixed line subscribers and Internet subscribers (dial-up and broadband). In 2002, HT Mostar’s GSM
operations were spun-off into a separate operating entity, ERONET, but there are now attempts underway to remerge together the two corporate entities (FIPA, 2005).
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Ownership Structure After Privatization
100%
10
80%
37
35
63
65
60%
90
40%
20%
0%
Figure 3: Ownership Structure of Dominant Telecommunication Companies after Privatization
Source: CARDS, 2006.
Elektroprivreda is Bosnia-Herzegovina’s largest power utility incumbent, which possesses a substantial,
and growing telecommunications infrastructure primarily to support the power utility’s generation, transmission,
and distribution operations. About 2,000 kilometres of fibre optic cable capacity has been thus far installed by
Elektroprivreda, and the company is now installing an additional 2,000 kilometres of fibre optic capacity. In late
2004, Elektroprivreda was awarded an independent telecommunications operator license, which allows the
company to develop commercial applications of its excess capacity (FIPA, 2005).
As the number of issued licences for fixed operators (13 licences) are much higher than the number of
operators operating currently (3 operators), it may be claimed that the telecommunication market in BiH is going
to liberalize in 2007, marking the entrance of new players, and therfore distrurbing the position of the dominat
operators.
The fixed operators also operate as mobile operators and they are the only companies. BH Telecom
whose network covers 87,89% of the population and 96% of the roads specified in the licence annex has been
operating since 1996. Telekom Srpske whose services reach 95,2% of the population and 95,6% of the roads has
been operating since 1999. HT Mostar was launched in 2000 and covers 98,6% of the population and 96% of the
overall networks of roads (CARDS, 2006).
Infrastructure providers
160
140
120
100
80
60
40
20
0
143
64
3
3
40
40
39
Figure 4: Quantities of Infrastructure Providers in Bosnia and Herzegovina
Source: Cullen International, Country Comparative Report, 2005.
Although the licenses are nationwide licences, they operate mainly on geographic basis. Telekom
Srpske serves Republic Srpska and BH Telecom serves the north-east part of the Federation of Bosnia and
Herzegovina.
As of the end of 2007, there were 60 licenced Internet providers in BiH (CARDS, 2006).
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b. Statistics
Fixed Telephone Penetration
(number of connections per 100 inhabitans)
28
26
23,63
24
24,48 24,76
25,2
25,46
22,35
22
205: Fixed Telephone Penetration in Bosnia and Herzegovina
Figure
Source: CARDS, 2006.
The population of BiH is 4,672,165 as of 2007 and the per capita national income adjusted by
purchasing power is about USD 6,600. The number of Internet users is about 950,000 at the end of 2007, with a
penetration rate of 27.25%. The rate for fixed telephone lines is 26.41%. The broadband penetration rate is only
1.02% as of 2006. The average rate for broadband penetration is 18% for Europe. The number of XDSL lines in
21,664. The dominant technology in the country is XDSL and cable networks follows. There are 52 ISSs in BiH.
Mobile penetration rate is 63.29% in the year 2007 (SAS, 2008).
Mobile Penetration
(number of subscribers per 100 inhabitans)
80
63,29
60
36,62
41,48
48,77
40
20
0 6: Mobile Penetration in Bosnia and Herzegovina
Figure
Source: CARDS, 2006.
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Penetration of Internet Users
30
24,5
20,8
25
20
15,1
15
10
7
4
5
Figure0 7: Penetration of Internet Users in Bosnia and Herzegovina
Source: CARDS, 2006.
c.
Legal Structure
The frame of the legal structure in Bosnia and Herzegovina is constructed through the Law on
Communications (Official Gazette, no. 31/2003). The law entered into force in 2002 and confirmed the
authorization and responsibilities of the RAK. The Law adopts a convergent approach with a wide scope
including telecommunications, radio, broadcasting (including cable television) and connected services and
facilities. According to the Law the broadcasting segment of the communication sector is defined as “any pointto-multipoint emission of signs, signals, text, images, sounds or data by wire, optical fibre, radio, or any other
electromagnetic means intended for general reception by the public by means of receivers adapted for the
purpose” and “any legal or physical person providing broadcasting”.
The Law also defines a number of fundamental regulatory principles that in turn assign the scope of the
actions of the RAK, such as:
• The protection of freedom of expression and diversity of opinion while respecting common standards of
decency, non-discrimination, fairness, accuracy, and impartiality;
• The development of professional and viable commercial and public broadcasters with the intention of
striking an appropriate balance within the two;
• The principle that broadcasters shall be separated from political control and manipulation;
• Licenses shall be awarded on the basis of a process by which appropriate professional standards of program
content, technical operation and financing are ensured;
• Broadcast advertising shall be regulated so as to be consistent with the best European practice.
In accordance with the Bosnia and Herzegovina Law on Communications, and related to the regulatory
work in the field of creating bylaws, the RAK has created a number of various codes, rules and guidelines so far.
The Broadcasting Code of Practice and the Advertising and Sponsorship Code are of most important. During
2006, the process of matching the Advertising and Sponsorship Code with European regulation has been
completed, as well as the harmonization of the Broadcasting Code of Practice with the EU principles.
The Law on Public Broadcasting System of Bosnia and Herzegovina was passed by the Bosnia and
Herzegovina Parliamentary Assembly on October 5, 2005. It was adopted in January 2006.
As a member of the Council of Europe, Bosnia and Herzegovina ratified the European Convention on
Trans-frontier Television in 2005, which establishes fundamental rules concerning the content of television
transmission and specifically, among others, advertising and tele-shopping, protection of minors and right of
reply (Marko, 2008).
d. Regulatory Institution
The institution in charge of regulating the communication sector in Bosnia and Herzegovina (BiH) is
the Communication Regulatory Agency (RAK). It was established in March 2001 by the decision of the High
Representative that merges the competencies of two regulatory authorities, namely the Independent Media
Commission and the Telecommunications Regulatory Agency. This was the first step for a unique regulator in
the region that would regulate the whole communication sector, including the radio frequency spectrum (Marko,
2008).
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The main duties of the RAK:
• to spread rules on broadcasting and telecommunications, and ensure obedience thereto;
• to license broadcasters and telecommunications operators pursuant to the provisions of the Law, and monitor
their compliance with license conditions;
• to plan, manage, allocate and assign the frequency spectrum and monitor the use of it as well as to maintain
and publish a frequency usage plan for the entire territory of Bosnia and Herzegovina;
• to require the disclosure of such information as is necessary for the due performance of its regulatory
obligations;
• to apply technical and quality standards, for instance, to ensure interconnection and functionality of public
telecommunications networks and services;
• to establish and maintain a technical license-fee-system for both broadcasting and telecommunications;
• such other duties that are assigned to it under the Law.
In order to assure the efficiency of the actions of the RAK the Law attributes an enforcement power
including the competence to impose sanctions in case of breaches of the Law or RAK decisions. Also, if a
telecommunications or broadcasting network or service is being operated without a license, the Agency has the
power to take all necessary steps to stop the activity of such operations. In case of different violations, oral and
written warnings; inspection of licensed facilities; demands for action or cessation; financial penalty up to
€75,000; order the interruption of broadcasting or the provision of telecommunications services for a period not
exceeding three months; revocation of a license are the measures that the RAK may apply (Marko, 2008).
Telecommunication-Regulation and Sustainable Development
Providing access to the Internet may help to overcome at least some of the problems faced in the
development of rural areas. ICT offer the possibility of a very inexpensive access to government information, a
simple tool for marketing of agricultural produce, exchange of the market information, better financial support of
the agricultural sector, distance education etc. In addition, a better quality of life and improved living standards
for the poorest sections of the society would in part result from the expected lowering of the costs of
administrative services (fees, access to information, the dissemination of and the increase in the number of
services accessible to this social strata, through universally accessible service) (World Bank, 2004).
Macroeconomic data is beginning to demonstrate that the expansion and increased sophistication of the
ICT sector is vital for the self-sustainability and growth of the country’s overall economy.
Government fiscal and FDI policies are beginning to address the issues of encouraging long-term
investments in both technology and knowledge. In particular, the government has recently approved a wideranging Information Society Strategy and Action Plan, and established a state-level agency to coordinate the
Information Society agenda.
One of the most profound influences to the overall economic landscape and to the ICT sector in
particular, is Bosnia’s commitment to obtain EU Integration status by 2014. Substantial policy reforms and
essential market standards are expected to dramatically expand the economic opportunities for both domestic and
foreign investors.
A number of the country’s larger economic producers, including the telecommunications incumbents,
are scheduled to undergo privatization within 2006-08. Further, Bosnia’s Communications Regulatory Agency
(www.rak.ba) whose mission is to facilitate a proper and effective policy environment for the sector, has
established a reputation for independence (FIPA, 2005).
Recently, the telecoms and energy incumbents have undertaken the responsibility to join together with
other leading companies, university programs, and the SME sector to stimulate economic growth, particularly in
the fields of R&D and ICT.
On a more commercial level, ICT is beginning to experience convergence throughout multiple
economic and social sectors. Particularly in the e-banking, e-education, and e-government sectors, ICT goods
and value-added services possess substantial growth potential.
FDI specifically targeting the ICT sector is already developing, and the success stories clearly
demonstrate that the ICT sector is shaping up to be a priority sector for FDI (FIPA, 2005).
SWOT Analysis of Telecommunication and Regulation in Bosnia and Herzegovina
Strengths:
•
The independent status of the RAK is well established, in particular the legal arrangements regarding their
financial independence and the appointment of its Director General.
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•
•
•
Progress has been made regarding information society services. Bosnia and Herzegovina has ratified the
Council of Europe Convention on Cybercrime. Legislation on electronic commerce has also been passed.
The e-signature law was adopted in November 2006.
Some progress has been made as regards audiovisual policy and media, in particular in approximating
Bosnia and Herzegovina's legislation to the European Convention on Transfrontier Television. The
Advertising and Sponsorship Code has been revised in accordance with the Convention. The RAK has also
started the revision of the Broadcasting Code of Practice (Commission of the European Communities, 2007:
46).
With regard to foreign direct investments, the legal framework gives guarantees to foreign investors willing
to entry in the BiH markets (CARDS, 2006).
Weaknesses:
•
•
•
•
•
•
However, the three incumbent telecom operators (Telekom Srpske, BH Telecom and HT Mostar) still enjoy
de facto monopolies of fixed network operations in their respective operating areas (CARDS, 2006).
The outdated infrastructure, the monopolistic character of the market, the lack of a clear legislative
framework, and the inexperience of the operations of a free market are all shared obstacles (Verikoukis et
al., 2004).
The RAK needs to be better equipped in terms of human resources to be able to promote competition in the
market, in particular by improving the market conditions for alternative operators and by ensuring the
introduction and implementation of the necessary competitive safeguards. The capacity of the relevant
sections in the Ministry of Transport and Communications also need to be strengthened.
No progress has been made to transform the Citizens Identity Protection System Directorate into a Statelevel Agency for Information Society in charge of implementing the Strategy for Information Society and its
Action Plan, as well as of coordinating related activities throughout the country.
The implementing of e-signature law through by-laws still needs to be adopted. Legislation for conditional
access services has not yet been adopted.
The Federation of Bosnia and Herzegovina has been unable to adopt the necessary public broadcasting
legislation and the implementation public broadcasting reform continues to be delayed. Bosnia and
Herzegovina is not a party to the UNESCO Convention on Cultural Diversity. Ratifying this Convention is
necessary for Bosnia and Herzegovina's participation in media related Community Programmes
(Commission of the European Communities, 2007).
Opportunities:
•
In the light of BH strategies, it’s also expected to have a crucial impact in providing to foreign investors the
picture of open and attractive market (CARDS, 2006).
• The high probability of becoming a member of EU.
• Rich cultural diversity.
Threats:
•
•
•
•
Although the Feasibility Study has identified significant progress that was made by BiH in terms of the
telecommunication sector reform, the EU still sees a need for a more intensive cooperation, primarily in the
area of continued harmonization with the “Acquis Communitaire”. One area of special importance is the
continued improvement of legislative, regulative and institutional solutions in the area of ICT and postal
services, gradual liberalization, development of an investment friendly environment, and implementation of
European standards. The cooperation in the domain of strengthening the ICT infrastructure would assist the
development of informatic society in BiH. The Stability and Association Agreement (SAA) is only the
starting point in resolving some specific problems and it may serve as a channel for expansion of
cooperation in the ICT field (World Bank, 2004).
The possible adoption of the draft Law on Wages and Allowances, which would bring the RAK within the
civil service, could hinder RAK's independence (Commission of the European Communities, 2007).
A major issue is the difficulty in finding a right balance between the levels of wholesale prices (which need
to be cost oriented) with correspondent retail prices not yet fully rebalanced.
Although a smooth path towards LLU regulation can be agreed, nevertheless, it’s important to provide a
clear and reliable timescale of future development of the regulatory framework (CARDS, 2006).
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Conclusion and Policy Recommendations
Only in late 2000 Bosnia and Herzegovina as a country had really started to consider aspects and
ramifications of ICT, a field where it still lags behind, not only in comparison with the developed countries of
Europe and the rest of the world, but also with most transition countries. There are neither strategic guidelines
nor policies aimed at strengthening the awareness of the Bosnian society with regards to the necessity of the
broadest application of ICT and their possibilities. The existing legislation is not up to date with the job market,
nor does it address the new challenges created by it.
The sector of telecommunication infrastructure has been reduced to the telecom operators and their
technical and technological development. Liberalization of this market has become a much politicized issue,
although liberalization is already present in many segments, for instance, in provision of mobile telephone
services. On the other hand, due to significant omissions and lack of regulation in the communication sector, the
behaviour of telecom operators in some segments of the business has been unprecedented (World Bank, 2004).
Ensuring the independence of the Agency (including maintaining their financial independence and the
respect of the procedures in the appointment of the Director General) is of crucial importance to the development
of the broadcasting and (tele)communications market (Commission of the European Communities, 2007).
As aforementioned, the penetration rates for fixed telephone lines, mobile telephones and Internet have
been linearly increasing. However, the private sector ownership of the operators does not increase with the same
pace. For instance, as can be seen from Figures 2 and 3, the private sector ownership of BH Telecom remains the
same but in the cases of Telekom Srpske and HT Mostar private sector ownerships increase. Yet, the state of
BiH still has an ownership of more than 50% at all three companies. This, in turn, reveals that
telecommunication sector in BiH has an image of oligopolistic character but operates under the conditions of
monopolistic market. As a result, despite the dominant discourse in favour of private sector ownership, the
dominance of state ownership in BiH still lasts and therefore liberalisation process has a lot to do. On the other
hand, only 2 decades after the fall of real socialism in the territory, the degree of liberalisation so far may be
perceived as a success.
References
CARDS (European Community Assistance for Reconstruction, Development and Stabilisation Programme), (2006),
Overview of the Communications Sector in Bosnia and Herzegovina, The Harmonization with the EU Standards and the
Role of the Communications Regulatory Agency.
Commission of the European Communities, (2007), Bosnia and Herzegovina 2007 Progress Report, Enlargement Strategy
and Main Challenges 2007-2008, Brussels,
[http://ec.europa.eu/enlargement/pdf/key_documents/2007/nov/bosnia_herzegovina_progress_reports_en.pdf], last access:
May 19th, 2009.
Cullen International, (2005), Supply of Services in Monitoring of South East Europe – Telecommunication Services Sector
and Related Aspects.
FIPA (Foreign Investment Promotion Agency of Bosnia and Herzegovina), (2005), Bosnia and Herzegovina ICT Sector
Profile, Sarajevo.
Marko, D., (2008), The Impact of the EU Audiovisual Media Services (AVMS) Directive on Freedom of Speech in the PostCommunist Democracies of Central and South Eastern Europe, South East European Network for Professionalization of
Media (SEENPM), Sarajevo.
SAS (Sektörel Araştırma ve Stratejiler Dairesi Başkanlığı), (2008), Dünya Telekomünikasyon ve Bilgi Teknolojileri
Pazarları, [http://www.tk.gov.tr/Yayin/Raporlar/2008/DunyaTelekomunikasyonPazari-25-03-08.pdf], last access: May 19th,
2009.
Verikoukis, CH., Z. Mili, I. Konstas and P. Angelidis, (2004), “Overview on Telecommunications Regulation Framework in
Southeastern Europe”, IEEE MELECON, Dubrovnik, Croatia,
[http://ieeexplore.ieee.org/stamp/stamp.jsp?tp=&arnumber=1347003&isnumber=29653], last access: May 19th, 2009.
World Bank, (2004), Bosnia and Herzegovina Joint IDA-TMF Staff Assessment of the Poverty Reduction Strategy Paper,
Report No: 29034-BH,
[http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2004/05/25/000090341_20040525102031/Rendered/IND
EX/29034.txt], last access: May 19th, 2009.
457
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Title
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Telecommunication Sector in Bosnia and Herzegovina: An Overview Telecommunication, Regulation & Sustainable Development
Author
Author
ÖZALTIN, Oğuzhan
SEZGiN, Aykut
DEMiREL, Onur
Abstract
A summary of the resource.
The aim of the study is to investigate the telecommunication sector in Bosnia and Herzegovina with respect to the liberalisation process mentioned by the Public Governance Committee of the OECD and the sustainable development goals introduced by the World Bank. It is analyzed that how telecommunication sector has been regulated in the post-war period, the sectoral structure, legal infrastructure and regulatory agency characteristics are represented and finally a SWOT analysis is made for the telecommunication sector in Bosnia and Herzegovina and the Communication Regulatory Agency.
Date
A point or period of time associated with an event in the lifecycle of the resource
2009-06
Keywords
Keywords.
Conference or Workshop Item
PeerReviewed
HB Economic Theory
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https://omeka.ibu.edu.ba/files/original/979dc0ba6dcf7d44adbf0f7423bf07a2.pdf
f6d3143378f5639cf64f8851890119d2
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Text
1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
Democracy and Economic Development in Turkey:
An Exploratory Spatial Data Analysis
Fatih ÇELEBĐOĞLU
Dr., University of Dumlupinar, Faculty of Economics and Administrative Sciences,
Department of Economics, Kutahya, Turkey
fcelebi@dumlupinar.edu.tr
Hüseyin ALTAY
Dr., University of Bilecik, Faculty of Economics and Administrative Sciences,
Department of Economics, Bilecik, Turkey
haltay16@hotmail.com
Abstract: The aim of this paper is to perform an exploratory spatial data analysis on the
democracy and development level of the 76 Turkish regions over 1995-2001. While our
choropleth maps indicate that the Western part of the country is significantly more developed
than the East, the tools of spatial statistics reveal the presence of spatial dependence across
provinces. The presence of heterogeneity is reflected in the distribution of LISA statistics.
Overall, our results shed new light on the distribution of growth across Turkish regions and its
relation with participation rates in general elections.
Key words: Turkey, Democracy, Regional Disparities, Spatial Statistics
Introduction
Democracy is a form of government in which state-power is held by the majority of citizens within a
country. All the people should be able to have their say in one way another in everything that affects their lives.
It is interesting that almost each developed countries have high level democracy and civil freedom.
Furthermore, democracy is related to the level of economic development of a particular country. For this reason,
relations between democracy and economic development are intensively examined by economists in the recent
years.
The first cross-national study on world democratizations emphasized the conditioning effect of
industrialization and economic development was performed by Lipset (1959) in his seminal study. Bollen
(1979) explores the relationship between development timing and political democracy. Arat (1988) explore
democratic instability and economic development. Burkhart and Lewis-Beck (1994) finds that economic
development "causes" democracy, but democracy does not "cause" economic development. Muller (1995)
investigates that the relationship between the level of economic development and the level of democracy found
in most quantitative cross-national research.
Barro (1999) finds that improvements in the standard of living predict increases in democracy for over
100 countries from 1960 to 1995. Rodrik (1999) reviews those relations among labor productivity, income
levels, the level of manufacturing wages and democracy. Przeworski et al. (2000) implies relations between
democracy and development. Hayo (2001) analyzes whether attitudes towards the progress in democratization
in Eastern Europe is influenced by economic factors. Heo and Tan (2001) perform causal analysis about
relations between democracy and economic growth. Öniş and Türem (2002) look into relations among
entrepreneurs, democracy, and citizenship in Turkey. Lee (2005) tests explanations of how public sector size
and democracy affect income inequality. Rabinson (2006) researches that the effects of economic development
on democracy.
In this study, we examine relations between democracy and economic development in terms of
regional (provincial) level in Turkey by using Exploratory Spatial Data Analysis (ESDA).
Turkey and Regional Development
Turkey is formally composed of several provinces used as administrative units. The definition of
regions is only used for geographic classification purposes (for example Marmara, Aegean, Southeastern areas)
and to cluster provinces according to their level of economic development. For instance, the provinces located
in the Southeastern and Eastern Anatolia areas are known to be lagging behind in economic and social terms.
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A couple of reasons have been highlighted in the past to justify the East-West divide that has marked
the Turkish regional economies for a couple of decades (Ates et al. 2000; Balkir 1995; Gezici and Hewings
2004). They are, among others, inequalities in salaries (Elveren and Galbright, 2008), the dependence on
agriculture and weakness of industrial sector (Ozaslan et al. 2006), the divide in the education level (Ozturk
2002), the migratory flows from the east to the west (Kirdar and Saracoglu 2007), and the lack of private
investment in the east (Deliktas et al. 2008). However, it is very difficult to assess the extent to which the
phenomena above are the reason or the consequence for the divide observed within Turkey.
Following the spirit of the literature cited above, the aim of this paper is to investigate inequalities
across the 76 Turkish regions over 1995-2001 by means of an exploratory spatial data analysis (ESDA). It is a
set of techniques used to describe and visualize spatial distributions, identify atypical locations or spatial
outliers, discover patterns of spatial association, clusters or hot spots, and suggest spatial regimes or other forms
of spatial heterogeneity (Anselin 1988 and 1999). Several ESDA have been performed on the issue of regional
inequalities. For instance, Dall’erba (2005), Ezcurra et al. (2007), Battisti and Di Vaio (2008) focus on the EU
regions.
ESDA offers the opportunity to compare the differences between the eastern and western provinces by
means of choropleth maps, box plots and scatter plots and measure the extent of spatial autocorrelation.
Data analysis
Our dataset comes from the Turkish Statistical Institute and the State Planning Organization. They
represent for each region the level of per capita income in 1995, the growth rate of per capita income over 19952001, participation rates to general election of the region in 1995 and province level literacy rates in 1995. All
data are expressed in 1987 constant prices. The time frame we use (1995-2001) is limited by data availability.
Indeed, data before and after that period simply do not exist at the regional level. As a result, even if Turkey
currently counts 81 provinces, we are obliged to work with the 76 provinces that correspond to that period.
Mapping the Distributions
We start our analysis with the quartile maps of the distribution of our variables for each province.
Figure 1 displays the distribution of the regional growth rate of per capita GDP relative to Turkey’s average
over 1995-2001. The darker areas indicate a greater level of relative growth. It appears from this map that the
distribution of growth is pretty random, which is an idea that will need to be assessed in the next section.
Fig. 1 Growth Rate for period 1995-2001 in Turkey
Figure 2 displays the distribution of regional per capita GDP levels in 1995 relative to Turkey’s
average. A clear core-periphery (or east / west) pattern appears in this map, with the core composed of the
richest regions, whereas the peripheral regions are also the poorest ones. This confirms the findings of the
various studies mentioned in the introduction above. In the Western part of the country, the coastal areas and the
province of the capital city are clearly better off than the rest of the country. This is because trade, industry and
tourism are developed in these areas.
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Fig. 2 Log of GDP per capita (1995) in Turkey
Figure 3 shows participation rates to 1995 general elections. This result is clearly indicates that participation
rates in Turkey’s East part are lower than West part.
Fig.3 Participation Rates to 1995 General Elections in Turkey
Figure 4 may give us more insights into the East-West disparities mentioned so far. Indeed, as can be
seen on this quartile map, literacy rates as % of population in Turkey (in 1995 and relative to Turkey’s average)
is much greater in the West than in the East.
Fig. 4 Province Level Literacy Rates in Turkey (1995)
As a result, it can be linkage that low level participation to democratic elections and low literacy rates
in the East part of Turkey.
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Box Plots
The box plot is another tool of ESDA. Designed by John Tukey (1977), box plots display five
interesting pieces of information about a dataset: the lowest value, the lower quartile of the distribution (25% of
the cumulative distribution, noted Q1), the median (Q2), the upper quartile (75% of the cumulative distribution,
noted Q3), and the highest value. The median is represented by the line in the center of the rectangular box. In
addition, a box plot displays the outliers which are defined as the values above or below a given multiple (either
1.5 or 3) of the difference between the first and third quartile. For instance, a lower outlier corresponds to a
value below [Q1-1.5*(Q3-Q1)] and an upper outlier is defined as a value above [Q3+1.5*(Q3-Q1)]. The thin
line on the upper part of box plots is called the hinge, here corresponding to the default criteria of 1.5 times the
difference between the first and third quartile (Thompson 2003).
The box plots of our variables appear in figures 5 to 8. They show that Bolu and Zonguldak are the
only (upper) outliers in the distribution of provincial growth rate; while only Kocaeli is the province with the
highest value of per capita GDP in 1995 but it is not an outlier. Manisa is the province with the highest value of
participation rates to general elections and Đstanbul has the highest value of literacy rates but they are not an
outlier also.
Canakkale is the province with the lowest value of growth rate in the period of 1995-2001. There are
two lowest values (Agri and Mus) in the distribution of log of per capita GDP in 1995. While Ağrı, Batman,
Bitlis, Diyarbakır, Hakkari, Mardin, Muş, Şanlı Urfa, Siirt and Van are the provinces with the lowest values in
the distribution of literacy rates, other some provinces (Ağrı, Ardahan, Bingöl, Bitlis, Diyarbakır, Erzincan,
Gümüşhane, Iğdır, Kars, Rize, Siirt, Şırnak and Tunceli) have the lowest values in the distribution of the share
of the population with a university degree.
Quartile maps and box plots are useful tools to get some insights into the distribution of a variable.
However, they do not formally test whether the spatial distribution of a variable is random or not. For instance,
the distribution of the per capita income and province level literacy rates across Turkish provinces is marked by
two distinct clusters (East vs. West) as can be seen from figures 2 and 4 above. This observation needs to be
tested by the formal tools of Exploratory Spatial Data Analysis. It starts with the definition of a spatial weight
matrix and continues with the measurement of spatial autocorrelation.
Fig.5 Growth rate for period of 1995-2001 in Turkey
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Fig.6 Log of Per Capita GDP in Turkey (1995)
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Fig.7 Participation rates to General Elections in Turkey (1995)
Fig.8 Province Level Literacy Rates in Turkey (1995)
Exploratory Spatial Data Analysis (ESDA)
Spatial Weight Matrix
A spatial weight matrix is the necessary tool to impose a neighborhood structure on a spatial dataset.
As usual in the spatial statistics literature, neighbors are defined by a binary relationship (0 for non-neighbors, 1
for neighbors). All our work is performed under GeoDa. We have used a basic approach for defining
neighborhood: contiguity (shared borders). Contiguity-based weights matrices include rook and queen. Areas
are neighbors under the rook criterion if they share a common border, not vertices. Based on this concept, we
decided to create a weight matrix to investigate the distribution of our variables of interest: k_7 nearest neighbor
matrix. We present the k_7 nearest neighbor matrix only below:
w (k ) = 0 if i = j
ij
*
wij (k ) = 1 if dij ≤ Di (k ) and wij (k ) = wij (k ) / ∑ wij (k ) for k = 7
j
w (k ) = 0 if d > D (k )
ij
i
ij
(1)
dij is great circle distance between centroids of region i and j and Di (k ) is the 7th order smallest
distance between regions i and j such that each region i has exactly 7 neighbors. Now that the weight matrix
where
has been defined, we estimate a couple of spatial statistics that will shed some light on the spatial distribution of
our variables. The most common of them is Moran’s I which is a measure of global spatial autocorrelation
(Anselin 1988).
Moran’s I for Global Spatial Autocorrelation
Spatial autocorrelation refers to the correlation of a variable with itself in space. It can be positive
(when high values correlate with high neighboring values or when values correlate with low neighboring values
low) or negative (spatial outliers for high-low or low-high values). Note that positive spatial autocorrelation can
be associated with a small negative value (e.g., -0.01) since the mean in finite samples is not centered on 1.
Spatial autocorrelation analysis includes tests and visualization of both global (test for clustering) and local (test
for clusters) Moran’s I statistic (Anselin et al. 2006).
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Global spatial autocorrelation is a measure of overall clustering and it is measured here by Moran's I. It
captures the extent of overall clustering that exists in a dataset. It is assessed by means of a test of a null
hypothesis of random location. Rejection of this null hypothesis suggests a spatial pattern or spatial structure,
which provides more insights about a data distribution that what a quartile map or box plot does. For each
variable, it measures the degree of linear association between its value at one location and the spatially weighted
average of neighboring values (Anselin et al. 2007; Anselin 1995) and is formalized as follows:
n
It =
n *
wij (k ) xit x jt
∑∑
i =1 j =1
n
(2)
n
∑∑ xit x jt
i =1 j =1
*
Where
wij
is the (row-standardized) degree of connection between the spatial units i and
j and x ij is
the variable of interest in region i at year t (measured as a deviation from the mean value for that year). Values
of I larger (smaller) than the expected value E(I ) = −1/ (n −1) indicate positive (negative) spatial
autocorrelation. In our study, this value is (-0.0133). There are different ways to draw inference here. The
approach we use is a permutation approach with 999 permutations. It means that 999 re-sampled datasets were
automatically created for which the I statistics are computed. The value obtained for the actual dataset has then
been compared to the empirical distribution obtained from these re-sampled datasets.
The results of Moran’s I are presented in table 1 below. All the results indicate a positive spatial
autocorrelation, i.e. the value of a variable in one location depends positively on the value of the same variable
in neighboring locations. For instance, when the per capita income in one province increases by 1%, the one of
its neighbors increases by slightly more than 0.6%. Three out of our four variables of interest are significant (at
1%) with the k_7 nearest neighbor matrix. For this reason, this is the weight matrix we will use in the rest of our
study.
Table 1: Moran’s I and P-Value
Variables
K_7
Growth Rate (1995-2001)
0.045
(0.129)
Log of Per Capita GDP (1995)
0.647
(0.001)
Participation Rates to Gen. Elections (1995)
0.706
(0.001)
Literacy Rates (1995)
0.799
(0.001)
Note: p-values are into brackets
Moran’s Scatter plot for Global and Local Spatial Autocorrelation
The Moran scatter plot often complements Moran’s I because it provides an easy way to categorize the
nature of spatial autocorrelation into four types: low-low (noted LL), low-high (LH), high-low (HL) and highhigh( HH) with the first part refereeing to the studied location itself and the second part refereeing to the
neighboring ones. For instance, HH means a high value in the studied area and a high value in the neighboring
areas. The four types are reflected in the four quadrants that compose a Moran’s scatter plot. The link between a
scatter plot and Moran’s I is reflected by a line of which slope is the value of Moran’s I statistic.
Regions located in quadrants I and III refer to positive spatial autocorrelation, the spatial clustering of
similar values, whereas quadrants II and IV represent negative spatial autocorrelation, the spatial clustering of
dissimilar values.
Figures 9 to 12 below display the Moran scatter plots of our variables of interest. For both the per
capita income, participation rates and literacy rates, positive spatial autocorrelation is reflected by the value of
Moran’s I and the fact that most of the provinces are located in quadrants HH and LL with HH displaying a
cluster a Western provinces while LL shows a cluster of Eastern provinces. Once again, it reflects the dualistic
structure of Turkey’s provinces.
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Fig. 9 Growth rate for period of 1995-2001 in Turkey
Fig. 11 Participation Rates to General elections (1995)
Fig. 10 Log of Per Capita GDP in Turkey (1995)
Fig. 12 Province Level Literacy Rates in Turkey (1995)
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Table 2 indicates the name of the regions according to their distribution in the Moran scatterplot
quadrants. Positive spatial autocorrelation is reflected by the fact that most provinces are in the high-high and
low-low quadrants. More precisely, for the per capita GDP, participation rate and literacy rate variables, the
Western provinces are mostly High-high areas while the Eastern ones are Low-Low. Obviously, the Low-High
and High-Low quadrants contain fewer provinces.
Table 2 Distribution of Spatial Autocorrelation
LH
HL
Growth rate for
period of 1995-2001
Ağrı, Bayburt, Bingöl, Bitlis,
Eskişehir, Giresun, Gümüşhane,
Hakkari, Iğdır, Kastamonu,
Kayseri, Kocaeli, Muş, Ordu, Rize,
Sivas, Tunceli, Van, Zonguldak,
Bolu
HH
Aksaray, Antalya, Aydın,
Balıkesir, Burdur, Bursa,
Çanakkale, Corum, Elazığ, Đçel,
Đzmir, Karaman, Kırıkkale,
Konya, Kütahya, Samsun,
Şanlıurfa, Tekirdağ, Uşak,
Yozgat, Đstanbul, Gaziantep
LL
Afyon, Batman,
Denizli, Edirne,
Isparta,
K.Maraş,
Kırklareli,
Kırşehir,
Manisa, Muğla,
Nevşehir, Niğde,
Sinop, Tokat
Log of province
level per capita
GDP (1995)
Ankara, Antalya, Aydın, Balıkesir,
Bilecik, Burdur, Bursa, Çanakkale,
Denizli, Edirne, Eskişehir, Đçel,
Đzmir, Karaman, Kastamonu,
Kırklareli, Konya, Kocaeli,
Kütahya, Manisa, Muğla, Niğde,
Sakarya, Tekirdağ, Uşak, Đstanbul,
Zonguldak, Adana, Bolu
Adıyaman, Ağrı, Ardahan,
Batman, Bayburt, Bingöl, Bitlis,
Diyarbakır, Erzincan, Erzurum,
Giresun, Gümüşhane, Hakkari,
Iğdır, K.Maraş, Kars, Kırşehir,
Malatya, Mardin, Muş, Ordu,
S.Urfa, Siirt, Sinop, Şırnak, Sivas,
Tokat, Tunceli, Van
Afyon, Aksaray,
Bartın, Çankırı,
Isparta, Yozgat
Adıyaman,
Amasya,
Ankara,
Ardahan, Artvin,
Bartın, Bilecik,
Çankırı,
Diyarbakır,
Erzincan,
Erzurum, Hatay,
Kars, Malatya,
Mardin,
Sakarya, Siirt,
Şırnak, Trabzon,
Adana
Amasya, Artvin,
Corum, Elazığ,
Hatay, Kayseri,
Kırıkkale,
Nevşehir, Rize,
Samsun,
Trabzon,
Gaziantep
Participation to
General
Elections (1995)
Afyon, Ankara, Antalya, Aydın,
Balıkesir, Bartın, Bilecik, Burdur,
Bursa, Çanakkale, Çankırı, Çorum,
Denizli, Edirne, Eskişehir, Isparta,
Đzmir, Karaman, Kastamonu,
Kırıkkale, Kırklareli, Kocaeli,
Konya, Kütahya, Manisa, Muğla,
Nevşehir, Sakarya, Samsun,
Tekirdağ, Tokat, Uşak, Yozgat,
Zonguldak, Bolu
Adana, Adıyaman, Ağrı,
Ardahan, Artvin, Batman,
Bayburt, Bingöl, Bitlis,
Diyarbakır, Elazığ, Erzincan,
Erzurum, Giresun, Gümüşhane,
Iğdır, K.Maraş, Kars, Malatya,
Mardin, Muş, Ordu, Rize,
Şanlıurfa, Siirt, Şırnak, Sivas,
Trabzon, Tunceli, Van, Gaziantep
Amasya,
Hakkari, Hatay,
Kayseri
Aksaray, Đçel,
Kırşehir, Niğde,
Sinop, Đstanbul
Literacy Rates
(1995)
Adana, Afyon, Aksaray, Ankara,
Antalya, Aydın, Balıkesir, Bartın,
Bilecik, Bolu, Burdur, Bursa,
Çanakkale, Çankırı, Denizli,
Edirne, Erzincan, Eskişehir,
Gümüşhane, Đçel, Isparta, Đstanbul,
Đzmir, Karaman, Kayseri,
Kırıkkale, Kırklareli, Kırşehir,
Kocaeli, Konya, Kütahya, Manisa,
Muğla, Nevşehir, Niğde, Sakarya,
Samsun, Sivas, Tekirdağ, Trabzon,
Uşak, Yozgat, Zonguldak
Adıyaman, Ağrı, Ardahan,
Batman, Bingöl, Bitlis,
Diyarbakır, Elazığ, Erzurum,
Gaziantep, Hakkari, Iğdır,
K.Maraş, Kars, Mardin, Muş,
Şanlıurfa, Siirt, Şırnak, Tunceli,
Van
Amasya, Artvin
Bayburt, Hatay,
Malatya, Rize
Çorum, Giresun,
Kastamonu,
Ordu, Sinop,
Tokat
LISA Statistics for Local Spatial Autocorrelation
LISA statistics (Local Indicators of Spatial Autocorrelation) measure, by definition, the presence of
spatial autocorrelation for each of the location of our sample. It captures the presence or absence of significant
spatial clusters or outliers for each location. Combined with the classification into four types defined in the
Moran scatter plot above, LISA indicates significant local clusters (high–high or low–low) or local spatial
outliers (high–low or low–high). The average of the Local Moran statistics is proportional to the Global Moran's
I value (Anselin 1995; Anselin et al. 2007).
Anselin (1995) formulated the local Moran’s statistics for each region i and year
x
I i = i ∑ wij x j
m0 j
224
with m0 = ∑ xi2 / n
i
t
as the follows:
(3)
�1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
where
wij is the elements of the row-standardized weights matrix W and xi ( x j ) is the observation in region
i ( j) .
Once again, this result reflects the will of the authorities to counterbalance poverty in the East. We provide the
LISA maps (figures 13 to 16) as a visual representation of these results.
Fig. 13 Cluster Map (Growth Rate 1995-2001)
Fig. 14 Cluster Map (Log of Per Capita GDP 1995)
Fig. 15 Cluster Map (Participation Rates in 1995)
Fig. 16 Cluster Map (Literacy Rates in 1995)
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�1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
Conclusions
The aim of this paper has been to perform an exploratory analysis of the economic disparities across 76
Turkish provinces. We have investigated the spatial distribution of growth over 1995-2001, of the per capita
GDP, participation rates and literacy rates in 1995 across these provinces. First, our quartile maps have revealed
the gap between East and West when it comes to per capita GDP, participation rates and literacy rates. Second,
the Box plots showed that West Anatolia and the coastal area provinces are upper outliers in the distribution of
almost all our variables. When we measure spatial autocorrelation by means of Moran’s I, our results indicate
positive (and significant) global autocorrelation for all our variables except growth, thus indicating the
geographical location of a province influences its level of income, participation rates and literacy rates.
These results are corroborated by the corresponding Moran’s Scatterplots that display most of the
eastern provinces in the Low-Low quadrant and the western ones in the High-High quadrant. Finally, LISA
statistics confirm the significant presence of local spatial autocorrelation and highlight spatial heterogeneity in
the form of two distinct spatial clusters of high and low values of per capita income. Overall, these results
confirm the dualistic structure of Turkey’s economic geography, as many previous studies had showed.
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Democracy and Economic Development in Turkey: An Exploratory Spatial Data Analysis
Author
Author
ÇELEBiOĞLU, Fatih
ALTAY, Hüseyin
Abstract
A summary of the resource.
The aim of this paper is to perform an exploratory spatial data analysis on the democracy and development level of the 76 Turkish regions over 1995-2001. While our choropleth maps indicate that the Western part of the country is significantly more developed than the East, the tools of spatial statistics reveal the presence of spatial dependence across provinces. The presence of heterogeneity is reflected in the distribution of LISA statistics. Overall, our results shed new light on the distribution of growth across Turkish regions and its relation with participation rates in general elections.
Date
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2009-06
Keywords
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Conference or Workshop Item
PeerReviewed
HB Economic Theory
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1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
Factors That Affect Life Values
“A Research on the Students of Suleyman Demirel University”
Đlker Hüseyin ÇARIKÇI
Assoc. Dr., Süleyman Demirel University, Isparta, Turkey
ihcarikci@iibf.sdu.edu.tr
Ahmet Sait ÖZKUL
asozkul@sdu.edu.tr
Sebahattin TAŞ
sbhttntas@hotmail.com
Abstract:This study aims to determine the life values profiles of the students of Suleyman
Demirel University according to demographic variables whether it changes. The theory part of
the research about life values is consist of Maslow, Rokeach, Hofstede and Schwartz Value
Theories. The domain of the research is 600 students from five different faculties of Suleyman
Demirel University. Gungor’s Life Values scale was used for questionnaire of the research.
First, the principal component analyses was applied to the scale. As a result, the life values
could be collected in three factors. Later, these factors were tested with the demographic
factors which were chosen. At the analyses, independent sample t test, One Way Anova and
principal component analyses methods were used.
Value Notion
Value notion was initially explained by famous social psychologist Milton Rokeach’s (1973)
expressions. Rokeach gave master assumptions about nature of human values preferential consideration in order
to make description on value. These assumptions are stated as follows:
1) Total number of values owned by an individual is relatively small.
2) Individuals undertake same values with different levels.
3) Organization of values eventuated in value systems.
4) Culture, society, associations and personality of the individual are effective in development of an
individual’s values.
5) Value’s importance outstands and evidently observed in every piece of social science’s spehere of
interest.
Rokeach defined value as “enduring belief that a specific mode of conduct or end-state of existence is
personally or socially preferable to an opposite or converse mode of conduct or end-state of existence” on the
basis of above assumptions. (Rokeach, 1973: 3,5)
Geert Hofstede (1980) who made broad intercultural research on values, expressed value as “a great
tendency towards preferring specific states than alternatives.”(Hofstede, 1980: 19)
Shalom Schwartz (1999) who performed considerable efforts on values, describes value as, “a social
actor which helps in choosing behaviours/actions, evaluating people, explaining behaviours/actions” and defines
as “desirable purposes serve as guiding principles within variable importance in the lives of people” (Schwartz,
1999: 24–25)
In other words, values defined as, “verbal representatives of master motivations approved by society.”
(Struch and others, 2002: 16–17)
Erol Gungor who is recognized by his studies on Values Psychology, defines value as, “belief respect to
anything desirable or unenviable.” (Gungor, 2000: 27)
Schwart defines the properties of values as follows.
1) Values are beliefs. But, they are not objective/not subjective/neutral and cold beliefs, they are
bonded/committed with strong feelings which are sometimes impasse/inevitable.
2) Values have motivational structure. Values contain desirable targets and they are about these targets
which people show strenuous efforts to achieve.
3) Values are the concepts which are upon specific movements/behaviours and occasions. Values are
metaphysical targets. This metaphysical structure differentiates values from concepts like norms and attitiudes
mostly related to special movements, objects or occasions.
4) Values lead in evaluating and selecting events, people, behaviour patterns and movements. This case is
the indicator of values serving as leading standards and criterias.
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�1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
5) Values are arranged/lined up by comparative importance of a condition to another. These lined up values
network yields to value priorities to be formed. People’s value figure is a steady system of value priorities which
defines/describes/characterized them individually. Values’ hierarchical feature differentiate themselves from
norms and attitudes. (Schwartz, 2007)
Value Theories
Leading life theorists can be listed as, Abraham Maslow, Milton Rokeach, Geert Hofstede and Shalom
Schwartz.
Maslow told that needs and values are in relation one another hierarchical and developmental in terms
of power and priority. According to Maslow, needs are values. He said that the only value that every single
person wants to attain is to actualize oneself. According to Maslow’s postulate, if the needs at lower levels are
met/satisfied, the higher needs are conspicuous. As it is specified above, together with the thought Maslow had
that the condition that person is in at that moment without realising a new need is the most important need while
he was representing that some of the factors may influence for good. (Oishi and others, 1999: 981; Malka and
Chatman, 2003: 744)
Rokeach emphasized that values can be categorized as instrumental and terminal. According to
Rokeach, terminal values are classified as individual-centric/subjective (intrapersonal) values and societycentric/social (interpersonal) values. He specified that this classification that he spoke out can be in the form of
interpersonal and transpersonal, and he specified the distinction of these two forms, as an example; personal
purpose expressions like person’s peace of mind and salvation are transpersonal values, on the other hand,
communal purpose expressions like world peace and fellowship are interpersonal values. (Rokeach, 1973: 7-8)
According to Hofstede, values also have two features; intensity (importance level) and direction (what it
implies). He expressed that if an individual accepts a value, these features have great importance to respond the
questions in the subject of how much this value is important for him and to what level it is suitable for that
individual. According to Hofstede, reason for the individual to determine some behaviours as good and some as
bad is resulting from the characteristic of the values’ direction/orientation and people differentiate in terms of
intensity or direction or both. Hofstede set off this with an example. According to him, the money is important
for the one who heeds/adopts Holy Book-Bible (intensity), nonetheless having less is important than having a
lot of (Direction). According to present day’s values, money is still important (Intensity), but it is important that
the money is a lot not the less (Direction). However, money is no consideration for some people (Intensity).
(Hofstede, 1980: 20)
Schwartz told that the content which abstracts values are the motivational purpose types that values
signify, and he assumed that value types result from three universal requirements. He declared these basic
assumptions as,
1) Biologic reasoned basic requirements of individudal’s organism,
2) Social interaction requirements among individuals,
3) Social requirements which provide continuity and affluence of societies and groups (Roccas and others,
2002: 790)
As a reply to the question, “What are the basic contents of the values?”, Schwartz expressed that
universal requirements of human existence form the basis of the values. (Bardi and Schwartz, 2003: 1208)
Schwartz expressed that societies and individuals represent their universal requirements consciously
which they should overcome. (Ros and others, 1999: 51)
Students’ Point of Vıew on Life and Work Values
Life values of the students, who have many expectations from daily life and working life, is the main
subject of the research. In this study, life values of university students were tried to be profiled and the subject of
which values the students give the most importance was accentuated.
Model of the below study’s hypothesis is seen as:
Model of Research Hypothesis
Demographic Factors
Life Values
Gender
Ideal Values
High School
Faculty
Belief Values
Class
Birth Place
Economic Values
Resident Area
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Cosmos of the research is Undergraduate and Associate Degree students of Suleyman Demirel
University in 2006–2007 Fall and Spring Semester. %1-%2 of the students of Suleyman Demirel University
participated in this research. A fixed number of scale of Life and Work Values handed out to 750 students with
the criteria of academic unit (Faculty/MYO) and gender differences and 600 of them filled out the survey and
took part in the implementation. Because the non-proportional quota sampling model has been applied, 120 each
person has been selected from each faculty. 60 each person from both first and senior classes from each faculty
has been selected. 300 each person has been selected as in equal for the number of female and male students.
Findings of the Research
1.
Reliability Analysis: Reliability coefficient for life values scale in Cronbach-Alpha personal
consistency analysis was 0,8295 and N: 573.
2. Life Values Factor Analysis
According to the results obtained from life values scale, factors were formed and they were called upon
the predominance of the topics.
Calling of Life Values Factors
Factor 1: Ideal Values (Total Variance Contribution: % 26,088)
1) Provide equity
2) Fight for Independence
3) World in which ignorance purified
4) Help People
Factor 2: Belief Values (Total Variance Contribution: % 22,900)
1) Purification of sins
2) Achieve eternity-beyond
3) Peace in conscience
Factor 3: Economic Values (Total Variance Contribution: % 16,728)
1) Economic independency
2) Live in easy circumstances
As it is stated at the first factor, political and notional statements that person wants to do/achieve/fulfill
priority consideration in life, and in general, because it reflects the ideals not the realities first factor is called as
Ideal Values. Because the second factor emphasizes the spiritual feelings and belief dimension of an individual,
it is called as Belief Values. In the last factor, individual’s eagerness to economic independency and desire to
live in easy circumstances to be monitored so it is called as Economic Values.
3.
Life Values of Demographic Factors
In this section, whether there’s difference or not of demographic factor groups over on life value factors
in terms of attitudes of students was researched. Relations between demographic factors and variables added up
under the name of examined factors that were stated before with the applied analysis. All hypothesis has been
developed in this context.
Gender and Life Values
• Gender-Ideal Values
Independent Samples Test
Levene's Test for
Equality of Variances
F
SIYASI1
SIYASI2
TEORIK2
SOSYAL2
490
Equal variances
assumed
Equal variances
not assumed
Equal variances
assumed
Equal variances
not assumed
Equal variances
assumed
Equal variances
not assumed
Equal variances
assumed
Equal variances
not assumed
Sig.
1,382
,240
,534
,465
,203
,653
6,004
,015
t-test for Equality of Means
t
df
Sig. (2-tailed)
Mean
Difference
Std. Error
Difference
95% Confidence
Interval of the
Difference
Lower
Upper
-,704
596
,481
-3,801E-02
5,396E-02
-,1440
6,796E-02
-,705
593,748
,481
-3,801E-02
5,395E-02
-,1440
6,794E-02
-,260
593
,795
-1,247E-02
4,788E-02
-,1065
8,157E-02
-,261
588,959
,795
-1,247E-02
4,788E-02
-,1065
8,156E-02
,506
595
,613
2,454E-02
4,854E-02
-7,08E-02
,1199
,506
590,318
,613
2,454E-02
4,853E-02
-7,08E-02
,1199
1,420
596
,156
6,893E-02
4,854E-02
-2,64E-02
,1642
1,419
581,009
,156
6,893E-02
4,856E-02
-2,65E-02
,1643
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Sig. (2-tailed) values of all variables are above 0,05. This case shows that no difference is noted in
attitudes of students towards ideal values among gender groups. As a result, the hypothesis of “There’s no
difference in attitudes of SDU students towards ideal value variables as per gender groups.” is accepted.
Furthermore, the result of “Gender groups did not give rise to changes of attitudes in belief and economic
values” is seen by the applied analysis.
High School which was Graduated and Life Values
• High School – Ideal Values
ANOVA
SIYASI1
SIYASI2
TEORIK2
SOSYAL2
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Sum of
Squares
6,160
253,472
259,632
1,229
201,050
202,279
,703
208,604
209,307
1,262
209,347
210,609
df
6
591
597
6
588
594
6
590
596
6
591
597
Mean Square
1,027
,429
F
2,394
Sig.
,027
,205
,342
,599
,731
,117
,354
,331
,920
,210
,354
,594
,736
Sig. values of all variables except first one are above 0,05. No difference is noted in attitudes of
students towards ideal values among high school groups. In this case, the hypothesis of “There’s no difference in
attitudes of SDU students towards ideal value variables as per high school groups.” is accepted.
• High School-Belief Values
ANOVA
DINI1
DINI2
AHLAKI2
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Sum of
Squares
10,483
328,097
338,579
9,348
448,403
457,750
7,672
210,150
217,822
df
6
585
591
6
586
592
6
588
594
Mean Square
1,747
,561
F
3,115
Sig.
,005
1,558
,765
2,036
,059
1,279
,357
3,578
,002
Sig. values of all variables except variable DINI2 are below 0,05 at the table. This shows that there is
difference in attitudes of high school groups towards belief value variables. Graduates of Regular High School,
Super High School, High School in English language, Engineering High School are more sensitive than Science
High School graduates as per belief value factor variables. In this case, the hypothesis of “There’s difference in
attitudes of SDU students towards belief value variables as per high school groups.” is accepted.
• High School-Economic Values
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ANOVA
EKONOMK1
EKONOMK2
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Sum of
Squares
2,248
417,333
419,581
1,968
255,379
257,346
df
6
590
596
6
591
597
Mean Square
,375
,707
F
,530
Sig.
,786
,328
,432
,759
,602
Sig. values of all variables are above 0,05. This shows that there is no difference in attitudes of high
school groups towards economic value variables. As a result, the hypothesis of “There’s no difference in
attitudes of SDU students towards economic value variables as per high school groups.” is accepted.
Faculty and Life Values
• Faculty-Ideal Values
ANOVA
SIYASI1
SIYASI2
TEORIK2
SOSYAL2
Between Groups
Sum of
Squares
3,905
df
4
Mean Square
,976
,431
Within Groups
255,728
593
Total
259,632
597
3,782
4
,945
Within Groups
198,497
590
,336
Total
202,279
594
3,871
4
,968
Within Groups
205,435
592
,347
Total
209,307
596
Between Groups
Between Groups
Between Groups
2,229
4
,557
Within Groups
208,379
593
,351
Total
210,609
597
F
2,264
Sig.
,061
2,810
,025
2,789
,026
1,586
,176
Sig. value of two variables is above 0,05 and for two of them it is below 0,05 at the table. When the
analysis checked, no difference is noted in attitudes towards ideal values as per faculty groups. In this case, the
hypothesis of “There’s no difference in attitudes of SDU students towards ideal value variables as per faculty
groups.” is accepted.
• Faculty-Belief Values
ANOVA
DINI1
DINI2
AHLAKI2
492
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Sum of
Squares
2,231
336,348
338,579
7,367
450,383
457,750
5,032
212,790
217,822
df
4
587
591
4
588
592
4
590
594
Mean Square
,558
,573
F
,973
Sig.
,421
1,842
,766
2,405
,049
1,258
,361
3,488
,008
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Sig. value of two variables is below 0,05 and one variable’s value is above 0,05 at the table. This shows
that there is difference predominantly in belief values factors among faculty groups. Students of Engineering
Faculty and Economics and Business Administration Faculty are more sensitive than the students of Technical
Education Faculty and students of Business College are more sensitive than students of Engineering Faculty. In
this case, the hypothesis of “There’s difference in attitudes of SDU students towards belief value variables as per
faculty groups.” is accepted.
• Faculty-Economic Values
ANOVA
EKONOMK1
EKONOMK2
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Sum of
Squares
4,487
415,094
419,581
3,328
254,018
257,346
df
4
592
596
4
593
597
Mean Square
1,122
,701
F
1,600
Sig.
,173
,832
,428
1,942
,102
One variable’s Sig. value is below 0,5 and other is above 0,05 at the table. According to the results of
the analysis, a significant difference is not observed among faculty groups. In this case, the hypothesis of
“There’s no difference in attitudes of SDU students towards economic value variables as per faculty groups.” is
accepted.
Class and Life Values
• Class-Ideal Values
Independent Samples Test
Levene's Test for
Equality of Variances
F
SIYASI1
SIYASI2
TEORIK2
SOSYAL2
Equal variances
assumed
Equal variances
not assumed
Equal variances
assumed
Equal variances
not assumed
Equal variances
assumed
Equal variances
not assumed
Equal variances
assumed
Equal variances
not assumed
1,038
,040
2,746
,481
Sig.
,309
,841
,098
,488
t-test for Equality of Means
t
df
Sig. (2-tailed)
Mean
Difference
Std. Error
Difference
95% Confidence
Interval of the
Difference
Lower
Upper
,659
596
,510
3,557E-02
5,396E-02
-7,04E-02
,1415
,659
593,729
,510
3,557E-02
5,397E-02
-7,04E-02
,1416
-,120
593
,904
-5,751E-03
4,789E-02
-9,98E-02
8,830E-02
-,120
587,208
,904
-5,751E-03
4,789E-02
-9,98E-02
8,831E-02
-,737
595
,462
-3,576E-02
4,853E-02
-,1311
5,955E-02
-,737
591,151
,461
-3,576E-02
4,852E-02
-,1310
5,953E-02
,317
596
,751
1,541E-02
4,861E-02
-8,01E-02
,1109
,317
590,939
,751
1,541E-02
4,863E-02
-8,01E-02
,1109
Attitude difference is not noted between first classes and senior(last) classes for ideal values at the table.
Because all p values are above 0,05 and their group average is so close to each other. This case represents that
class groups do not set forth different attitudes among ideal value variables. As a result, the hypothesis of
“There’s no difference in attitudes of SDU students towards ideal value variables as per class groups.” is
accepted.
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• Class-Belief Values
Independent Samples Test
Levene's Test for
Equality of Variances
F
DINI1
DINI2
AHLAKI2
Equal variances
assumed
Equal variances
not assumed
Equal variances
assumed
Equal variances
not assumed
Equal variances
assumed
Equal variances
not assumed
Sig.
4,766
3,332
1,211
t-test for Equality of Means
t
,029
,068
,272
df
Sig. (2-tailed)
Mean
Difference
Std. Error
Difference
95% Confidence
Interval of the
Difference
Lower
Upper
-1,375
590
,170
-8,549E-02
6,217E-02
-,2076
3,661E-02
-1,377
574,124
,169
-8,549E-02
6,210E-02
-,2075
3,647E-02
-,966
591
,334
-6,980E-02
7,222E-02
-,2116
7,205E-02
-,967
577,980
,334
-6,980E-02
7,217E-02
-,2115
7,194E-02
-,766
593
,444
-3,807E-02
4,967E-02
-,1356
5,948E-02
-,766
592,974
,444
-3,807E-02
4,966E-02
-,1356
5,947E-02
Sig.(2-tailed) values of variables at the table are above 0,05. This represents that there is no attitude
difference among belief value variables as per class groups. As a result, the hypothesis of “There’s no difference
in attitudes of SDU students towards belief value variables as per class groups.” is accepted.
• Class-Economic Values
Independent Samples Test
Levene's Test for
Equality of Variances
F
EKONOMK1
EKONOMK2
Equal variances
assumed
Equal variances
not assumed
Equal variances
assumed
Equal variances
not assumed
,154
11,229
Sig.
,695
,001
t-test for Equality of Means
t
df
Sig. (2-tailed)
Mean
Difference
Std. Error
Difference
95% Confidence
Interval of the
Difference
Lower
Upper
1,795
595
,073
,1230
6,855E-02
-1,16E-02
,2577
1,795
591,740
,073
,1230
6,856E-02
-1,16E-02
,2577
2,609
596
,009
,1394
5,344E-02
3,449E-02
,2444
2,608
583,728
,009
,1394
5,346E-02
3,444E-02
,2444
First variable’s p value is above 0,05, second variable’s p value is below 0,05 at the table. When T
values are checked, first classes are more sensitive to economic values than senior(last) classes. This case shows
that there’s attitude difference towards economic values among class groups. As a result, the hypothesis of
“There’s difference in attitudes of SDU students towards economic value variables as per class groups.” is
accepted.
Place of Birth and Life Values
• Place of Birth-Ideal Values
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ANOVA
SIYASI1
SIYASI2
TEORIK2
SOSYAL2
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Sum of
Squares
2,645
256,784
259,430
1,539
200,572
202,111
4,668
204,078
208,746
2,432
207,991
210,423
df
7
588
595
7
585
592
7
587
594
7
588
595
Mean Square
,378
,437
F
,865
Sig.
,534
,220
,343
,641
,722
,667
,348
1,918
,064
,347
,354
,982
,443
No difference is noted from the table among the students who came from different regions. Reason for
this is, Sig. values of all statements are above 0,05. This represents that despite birth places are different, student
groups do not set forth different attitude among ideal value variables. As a result, the hypothesis of “There’s no
difference in attitudes of SDU students towards ideal value variables as per place of birth groups.” is accepted.
Moreover, the analysis shows that there’s no difference in attitude towards belief and economic values among
place of birth groups.
Place to Live and Life Values
• Place to Live as of now-Ideal Values
ANOVA
SIYASI1
SIYASI2
TEORIK2
SOSYAL2
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Sum of
Squares
12,185
247,143
259,328
4,880
197,147
202,027
3,025
205,960
208,985
9,038
201,292
210,329
df
5
589
594
5
586
591
5
588
593
5
589
594
Mean Square
2,437
,420
F
5,808
Sig.
,000
,976
,336
2,901
,013
,605
,350
1,727
,126
1,808
,342
5,289
,000
Although one variable’s Sig. value is above 0,05, three variables’ value is below 0,05. This case is the
indicator of having difference predominantly in ideal values factors among place groups. Students staying at
dormitories or at parent’s place are more sensitive to ideal values than the ones staying alone. In this case, the
hypothesis of “There’s difference in attitudes of SDU students towards ideal value variables as per place to live
groups.” is accepted.
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• Place to Live as of now-Belief Values
ANOVA
DINI1
DINI2
AHLAKI2
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Sum of
Squares
6,351
331,537
337,888
28,537
426,385
454,922
3,629
213,491
217,120
df
5
583
588
5
584
589
5
586
591
Mean Square
1,270
,569
F
2,234
Sig.
,050
5,707
,730
7,817
,000
,726
,364
1,992
,078
First variable’s Sig. value is 0,05, although second variable’s Sig. value is below 0,05, one of those
variables’ value is above 0,05. This case is the indicator of having difference in belief values factors among
place to live groups. Students staying at dormitories, at parent’s place, with friends and at other places (guest
house, etc.) are observed to be more sensitive than the ones staying alone. In this case, the hypothesis of “There’s
difference in attitudes of SDU students towards belief value variables as per place to live groups.” is accepted.
• Place to Live as of now-Economic Values
ANOVA
EKONOMK1
EKONOMK2
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Sum of
Squares
5,674
412,765
418,439
2,848
253,831
256,679
df
5
588
593
5
589
594
Mean Square
1,135
,702
F
1,617
Sig.
,154
,570
,431
1,322
,253
All variables’ Sig. values are above 0,05. This represents that students within place to live groups do not
set forth different attitudes to economic value variables. As a result, the hypothesis of “There’s no difference in
attitudes of SDU students towards economic value variables as per place to live groups.” is accepted.
Results
Acording to the results of the research, the relation with Life Values and Demographic Factors is as
follows.
• A result with attitude difference is not seen in terms of grouping between life values and gender factor.
Male and female students do not show different attitudes in life value factors like; Ideal, Belief and Economic
Values.
• Where the hypothesis was set as differing in high schools types-engage very important place for education
in the life of students- may have effect in value judgements, the achieved results represent the difference in
grouping. As a result, there is difference in attitudes towards life values among high school groups.
• According to the analysis results about life values could be commented in a different way as per the cases
of faculty groups, it can be said that there is difference in point of view. Results like differing in being educated
in separate faculties have effect on belief values which is a factor of life values.
• According to the test results about different attitudes may occur in life values in terms of being educated in
first grade or senior(last) grade, it can be said that there is difference in point of view. It is observed that there is
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attitude difference only in economic values in terms of differences of classes of the students. Based on this case,
it is observed that first grade students are more sensitive than senior(last) grade students to economic values.
• A result with attitude difference is not seen in terms of grouping between life values and birth place factor.
• According to the hypothesis test results, where the hypothesis was set as, if selected places where the
students are staying cause any differences on their thoughts for life values or not; it is observed that there is
difference in attitudes towards the subject of Ideal and Belief values which have the most highest and second
highest variant value of the students’ life values. With these factors, it is observed that the students, staying at
dormitory or with parents, are more sensitive to ideal values than the ones staying alone. It is observed that the
students, staying at dormitory, with parents, with friends and other places (guest house, etc.) are more sensitive
to the factor of belief values than the ones staying alone. It is observed that the students who are staying alone
are showing dissimilar attitude than other groups in both factors. Circumstances/environment of the place to live
may effect individuals’ point of view to life. As a result, the places where students are living as of now cause
differences in attitudes on life values.
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Dublin Core
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299
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Factors That Affect Life Values “A Research on the Students of Suleyman Demirel University”
Author
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ÇARIKÇI, ilker Hüseyin
ÖZKUL, Ahmet Sait
TAS, Sebahattin
Abstract
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This study aims to determine the life values profiles of the students of Suleyman Demirel University according to demographic variables whether it changes. The theory part of the research about life values is consist of Maslow, Rokeach, Hofstede and Schwartz Value Theories. The domain of the research is 600 students from five different faculties of Suleyman Demirel University. Gungor’s Life Values scale was used for questionnaire of the research. First, the principal component analyses was applied to the scale. As a result, the life values could be collected in three factors. Later, these factors were tested with the demographic factors which were chosen. At the analyses, independent sample t test, One Way Anova and principal component analyses methods were used.
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2009-06
Keywords
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Conference or Workshop Item
PeerReviewed
HB Economic Theory
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https://omeka.ibu.edu.ba/files/original/3e8f7ccdf44dd2b5c313e0107c7e0555.pdf
4bee2d5178fb7affc1f0ead6cc294d78
PDF Text
Text
1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
Favoritism and Nepotism in The Ottoman Empire
Đlker Hüseyin ÇARIKÇI
Assoc. Dr., Süleyman Demirel University, Isparta, Turkey
ihcarikci@iibf.sdu.edu.tr
Ahmet Sait ÖZKUL
asozkul@sdu.edu.tr
Aygen Demir OKSAY
aygen@iibf.sdu.edu.tr
Hasan Hüseyin UZUNBACAK
hhuzunbacak@yahoo.com.tr
Abstract : The professional criteria can be neglected in both the developing countries and the
countries that have intensive traditional ties. One can be recruited or appointed according to
his relations with a politician, the owner or the manager of a business instead of his
qualifications. We come across with this situation, what is called as ‘kin selection’ or
‘nepotism,’ in our society both in the past and today.
In this study, we will try to explain the cognitive frame of favoritism especially nepotism
(relative/kin favoritism) in Ottoman Empire, which has a very important role both in the
world and the Turkish history, and also give some examples to it. Because nepotism is very
important today for taking control of the management process in associations and
corporations as in the past.
The Concept of Nepotism and Favoritism
Favoritism is giving someone preferential treatment. In other words it can be explained as the public
officers defending their relatives when they behave against law. In literature, relative favoritism is called as
‘nepotism,’ friends and acquaintances favoritism is called as ‘cronyism’ and political favoritism is called as
‘patronage’ (Aktan and Çoban, 2008)
The reason of favoritism in public sector is more then money; it is about loyalty and responsibility. It is
possible to use relative ties as an impression tool to affect the public officers instead of something economical
like some goods or money. The essence of this cooperation depends on favoritism. (Yılmaz and Kılavuz, 2002)
Favoritism is a big problem of the bureaucracy. Favoritism, which in bureaucracy can be found in
various forms, first took place in the literature when General Jackson won the presidential elections in 1828. The
‘Protection System he carried out was misused and afterwards the concept favoritism took place in the politics
and management literature.
Yılmaz and Kılavuz (2002) define favoritism as some specific measures like going to the same schools,
being from the same town, supporting the same political party being much more important then the universal
measures that regulates the management practices.
The degeneration in politics provides a basis for degeneration in the society as well. The negativeness
and the corruption in the politics affect the society’s trust on the political system. This in turn reflects as the
corruption in the society, which is most known as favoritism. (Aktan and Çoban, 2008)
The laziness and the blindness of being unable to see the future changes the society’s habits from
producing to consuming. It is really hard to make decisions about future in an environment like this where all the
balances in the economy and politics are destroyed. The distrust that comes along with hopelessness drags the
society to bribery or other illegal ways to become rich. (Özbilen, 2001: 1-2)
The most common types of favoritism are relative favoritism and political favoritism. In the public
institutions ‘relative favoritism’ can be seen in the assignment of the jobs. It shows itself as showing preferential
treatment to someone because of some personal factors such as his town, relatives, friends, etc. other then his
qualifications. People sometimes try to take advantage of being friends or a relative of the public officer and ask
the officer to treat him specially. In these kinds of situations sometimes the public officer depending on his
responsibilities his relations require, treats the citizen in a special way then he does a plain citizen. (Yılmaz and
Kılavuz, 2002: 25)
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The first type of relative favoritism as known as “Nepotism” is “assigning someone to a public position
according to his relative relations instead of the required qualifications.” According to some studies, especially in
less developed countries, the close relative relations still have an important affect in formal organization
structure. The second type is known as “cronyism” which is known as “assigning someone to a public position
according to his relations such as friendship or citizenship.” Some researches say that there is no difference
between nepotism and cronyism. (Yılmaz and Kılavuz, 2002: 25-26)
Another type of favoritism occurs when someone influential uses his force to ask a privileged treatment
from a public officer. In this situation; the officer in case of asking a favor later or just to protect himself from
the possible negative reactions, might does a privileged procedure. (Yılmaz and Kılavuz, 2002)
Nepotism, cronyism and partisanship can be seen in almost all the public offices. The wrong policy
carried out in personnel management decreases the efficiency and also affects the trust to the government
negatively. (Özbilen, 2001: 1-2)
The Formation Of Nepotism
Nepotism is a fact that is seen mostly in countries that have intense traditional ties and relations and
where the market mechanism isn’t developed well as well as in those family businesses in the developed
countries. (Özler, Özler ve Gümüştekin, 2008: 438; Tepav, 2006)
“Kin selection” is a natural instinct in humans and as some scientist say in animals. According to the
biological/ecological approaches nepotism is a rational behavior. These approaches define nepotism as a chosen
behavior. (Özler, Özler ve Gümüştekin, 2008: 438)
The phrase “Friendship lasts a day, kinship lasts every day.” is taken from Kramer’s book ‘L’Historie
Commence a Summer’, summarizes nepotism as the continuance of trust from the human being’s point of view.
(Danışmend, 1979: 27)
Another factor in the forming of nepotism is the structure of family and society. The degree of society’s
being individualist or collectivist also affects nepotism. The appropriate composition of society’s individualism
or collectivism is important for the balance and health of society. In the western societies estrangement is seen
because of excessive individualist structure. On the opposite side the excessive collectivist structure prevent the
forming of non-governmental organizations; while the sharp collectivist structure forms estrangement in the
eastern societies. In this context the spirit of cooperation should be built again in the western societies. On the
other hand in the eastern societies the individualism should be supported so as to turn the firm and close
community into a society. (Bayhan, 2002)
According to Fukuyama traditional family ties form dependant individuals and prevent the development
of the countries. The continuance of only family and complex relative relations prevents economical progress.
The individuals who only trust their family or relatives can’t establish free will relationships. Nepotism is
effective in those societies where the self-interest and solidarity in family comes before the ethical values.
Family, relatives, citizenship, political party, clan, ideology or a religious community play a deterministic role in
social relations. “When loyalty in social structure exceeds economical rationalism; then the cooperation in the
commune will lead to favoritism in simple employment procedures.” (Bayhan, 2002)
The definitions of nepotism in the literature are as follows:
Nepotism is “employing or giving promotion to people according to their relative ties and ignoring
whether they have the required qualifications such as education, skills, ability, etc.” (Özler, Özler and
Gümüştekin, 2008: 438)
Nepotism is derived from a Latin word ‘nepos’ which means a ‘male cousin’ or a ‘grandson’.
(http://en.wikipedia.org/wiki/Nepotism) The negative meaning of the word comes from the Renaissance period
where the Popes assigned their nephews to the highest positions without looking at their qualifications. (Khanri
vd.; 6-7) Thus it can be defined as giving position to nephews or other relatives according to relations other then
capability or suitability. (Khatri vd.; 7)
Another definition of nepotism is using one’s preference in favor of a relative in assignment of
important positions. The applications of nepotism can be seen mostly in less-developed countries where the
traditional ties are more intense. (Özsemerci, 2003: 20, Uluyol, 2004: 63)
Some researches say that in case of nepotism the public officers don’t have a benefit whereas other
researches disagree with this idea. As a result it is obvious that the public officer gains prestige and recognition
as well as monetary benefit from a status he doesn’t deserve. (Tepav,2006)
In the private sector we see the applications of nepotism during the establishment of family businesses.
(Uluyol, 2003: 63) It should be seen something natural to put family members in the important positions; but it
can hurt the company negatively to employ someone without the required qualifications just because they are
family members. Just like Nejat Eczacıbaşı said “It’s a big mistake to hire inadequate talented family members
and give them a managing position just because of their relations.” ( Eczacıbaşı, 1999: 257)
The application of nepotism can be seen in two different ways:
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The ones who gain power give important positions to their friends and acquaintances. The most
known way of nepotism is this. (Fişek; http://webarsiv.hurriyet.com.tr/2000/10/05/246865.asp) In
this kind of application nepotism is done by the one who owns power. The one who has authority
uses this power to gain benefit to his relatives. We can say that in this kind of nepotism the person
deliberatively uses his position badly.
In the other type of application the relatives themselves use the person’s authority, name or power
to gain advantage. (Fişek) We can see this kind of application especially in the government bidding
processes.
Nepotism in History
Favoritism is seen in all periods of history: in Archaic China, India, Greece, the Roman Empire, the
Sumerians, the Middle Ages, Age of Reason and today in most of the world. The Sumerian tablet, found in BC
4000, in Istanbul Archaeological Museum shows how an unsuccessful student became the most successful
student of the class as well as the president of the class. It tells in the tablet how the family invites the teacher to
their house, serve him food and give him presents.
(http://www.tepav.org.tr/tur/admin/dosyabul/upload/yolsuzluk1.pdf)
It is known that 2300 years ago the president of Brahmani counted the 40 ways of corruption and in the
old China the civil servants were paid ‘yang-lien’ in addition to their salary just to prevent bribery.
(http://www.tbmm.gov.tr/komisyon/yolsuzluk_ arastirma/ kaynaklar/Kisim_1.pdf)
Another interesting example of favoritism in history is Platon assigning his sister’s son Speusippos to
the management of the academy after himself in order for him to survive. (Platon; 2005: 13)
When the president of USA J. Garfield gets killed by an unemployed person, the system was questioned
and The Law of Pendleton (1883) which decreased patronage and formed Government Personnel Unit was
accepted. Thus the system changed from captured property to merit and career system. The senator Frank
Murkowski, when chosen as the chief magistrate of Alaska assigned his daughter as the representative of the
state was blamed for nepotism. John F. Kennedy was blamed for nepotism as well when he assigned his brother
Robert Kennedy as his advisor. The second Prime Minister of Malaysia, Tun Abdul Razak, assigned his son
Najib Tun Razak as vice president. The first prime minister of Singapore Lee Kuan Yew assigned his son as
prime minister after himself. (http://en.wikipedia.org/wiki/Nepotism) In 1952 the Truman management was
blamed for Cronyism because of assigning his friends to the public offices. (Khatri vd.;3)
Favoritism and Nepotism in Establishment of The Ottoman Empire
Until the 16th century it is possible to say that favoritism isn’t seen in the Ottoman Empire. The reason
of this was because of the theologists and their advices that were effective in the establishment of the empire as
well as the precautions to prevent the bad going of the empire. During the 16th and 17th centuries when the
favoritism starts, many tractates, which gave advices and warnings towards corruption and moral, such as
tractate of Koçibey was indicted. (Özcan Yeniçeri, www.kibris.com, Erişim: 09.04.2009)
The advices of Şeyh Edebali to Osman Gazi have been the most important principles in the
establishment of the Ottoman Empire. One of these advices was: “The country isn’t an asset that is shared
between the Sultan and his brothers or sons. The country only belongs to the Sultan.” (Topbaş, 1999: 28) When
we take these advices as a whole it isn’t a surprise to not find a sign of favoritism during the establishment of the
empire. Osman Gazi also advices his son Orhan Gazi not to turn aside from honesty and justice. (Topbaş; 1999:
26–29, 34- 35) It is hard to find applications of favoritism in such a system like this.
It can be said that nepotism isn’t seen until the end of the 16th century. But towards the end of 16th
century many resources show that corruption, bribery and nepotism becomes widespread.
Nepotism is a management style just like monarchy or dynasty and it has both its advantages and
disadvantages just like every other system. Every culture has it’s own trends towards nepotism where the
traditions, symbols and rules differ in the application process. Thus there are differences between the Turkish
nepotism, the American nepotism or the Italian nepotism. For example it is possible to come across with two
different ways of becoming the Sultan in the Ottoman Empire. One is a relatively institutionalized method where
the most talented brother becomes the Sultan. This is rather a way that covers both nepotism and competition.
The other way is becoming the Sultan without having the talent or the capacity thanks to the intrigues. (Özler,
Özler, Gümüştekin, 2008:438)
Favoritism And Nepotism During The Decline Period Of The Ottoman Empire
In the book of “The Moral and Mentality World of Economic Disengagement” Ülgener gives place to
couplets showing the portrait of the people in the disengagement period. These couplets show that nepotism is a
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matter of preference and that people should be leery on the cooperation with the foreign and should prefer their
relatives even if they are unqualified. The couplets express that there should be distance with the foreign.
(Ülgener, 1981: 205)
Favoritism is one of the major problems that come across after Kanuni. (Yılmaz ve Kılavuz; 2002: 26)
C.H. Fleischer, in his monography on Mustafa Ali from Gallipoli, tells that the Ottoman intellectuals in the 16th
century have a strong awareness of the law. These people criticize those who are assigned to some duties without
having deserved it and talk about the concept of ‘kanun-i kadim’ which is a law on punishment, management and
finance. Even though it is said that the government system is destroyed before the 16th century, nepotism is
widespread after this century. (Özsemerci: 29- 30) After the 16th century corruption started wide spreading in
every area.
After the 16th century the administrative system as well as the financial system fell down and the
authority got lost in time. The loosing of the authority provides a basis on favoritism and bribery. (Özsemerci;
2003: 27).
“Another factor that supports this development is the financial problems that the public managers go
through at the end of the 16th century. As a result of this the managers fell in trouble of surviving and negative
effects on honesty and prestige occurs.” (Bayar; 1979: 48)
From this point of view one can say that the applications of nepotism start with the government loosing
power on economy and politics. These kinds of applications start even in the education system. The Medresseh
structure starts to drop back after the 16th century and from this date on politics and favoritism starts to interfere
with the education system. Before the 16th century, in order to become a teacher in the Medresseh academical
qualifications were important whereas after the 16th century favoritism became more important. (Sağ; 2003: 17)
Some Examples of Favoritism and Nepotism in The Ottoman Empire
The Ottoman Empire was unable to cope with the applications of favoritism. The cradle of ulema is a
good example of this. The scientists were called ulemas and they were intellectual people who were educated on
both religion and social sciences. But during the decline period of the empire, in case the ulema had a son he
would gain a salary as much as his father (the ulema himself) and he would be called ‘cradle of ulema.’ Thus just
after he is born it is thought that he would be an intellectual person just like his father. Also in the 18th century it
was ordered the non-educated boys of the ulema to grow a beard so as to cover for their illiteracy, which was
made fun of. In the beginnings the salary was cut off when the son didn’t became an intellectual; but later on this
application was discarded. The cradle of the ulema has been the most beautiful example on favoritism in the
Ottoman Empire. (Ortaylı, 2006)
The men who married with the daughters or the sisters of the Sultans were called as bridegroom. The
ones married with the bigger sister of the Sultan was called brother-in-law. When choosing bridegroom, the
status of the person was taken into importance not the age, the degree or the aristocracy. During the
establishment period the gentleman of the Anatolian Seljuks, later on the gentlemen of sanjaks were chosen as
bridegroom. Beginning from the 16th century the bridegroom was chosen from the Ottoman civil servants. The
election would be told to the chosen person and ask him to get ready for the wedding. The bridegroom would
indulge to the princess because of his respect to the dynasty. The bridegrooms who were working in the
provinces would be assigned to Istanbul because the princesses weren’t allowed to get out of Istanbul.
During the 18th century some high degreed public officers imitated the Sultan’s way of living. They
lived in very big residences and hired hundreds of servants. In order to strengthen their power they would hire
young and talented Ottomans. And then make them marry with someone from the family in order to become
relatives with them. This application was similar to making the grand vizier as bridegroom. If a young talented
person succeeds to take attention of a high degreed officer, he will be assigned to important positions. During the
18th century this application was so common that the historians of that period used the term ‘being bridegroom’
as the finding of a protector and climbing up the steps of the Ottoman management. Fall from grace meant to
confiscate the assets of the officer. (Findley, 1996)
One of the examples of favoritism in the Ottoman Empire is Đbrahim Pasha. He has been first assigned
as the grand vizier and then became the bridegroom after marrying with the Sultan’s sister. Uzunçarşılı wrote
about this event in his book called the History of Ottomans and pointed out that by marrying with the Sultan’s
sister Hatice he has raised his prestige. Clever, educated and someone very talented Đbrahim Pasha has been the
object of compliments never seen before in the empire. One of the main reasons of Đbrahim’s promotion is the
closeness to the Sultan Süleyman. (Tezcan; 2004: 12- 14–15)
After the 17th century the occupation of ulema lost its importance and instead of the qualified people the
ones who are patronized and who give a bribe were assigned to this occupation. Below are some examples of
favoritism that occurred after the breakdown. There is emphasis on nepotism in these examples; because the
favoritism in the examples are about the first and second degree relatives.
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Sir Saadettin, who first was the teacher of Murat the 3rd and later on became his son’s teacher became
the Muslim judge of Mekka when his older son was 3 years old only. Immediately he was assigned as the
Muslim judge of Istanbul which caused a rumor. A poet even wrote a poem about this corruption.
This child became a military judge after two months when he was only 29 years old. The other son of
the teacher, named Esad suddenly became a Muslim judge of Edirne and after that at about 25 years old he
became the Muslim judge of Istanbul. These promotions closed the doors to the real scholars and the positions of
judges were opened to the sons of the Sultan’s teachers, Military judges and the chief religious officials.
(Uzunçarşılı, 1995: 123)
Sultan Mehmet the 3rd once complained about not having found an equitable and trustable man. When
they asked him the reason he would tell them that he had complimented the chief religious official Sir
Bostanzade and he had immediately assigned his ignorant brother as a military judge and also assigned another
ignorant young as a Muslim judge to Salonika. He also told that his father’s teacher Saadeddin by assigning one
of his young sons to the military judge of Anatolia and the other to the Muslim Judge of Edirne, made him gain a
bad reputation and himself shameful. (Uzunçarşılı, 1995: 123-124)
A study oriented to the working women in the Ottoman Bank has interesting results. According to the
results most of the women working in the bank during 1911-1939 are the daughters of the privileged people.
“Behiye the daughter of the Commander of the Bosphorus Asaf Pahsa; Zaruhi Acemiyan the daughter
of Sir Dikran, the eye doctor; Halab diplomat Michel Yakimansky's daughter Irène Yakimansky; Adèle Huri the
daughter of a cotton Merchant Joseph Huri; Bedriye the daughter of a sergeant; lawyer Hasan Tahsin’s
daughter Meryem Muazzez [Berkand]; the daughter named Pierrette Alyanaki of a hat seller named Antoine;
Alba Pech daughter of one of the old worker’s of the bank; a commissioner’s daughter Elsa Filozof; the gardner
Alexandre’s daughter Athanassia Fasulakis; the granddaughter of Cemile Sultan Mevhibe Cellaleddin,
etc…They all worked in the Otoman Bank in one part of their lives.” (Ammour and Baruh; 1999)
The Preacautions Taken in The Ottoman Empire to Prevent Favoritism and Nepotism
One of the main problems that bother the Ottoman Empire was favoritism. Lots of effort was made in
order to prevent favoritism in the government businesses. The most significant example to these efforts was
recruiting boys for the Janissary corps. This system can be explained as taking the non-muslim children to the
palace and educating them for to give duties on different stages of the government. One of the reasons why this
system was formed was to prevent favoritism. The children who were raised with this system couldn’t do any
favoritism since they didn’t have any relatives. We can say that many great people such as Sokullu Mehmet
Pasha, Mimar Sinan, etc. have been raised with this system. (Ortaylı, 2006)
Especially the researches who have claimed that the breakdown started in the 16th century, have stated
that favoritism in education, military and Muslim judgement have begun. The government which affected
negatively from this favoritism made some reforms.
The breakdown that started in the second half of the 16th century affected the judgment system as well.
Especially the breakdown in the education system made the students graduate without having enough knowledge
and skill; thus the negativeness that occurred because of the Muslim judges increased. The precautions that were
taken weren’t enough. No positive results were gained from the orders that have been declared during the 17th
century. Especially with the precautions taken in 1838 the judgment institutions have been set in order and the
assignments, the promotions and the dismissals have been tied to legal rules; trying to prevent favoritism.
(Fevzioğlu and Kılıç, 2008)
Immediately after the innovations done in civil, fiscal and other areas; beginning from 1844
arrangement in military was done while trying to get volunteer support from the citizens. Especially precautions
that will get support and contribution from the Muslim citizens were taken. The concepts of religion, government
and homeland were used in order to make some propaganda. Along with this it was emphasized that the laws
would treat everyone equally, that no one will be looked out and transparency will be the principle in hiring
military personnel. (Tunalı, 2008)
A solution such as lottery was found for the military where favoritism was extremely common. The
lottery being picked in front of the eyes of the participants ended the injustice in hiring military personnel and
the applications of favoritism which were reminders of the old period.
Along with these general reforms some Sultans gave importance to individual reforms as well. Selim
the 3rd, apart from the Sultans before him tried to widespread the reforms through the society. Before having
formed the reform project he asked opinions of the notables and also opened a way to participation.
Understanding truly the breakdown in social, political, economical and legal areas of the Ottoman Empire, Selim
the 3rd tried to attract attention to prevention of favoritism and bribery, delegation of the government to the
qualified people and sharing of the responsibilities of the management. But the idea and the importance of
socializing wasn’t understood by his politicians thus his attempts were unsuccessful. (Akça ve Hülür, 2008: 239)
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Tepav, Bir Olgu Olarak Yolsuzluk, Nedenler, Etkiler Çözüm Önerileri, TBMM Yayınları, 2.Baskı, Ankara, 2006.
Tezcan, E., “Pargalı Đbrahim Paşa Çevresindeki Edebi Yaşam”, Yayımlanmamış Yüksek Lisans Tezi; Bilkent Üniversitesi
Ekonomi ve Sosyal Bilimler Enstitüsü, June 2004.
Topbaş, O.N., Abide Şahsiyetleri ve Müessesleriyle Osmanlı, Erkam Yayınları, Đstanbul 1999
Tortop, N., Personel Yönetimi, Yargı Yayınları, Ankara, 1994.
Tunali, A.C., “Tanzimat Döneminde Ordu-Halk Đlişkilerine Dair Bazı Gözlemler”, 2008.
Uluyol, O., Aile Şirketleri, Medipres, Malatya, 2004.
Uzunçarşili, Đ.H., Osmanlı Tarihi, Türk Tarih Kurumu Basımevi, Beşinci Baskı, Cilt 3, Bölüm 1, Ankara, 1995
Ülgener, S., Đktisadi Bozulmanın Ahlak ve Zihniyet Dünyası, Đstanbul, 1984
Yeniçeri, Ö., “Türk'ü Devlet Yapan Adam: ATATÜRK”, http://www.kibris.com , Date: 09-04-2009
Yilmaz, A. and Kilavuz, R., “Türk Kamu Bürokrasisinin Đşlemsel Sorunları Üzerine Notlar”, C. Ü. Đktisadi Ve Đdari Bilimler
Dergisi, Cilt 3, Sayı 2, 2002.
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504
�1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
ABSTRACTS
505
�1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
506
�
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300
Title
A name given to the resource
Favoritism and Nepotism in The Ottoman Empire
Author
Author
ÇARIKÇI, ilker Hüseyin
ÖZKUL, Ahmet Sait
OKSAY, Aygen Demir
UZUNBACAK, Hasan Hüseyin
Abstract
A summary of the resource.
The professional criteria can be neglected in both the developing countries and the countries that have intensive traditional ties. One can be recruited or appointed according to his relations with a politician, the owner or the manager of a business instead of his qualifications. We come across with this situation, what is called as ‘kin selection’ or ‘nepotism,’ in our society both in the past and today. In this study, we will try to explain the cognitive frame of favoritism especially nepotism (relative/kin favoritism) in Ottoman Empire, which has a very important role both in the world and the Turkish history, and also give some examples to it. Because nepotism is very important today for taking control of the management process in associations and corporations as in the past.
Date
A point or period of time associated with an event in the lifecycle of the resource
2009-06
Keywords
Keywords.
Conference or Workshop Item
PeerReviewed
HB Economic Theory
-
https://omeka.ibu.edu.ba/files/original/1623a69b95ca04ef9f17f7dd8b2deb70.pdf
e24e0bdad8a3ef387827fbd6d5245501
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1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
Global Financial Crisis and Its Impact on Balkans
Ergin ĐSMAĐL
President of COFER, Macedonia
e.ismail@coferweb.org
Semi ŞAHĐN
Finance Director of COFER, Macedonia
s.sahin@coferweb.org
Abstract: The aim of writing this paper is to reveal that the implication of the crisis to the
western Balkans has been not of a sort of financial crisis, but an economic turbulence which
has occurred as a result of lack of demand in the world markets to the western Balkan
products and falling sources of finance. Expansionary fiscal policies on top of external trade
deficits growing at record levels, calls into question the ability of the western Balkan
economies to finance the needs, that in turn increases their vulnerability and that may lead to a
possible financial crisis in future if the global financial crisis continues to sustain until 2010.
What is expected to ease the conditions is the seasonally strong increase in construction, food
exports and private transfers during the spring and summer seasons, expected to close the
gaps that are being established through growing external trade deficits. Increase in
construction business, growing food exports and raising remittances may offset vulnerabilities
of the economies and may limit further economic and financial crisis in the region.
Keywords: global financial crisis; Balkans; growth; unemployment; remittances
Financial Crisis in the World, Economic Crisis in the Balkans
What started as a global financial crisis has become an economic crisis. The world financial crisis
emerged from a property bubble and a credit boom. Bad debts soared and banking sector in the developed
economies became insolvent. The implication of the crisis to the western Balkans has been not of a sort of
financial crisis, but an economic turbulence which has occurred as a result of lack of demand in the world
markets to the western Balkan products and falling sources of finance. Investments, remittances, industrial
production, foreign exchange reserves and employment rates have fallen. As a result, growth has slowed down.
Expansionary fiscal policies on top of external trade deficits growing at record levels, calls into question the
ability of the western Balkan economies to finance the needs, that in turn increases their vulnerability and that
may lead to a possible financial crisis in future if the global financial crisis continues to sustain until 2010.
The governments of the region of the western Balkans, when the crisis hit in September 2008, argued
that they were immune to the crisis. However, as their export-oriented economies began to slump in the autumn
of 2008 due to the slid in the world commodity prices, which resulted in tens of thousands of citizens of western
Balkan countries loosing their jobs, the governments of the region became more open about the difficulties of
their economic situation, although continuing to argue that the effects of the financial crisis are least to be felt in
western Balkans in comparison with other regional economies of Europe such as that felt in Iceland, Baltic states
or Ukraine. The culprit many of the governments have now settled on is the world out of Balkans. Even wider
publics took comfort of this argument due to relatively low exposure of the local economies to the world
financial markets.
Although the governments continue to predict that the economies would show growth and small
contraction in 2009, the economic indicators show that the economies are in some degree of trouble at the
moment with industrial output, foreign investment and remittances falling and unemployment rising.1 Growth
forecasts are down across the region from 5 to 3%, investors are slowing projects and governments are drawing
up rescue plans.2 Independent economists think that 3% growth of GDP for 2009 is wildly optimistic. Depending
on the world manufacturing and commodity prices, they could show growth by 2 or even 1% of GDP.
For the small economies of a scale of western Balkans that have boomed for the past seven-eight years,
following the end of conflicts in the region in 2001 - that last one being the conflict of Macedonia in 2001 - with
1
2
The Economist, "The Balkans: A year in the life of Kosovo", 14 February 2009, p. 14.
The Economist, "The western Balkans: A stuck region", 14 February 2009, p. 36.
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�1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
annual average GDP growth reaching 5%, economic slowdown and contraction in GDP that has started to be
seen starting from the autumn of 2008 is a particularly harsh blow to western Balkans. The whole region, except
Serbia and Croatia, has escaped the global financial crisis however it has run into economic crisis due to the
recession in its export markets, including EU. As small open economies the western Balkan countries are
uncomfortably exposed to the world crisis and particularly to EU as their trade with the EU member states
comprises their largest trade volume. Since the global financial crisis hit in September 2008 growth has turned to
contraction and unemployment is mounting in the region. Also, any lingering hopes that the western Balkans
might escape relatively unscathed from the global financial storms were dashed when managers of the foreign
banks in the region, mainly those of Austria and Greece, sought support from the international finance
institutions. This shows that, although the economies are small and relatively well protected, they are exposed to
the global financial crisis that has been replicated in the region in the form of economic crisis.
The falling manufacturing and commodity prices in the world markets are causing problems. Depended
on steel and metal exports, the region has been hit hard by the global slump in commodity prices and by the
expensive imported electricity, sending metal prices into a tailspin. The price of the metals has fallen by almost
two-thirds since mid-2008 leading to slowdown in the region's economies. More than a fifth of economic output
and employment are based on exports, making them particularly vulnerable to a fall in global growth and trade.
Manufacturing and exporting economies are grinding to a halt, as demand across the world melts away. The
western Balkan economies contracted further in last quarter of 2008, as a dispute between Russia and Ukraine
over gas prices reduced energy supply to the region and forced the countries' heavy industries to go slow, cutting
production or even halting assembly lines. For example, Silmak, a significant producer of ferro-nickel in
Jegunovce, in the western part of Macedonia, has cut production and has laid 700 workers due to the drastic fall
of the ferro-nickel's price in the world markets.1 The nearby brick factory Kiro Kucuk in Veles, in the central
part of Macedonia, also exemplifies the gravity of the setback. On 1 March 2009 the employees turned up for
their final day's work. The factory will not reopen until the economy recovers.2 A similar story could be told in
many countries of the region. Macedonia is not alone depended on exporting metallurgical industries. Serbia has
suffered far more as global demand for the goods in which its industry specialises has evaporated. For example,
US Steel, one of Serbia's leading exporters, closed one plant.3 These examples are reflection of the data released
for January 2009 that industrial production, which accounts for a fifth of total value added in Macedonia4 and
Serbia has plummeted by 17%, its steepest fall in years.5 The Macedonian State Statistics Office reported that the
local companies have been operating by using 50% of their capacities in the course of January 2009 and their
situation has deteriorated on a monthly basis, which has led to a drop in employment rate as well as a large fall in
production due to the reduced foreign demand for Macedonian products, insufficient domestic demand, uncertain
economic situation and the financial problems. These are hotbeds that might be transferred to other economic
sectors, such as the textile and leather industry and to the construction sector, which comprise large share in the
country's GDP.
The gloom reflects growing worries about underlying weaknesses that make the countries especially
vulnerable to recession happening in the EU and other economies to which Balkan economies are depended.
So companies have announced big lay-offs as demand has fallen and factories have closed.6 The official
unemployment figure of Macedonia already stands at 33% (unofficially it is probably 35% or more) and is set to
rise as the new basic salary estimates will only count employed those who pay social security benefits.
Unemployment rate in Bosnia and Herzegovina and in Kosovo are more than 40%. The unofficial
unemployment rate is, however, much higher and many who say that they have jobs are in fact on indefinite
unpaid leave. The economists forecast that unemployment region-wide will rise. Most of that rise will be the
result of fall in trade (many exporting companies have laid off workers), and due to declining investments.
Coffee streets from Knjez Mihajlova in Belgrade to Kej Vardar in Skopje to Bash Charshija in Sarajevo
are busy during sunlight as young people, forming more than 50% of the unemployed force in the region, sip
their coffees. Unemployment rates are soaring and offices of the Employment Agencies in whole region are full
with people looking for work.
The stock markets have plunged as well. The Zagreb stock exchange index lost 42% during the last
quarter of 2008 and others such as Sarajevo Stock Exchange, dropped by 19% during the same quarter, leading
1
Dnevnik, "Silmak prekina so rabota", 2 Mart 2009, p. 7.
Utrinski, "Rabotnicite od Kucuk izvisija", 3 Mart 2009.
3
European Commission, DG ECFIN, EU Candidate and Pre-Accession Countries Economic Quarterly, 9 January 2009, p.
30.
4
Ibid, p. 10.
5
Utrinski, "Pad na proizvodstvoto za 16.7%", 27 February 2009.
6
International Monetary Fund, "Former Yugoslav Republic of Macedonia: Staff Report for the 2008 Article IV
Consultation", Prepared by Staff Representatives for the 2008 Consultation with Former Yugoslav Republic of Macedonia,
11 November 2008, p. 11.
2
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�1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
to an annual decrease of 67% in 2008.1 The Belgrade Stock Exchange tumbled and its index lost 75% during
2008.2
An important sector that waits to be affected is the real estate market as the credits have gone down and
the borrowers are unable to pay back their monthly loans. The scale of the bubble in the region is as big as in
troubling EU cities. House prices rose further in Belgrade than they did in Tirana. So did commercial-property
prices. As a result, demand for new homes has dried up although prices have remained stable and over inflated,
with Belgrade topping the prices where average residential square meter is sold at 2000 euros. The housing
boom in the region is among the extreme, measured by real price increases and resulting overvaluations. This is
a bubble which is waiting to burst. Another bubble which is waiting to burst is commercial property where office
blocks and shops are overvalued. Both these booms have been fuelled by debt, another reason why the region
looks particularly vulnerable now.
There is much to suggest that the pain is felt most by small enterprises, labelled as small and medium
sized enterprises (SMEs) that are the backbone of the western Balkan economies. SMEs seem especially
vulnerable to the downturn. Many specialise in textile and these are also the products whose orders are the first
to be cancelled when economies slow and companies trim investment. These firms are finding themselves
chronically short of orders and capital.
The governments in the region have launched actions to stimulate their economies. Montenegrin
government launched a plan with significant capital expenditures and other stimulus to businesses at some 10%
of the projected GDP for 2009.3 In November 2008, the Macedonian government unveiled measures worth 5-6%
of GDP.4 Other governments as well have unveiled packages that include extra billions to finance investment,
infrastructure projects, extra benefits for poorer and tax cuts. The central banks as well have joined in tightening
monetary policies and increasing controls of the credit markets. These measures mean the economy may suffer
only a mild downturn. Tightening of control by the central banks has encouraged banks to drastically decrease
the amount of lending. When there are no loans for companies and consumers, the consumption of domestic and
foreign products decreases, leading towards economic stagnation. So officials are also trying to inject cash and
confidence into the banking system, avoiding confidence crisis that in October 2008 hit Albania, Bosnia and
Herzegovina, Montenegro and Serbia where the lack of confidence led to a withdrawal of deposits by
population.5 They have done this in various ways. Croatian central bank has abolished reserve requirements. The
Bank of Albania has limited Banks' exposure towards their foreign parent companies.6 The National Bank of
Serbia has eliminated the tax on savings income to help boost foreign exchange liquidity.7 The Bosnian central
bank has increased the level of guaranteed savings deposits from 3500 to 10.000 euros and the Montenegrin
government has given full guarantee to deposits. The Montenegrin government has also given capital boost to
ailing Prva Banka to allow it to expand landing, especially for small businesses.8
The global crisis has slowed down western Balkans' credit-fuelled boom. Estimates of output have
slumped and currencies have dropped as capital inflows have dried up. The bad debts have raised as local
customers default particularly those that have borrowed in foreign currencies that have since risen relative to
their own. One of the dirty habits from the boom is that as local loan growth outpaced deposit growth.9 There is
likelihood that one or more of the ex-communist Balkan countries will default on its debt. The biggest weakness
lies in a financial system that has combined badly run local banks with loosely overseen subsidiaries of western
ones. Some local banks now depend on their parents' willingness to keep financing them – and those parents
have plenty of problems at home. The Greek government has told its banks to draw back from their lending in
the Balkans. Debt burdens are high today because so much was borrowed in the recent past. This began as a
logical response to declining interest rates, low inflation, rising asset prices and less frequent recessions. Some
countries have an extra problem of big external government debts (in Croatia's case, the gross figure is near 85%
of GDP). For other countries, the strong Euro is a problem; they have pegged their currencies to it.10
Tumbling exchange rates raised the real burden of foreign-currency loans, forced policymakers to keep
interest rates high. However, by boosting exports, a weaker currency can offer a route to recovery. In
Macedonia, by contrast, denar stays strong as the economy slumps, deflation setting in which will lead debts to
grow and possibly banking problems to grow. Possible threat of financial crisis has led the Euro to be seen as a
shelter for western Balkan economies from the storms. The local currencies dinar of Serbia, kuna of Croatia, lek
1
European Commission, DG ECFIN, p. 23.
Ibid, p. 31.
3
Ibid, p. 26.
4
Ibid, p. 10.
5
Ibid, p. 3.
6
Ibid, p. 18.
7
Ibid, p. 31.
8
Ibid, p. 27.
9
The Economist, "Eastern European banks: The ties that band", 21 February 2009, p. 73.
10
The Economist, "Eastern Europe: Argentina on the Danube?", 21 February 2009, p. 14.
2
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�1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
of Albania have lost their value against the Euro. Kuna depreciated by 2.9% and lek 1% vis-à-vis the euro in the
last quarter of 2008,1 where as the Serbia's dinar has lost close to 17% of its value against the Euro in the same
period. The central bank of Macedonia has spent over 50 million euros of its reserves in January 2009 alone,
largest since the introduction of denar in early 1990s, to cushion the devaluation of its currency and avoid public
panic.2 Macedonia will suffer damages if the Euro loses its value in relation to the dollar as it would affect the
Macedonian export to EU markets. The increase of the dollar value will also have negative implications for
Macedonia as the country uses this foreign currency to purchase twice as much as it sells. The value of the Euro
in comparison to the dollar has been declining since autumn 2008. The drop of the value of the Euro with this
fixed course of the denar in relation to the Euro currency will damage the Macedonian economy and de-motivate
exporters primarily exporting to EU states.3 The government in Macedonia also has shredded investor
confidence by calling for decreasing the amounts given to private pension funds.
Recovery is possible only through strong demand in the rest of the world (which is to lack for some
time), that would lead exports to soar, allowing quick recovery. However, today demand is falling rapidly across
the globe and most big developed economies buying Balkans products face simultaneous banking crises. With
demand weak everywhere, the familiar route to recovery is blocked.4 For the largest trading partners of western
Balkan economies, the EU countries, figures that came out in February 2009, showed that Euro-area GDP shrank
at an annualised rate of around 5% in the fourth quarter of 2008. The IMF has forecasted that Euro-area GDP
will decline by 2% in 2009 and barely recover in 2010. Countries with huge current-account deficits are most
exposed in a credit drought. So the hope had been that weaker economies of Balkans would be offset by faster
economic recovery in EU economies and support by the local banks mother banks' in EU. Unfortunately, the EU
economies are facing recession and mother banks and mother countries have asked them to lend first to domestic
businesses and households and not to transfer money to their subsidiaries in Balkans. The Greeks publicly
advised banks to be more prudent about transferring bail-out funds to Balkan subsidiaries.5
The western Balkan countries face a current account deficit this year in average of around 14%.
Nevertheless, the crisis for example has not stopped the Macedonian and Kosovar governments from doling out
billions of euros' worth of cultural projects.
Financial crisis is also having effect on remittances, a large share in GDP of the economies of Balkans.
Foreign workers have been first to be laid off in the western economies. Remittances make up more than a tenth
of the GDP of Balkan economies. Although they are likely to fall as a result of the slumping world economy, as
it has been the case with Albania, where remittances' inflows have declined from 13% of GDP in 2007 to 11% of
GDP in the last quarter of 2008,6 they may be less affected by the world economy.7 It is expected that people
keep the cross border payments going even when their incomes fall. Migration from western Balkans to EU
countries is expected to rise as the borders are getting opened through visa facilitation and liberalisation
programmes. However, this rise will be balanced with the recession in the EU economies where it means fewer
jobs for migrants.
In surveys, the economy has leapt to the top of voters' concerns. Overall the public is scared and
uncertain. So far, the Balkans has escaped the civic unrest seen in the Baltic States, Iceland, or elsewhere.8 There
are not yet signs of discontent, except concerns expressed by politicians and economists. Thousands taking to the
streets to protest against crises in Baltic States and Ukraine have not resembled in Balkans. However, pundits
predict unrest in towns that rely entirely on one ailing factory or industry. But so far the signs are limited.
The middle class in the whole region is under a great threat. The middle class flourished during
communist times. As economy goes into reverse they may well be hit harder than the rich or poor. They work in
export industries so their jobs are unsafe. The other part of the middle class, who are employed in the state
administration, and whose jobs are relatively safe, they have started to borrow, so are hurt by the credit crunch.
To End with a Negative and a Positive Note
The economies of the Balkan region, except those of Serbia and Croatia, have escaped the financial
crisis. However they are facing the biggest economic crisis since 1991, when they left the communism regime.
Corporate profits have collapsed. Big manufacturers' output is down. Metal producers have halved or halted their
1
European Commission, DG ECFIN, p. 7.
Biljana Krstevska, "Stopeni uste 53 milioni evra", Dnevnik, 27 February 2009; Utrinski, "Samo so dobra plata do kredit",
27 February 2009.
3
Abdulmenaf Bexheti, "Experts on Fixed Course of Denar", Skopjediem, 25 February 2009.
4
The Economist, "America's banking crisis: Worse than Japan?", 14 February 2009, p. 76.
5
The Economist, "Charlemagne: Single-market blues", 7 February 2009, p. 30.
6
European Commission, DG ECFIN, p. 19.
7
The Economist, "Remittances: Trickle-down economics", 21 February 2009, p. 74.
8
The Economist, "The western Balkans: A stuck region", 14 February 2009, p. 36.
2
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�1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
production. Companies have slashed jobs and investment. Industrial output and employment have fallen at
record levels not seen since 1991.
What is expected to ease the conditions is the seasonally strong increase in construction, food exports
and private transfers (workers remittances) during the spring and summer seasons. These seasonal effects are
expected to close the gaps that are being established through growing external trade deficits. Increase in
construction business, growing food exports and raising remittances may offset vulnerabilities of the economies
and may limit further economic and financial crisis in the region.
385
�
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278
Title
A name given to the resource
Global Financial Crisis and Its Impact on Balkans
Author
Author
iSMAiL, Ergin
SAHiN, Semi
Abstract
A summary of the resource.
The aim of writing this paper is to reveal that the implication of the crisis to the western Balkans has been not of a sort of financial crisis, but an economic turbulence which has occurred as a result of lack of demand in the world markets to the western Balkan products and falling sources of finance. Expansionary fiscal policies on top of external trade deficits growing at record levels, calls into question the ability of the western Balkan economies to finance the needs, that in turn increases their vulnerability and that may lead to a possible financial crisis in future if the global financial crisis continues to sustain until 2010. What is expected to ease the conditions is the seasonally strong increase in construction, food exports and private transfers during the spring and summer seasons, expected to close the gaps that are being established through growing external trade deficits. Increase in construction business, growing food exports and raising remittances may offset vulnerabilities of the economies and may limit further economic and financial crisis in the region.
Date
A point or period of time associated with an event in the lifecycle of the resource
2009-06
Keywords
Keywords.
Conference or Workshop Item
PeerReviewed
HB Economic Theory
-
https://omeka.ibu.edu.ba/files/original/a412783246362cec70a8c4a7b68b550c.pdf
04eb0c19972f269c8fdfb9f0bf4d4ee8
PDF Text
Text
1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
Individual and Organizational Fit: It’s Impact on Turkish Academic Staff
Fatma Nur ĐPLĐK
Cukurova University
Karatas School of Tourism and Hotel Management
Department of Hotel Management, Turkey
nuriplik@cu.edu.tr
Azmi YALÇIN
Cukurova University
Faculty of Economics and Administrative Sciences
Department of Business Administration, Turkey
azmiyalcin@cu.edu.tr
Kemal Can KILIÇ
Cukurova University
Faculty of Economics and Administrative Sciences
Department of Business Administration, Turkey
kcan@cu.edu.tr
Abstract: Achieving congruence between the values of the employee and the organization
which often is called person-organization (P-O) fit that has gaining a growing interest in the
organizational behavior field in recent years is the main theme of this article. Researches about
P-O fit (O’Reilly & Chatman 1986; Lauver & Kristof-Brown 2001; Cable & DeRue 2002;
Sekiguchi 2004; Hoffman & Woehr 2006; Nelson & Billsberry 2007) revealed that a high level
of congruence has a positive impact on job attitudes of individuals and creates a number of
positive outcomes for organizations.
P-O fit that affects the degree to which an individual is liked by co-workers, supervisors, and
subordinates (Judge & Ferris 1992) improves individual and organizational effectiveness.
Because P-O fit has been positively related to job attitudes (organizational commitment,
motivation, job satisfaction, organizational citizenship behaviors) and negatively related to
turnover intentions of employees, the congruence between individual and organizational values
could be critical for the organizations. In this context, this study attempts to explore the
relationships between the P-O fit and job satisfaction, work alienation and individual
performance level of academicians. In order to test hypothesis empirically; data was collected
from academicians of a State University that is being in the list of Top 500 World Universities
located in Turkey. After the reliability, correlation and regression analyses, we conclude by
discussing implications, limitations, and future researches concerning the P–O fit.
Keywords: Person-Organization Fit, Job Satisfaction, Work Alienation, Individual
Performance, Academic Staff, Turkey.
The Concept of Person-Organization (P-O) Fit
The fit between a person and the work environment received attention from both scholars and
practitioners in recent years (Schneider 2001; Ballout 2007; Kristof 1996; Chatman 1989; O’Reilly & Chatman
1986). Practitioners who study in organizational psychology field initially focused on person and environment
(P-E) subject to explain the relationship between person and organization. P-E is defined as the compatibility
that occurs when personal and situational characteristics of employees are well-suited (Schneider 2001). P-E fit
studies have discerned between person-job fit, person-team fit and person-organization fit (Kristof-Brown et al.
2005; Vianen Van et al. 2007). The majority of P-E fit papers have evaluated individual features “needs and
values” and situational/organizational characteristics “job demands and occupational type” for forecasting and
clearing up the valuable results related with increased fit (Ballout 2007).
The most investigated subject within P-E fit is P-O fit (Kristof 1996) that is one of the most popular
areas of research in the general management and organizational behavior fields. This domain of research
captures the congruence between the characteristics of individuals (i.e., goals, skills, and values) and the
characteristics of organizations (i.e., goals, values, resources, and culture) (Bright 2007). P-O fit relates a
person’s personality, goals and values with those of the organization (Kristof-Brown et al. 2005). Thus many PO fit studies (Edwards 1996; Kristof 1996; Chatman 1989; O’Reilly & Chatman 1986) have examined the match
between people’s values and those of the organization, because values that are conceived of as fundamental and
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�1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo
relatively enduring represent conscious desires held by the person and encompass preferences, interests, motives
and goals (Vianen Van et al. 2007).
P–O fit is defined as “the compatibility between people and organizations that occurs when at least one
entity provides what the other needs or they share similar fundamental characteristics or both” (Kristof 1996). In
other words, P-O fit is the "congruency between patterns of organizational values and patterns of individual
values" (Chatman 1989) emphasizing the extent to which a person and the organization share similar
characteristics and meet each other’s needs (Sekiguchi 2004). There are certain values that the individual carries
over into his or her role, certain values that the organization imposes, and certain values that the two share. The
extent to which the role-related values of the organization and those of the individual are shared indicates the
degree of the individual's "fit" with the organization (Lopez 1999).
P-O fit emphasizes the importance of fit between employees and work processes and the importance of
creating an organizational identity through the institutionalization of consistent values that permeate an
organization’s culture (Morley 2007). Thus researchers and practitioners contend that P-O fit is the key to
maintaining the flexible and committed workforce that is necessary in a competitive business environment and a
tight labor market (Sekiguchi 2004). In other words, P-O fit is a positive attribute that is to be promoted (Nelson
& Billsberry 2007). Some scholars (e.g. Kristof, Chapman etc.) categorized P-O fit according to their empirical
studies. Kristof (1996) identified four different operationalizations of P-O fit:
• The first one is the congruence between individual and organizational values.
• The second one is goal congruence with organizational leaders.
• The third one is the match between individual preferences or needs and organizational systems and
structures.
• The fourth one is the match between the characteristics of individual personality and organizational
climate.
As well to labeling demand-abilities and needs-supplies fit within P-O fit construct, P-O fit also
includes supplementary fit and complementary fit, both of which are important in P-O fit studies (Morley 2007;
Piasentin & Chapman 2006; Nikolaou 2003). Piasentin & Chapman (2006) identify four common definitions of
P-O fit, namely:
Supplementary fit where an individual possesses characteristics that are similar to existing organizational
characteristics.
Complementary fit where an individual fills a void or adds something that is missing in the organization.
Needs-supplies fit where an individual’s needs are fulfilled by the organization.
Demand-abilities fit where an individual’s abilities meet the demands of the organization.
Supplementary fit has to do with matching similar levels of characteristics between employees and
organizations, whereas complementary fit is concerned with bridging the gap between the patterns of these
assessed characteristics, however, needs-supplies and abilities-demands fit have attracted more P-O fit
researchers as they apply to congruence and vocational choice theories (Piasentin & Chapman 2006; Morley
2007; Nikolaou 2003; Ballout 2007).
Most P-O fit studies have used needs and values as attributes of comparison between persons and
organizations (Kristof-Brown et al. 2005). Because organizational needs and individual needs are important
factors in P-O fit investigations, a sample list of organizational and individual needs for each organization
included in Table 1. The degree of similarity between these lists is an indicator of the degree of the P-O fit
(Silverthorne 2004).
Table 1: Sample Organizational and Individual Needs List
Organizational Needs
Individual Needs
Loyalty to the organization
Good salary
Hard work
Job security
Employee cooperation
Being with other people
Creativity
Good supervision
Following directions
Opportunity for promotion
Good quality of work outcomes
Challenging work
Commitment to the organization’s objectives
Feeling of achievement
Comradeship with colleagues
Good working conditions
Respect for authority
Being involved in the organizational climate
Employee satisfaction
Ability to take responsibility
Source: Silverthorne, C. (2004). The impact of organizational culture and person-organization fit on organizational
commitment and job satisfaction in Taiwan. The Leadership & Organization Development Journal, 25 (7), 592–599.
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The Relationships between P-O Fit and Job Attitudes
P-O fit is a key factor with great influence on employee outcomes. Thus it is assumed that both
individuals and organizations will be more effective when the values of the person and organization are
congruent (Shin & Holland 2004). In the aggregate, empirical studies provide convincing evidence that P-O
values fit is an important determinant of long-term consequences for employees (e.g. work attitude, intention to
quit and turnover, prosocial behavior, self-reported teamwork, contextual performance and self-report work
performance), organizational entry (e.g. individual job search), and socialization (Huang 2005; O’Reilly &
Chatman 1986; Sekiguchi 2004). A high level of P-O fit is likely to increase commitment and motivation of
employees toward task performance and their engagement in good and lasting relationships (mentoring
relationships, organizational citizenship behaviors) with their employers, which in turn will result in positive
organizational outcomes (Ballout 2007). P-O fit has influence on many job attitudes of employees, but in this
study specifically we focus on the influence of P-O fit on job satisfaction, work alienation and individual
performance.
P-O fit has been studied as a potential inductor of job choice decisions and job attitudes (e.g. trust,
commitment and satisfaction) (Cable & Judge 1996; Zoghbi & Manrique De 2008). In this context, P-O fit has
been shown to play a significant role in how job applicants choose organizations (Saks & Ashforth 1997) and
how recruiters select applicants (Kristof-Brown 2000). In addition to this, interactionist research suggests that an
employee's job attitudes such as satisfaction and organizational commitment result from the relationship between
the attributes of the job and the values required in that situation. In other words, jobs that the employee perceives
as providing him or her with important values are satisfying, whereas jobs that the employee perceives as being
incongruent with his or her values are dissatisfying (Judge et al. 1997; Lopez 1999). Following this approach, if
employees don’t have values that are consistent with those of their organization, and therefore lacks proper fit,
they experience feelings of incompetence and anxiety (Chatman 1989). P-O misfit would also lead to
disconnected personal values for the organization, bringing out emotion of low self-esteem and lack of trust
(Kristof 1996; Kuczmarski & Kuczmarski 1995; Saks & Ashforth 1997; Vianen Van 2000; Zoghbi & Manrique
De 2008), minimize motivation in work environment and decrease in organizational commitment (Cable &
Judge 1996; Chatman 1989; McConnell 2003; O’Reilly & Chatman 1986; Silverthorne 2004; Vianen Van 2000;
Westerman & Cyr 2004; Papavero 2007).
Previous literature about person-organization fit suggests that similarity in the values of the employee
and the organization bring out positive outcomes for both of them. While past researches have examined various
aspects and impacts of fit, we specifically focus on the relationships among P-O fit and three key employee
attitudes—job satisfaction, work alienation and individual performance. In this direction, it is proposed that the
degree of congruence between the values of the employee and the organization will be positively related to
employee job satisfaction and performance level and negatively related to three dimensions of work alienation.
Studies of the impact of P-O fit on individuals find powerful correlations between P-O fit and greater
levels of job satisfaction (Nelson & Billsberry 2007; O’Reilly & Chatman 1986; Sekiguchi 2004; Lopez 1999).
Thus P-O fit researchers theorize that the degree to which an individual’s and organization’s values overlap,
termed value-goal congruence (Chatman 1991), the more satisfied the employee will be in his or her job. On the
reverse side, lack of value-goal congruence reduces employee job satisfaction, most likely through violation of
employee expectations, which in turn causes employee turnover (Bright 2007; Wheeler et al. 2007; Ostroff et al.
2005). In this direction the following hypothesis are proposed:
P1: P-O fit will be positively related to job satisfaction of academicians.
Work alienation that refers to subjective feeling states which are the result of objective work conditions is
defined as a discrepancy between the workers’ perception of objective task conditions along specific dimensions
(control, purpose and self-expression) and their expectations regarding these dimensions, which is further
intensified by the importance or salience of these dimensions. The outcomes of work alienation are a feeling of
powerlessness, meaninglessness and hence a sense of self-estrangement in work (Mottaz 1981). According to
this, powerlessness exists when workers are unable to control their job activities; meaninglessness exists when
workers contribute only minutely to the total product; and self-estrangement exists when workers view work as a
means to some other end such as making money, rather than as a means of personal self-fulfillment (Shepard
1977; Mottaz 1981).
Work alienation is the degree to which an individual identifies psychologically with a specific type of
work; it reflects a situation in which an individual cares little about work, approaches work with little energy and
works primarily for extrinsic rewards. In this context, business managers consider awareness of the work
alienation and organizational commitment of their employees to be a key concern. Ostensibly, highly committed,
less alienated employees are more productive and less likely to leave the organization (Michaels et al. 1996).
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Work alienation represents a generalized, unenthusiastic outlook toward the world of work that indicates a
low level of engagement in the work role and portrays a low level of positive affect for the world of work
(Hirschfeld & Field 2000). This unenthusiastic outlook toward work is typically regarded as stemming from
people perceiving that, in general, work endeavors do not contribute to the attainment of their personal goals or
salient needs. Because work alienation represents a generalized tendency to respond to work endeavors and
contexts in a detached manner (Hirschfeld 2002), it is proposed that, the closer the congruence between
employees' values and their organizations' values, the lower the employees' work alienation. In this direction the
following hypothesis are proposed:
P2: P-O fit will be negatively related to the powerlessness dimension of work alienation.
P3: P-O fit will be negatively related to the meaninglessness dimension of work alienation.
P4: P-O fit will be negatively related to the self-estrangement dimension of work alienation.
Job Satisfaction of
Academicians
H1
H2
PersonOrganization
(P-O) Fit
H3
Powerlessness of
Academicians
Meaninglessness of
Academicians
H4
Self-Estrangement
H5
Individual
Performance Level
Figure 1: The Relationship between Research Variables
The P-O fit literature strongly suggests that individuals who are compatible with the characteristics of
their organization will have higher performance than individuals who are less compatible (Bright 2007). In a
foundational work, Pervin (1968) theorized that when a match exists between individual and organizational
characteristics, performance tends to be high and stress tends to be low (O’Reilly et al. 1991). But only a few
studies examined the P-O fit – job performance relation and their results remained unclear. Unlike earlier
studies which showed P-O fit to relate negatively to indices of job performance (i.e., Becker et al. 1996; Meglino
et al. 1989), the study of Shin and Holland (2004) indicated that as indices of P-O fit increased, so did job
performance (Shin & Holland 2004). In this context, as the congruence between individuals and organizations
increases, employees become more committed and productive (Bright 2007). In this direction the following
hypothesis is proposed:
P5: P-O fit will be positively related to individual performance level of academicians.
Method
In order to test hypothesizes empirically; data was collected from academicians of a State University
that is located in Turkey. All scales used in this study were translated into Turkish and then translated
independently back into English (Brislin 1980). The questionnaire measured P-O fit, job satisfaction, work
alienation and job performance along with demographic variables of academicians. The questionnaire which
contained these measures was distributed to 256 randomly selected academicians of 9 faculties, 3 high schools
and 9 vocational schools of a State University. At the end of the survey 187 questionnaires were returned, for a
response rate of 73 percent. In study 41.7 percent of respondents were women (78) and 58.3 percent were men
(109).
In table 3 we see the age range of academic staff. 26.7 percent of them are between 25-31 age. 38.5
percent of them are 32-38 age. 17.1 percent of respondents are between 39-45 and 12.3 percent of them are
between 53-59 age. So we can say that most of the staff is in the middle age.
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Table 3: Age And Tenure of Academicians
Age
Age
18-24
25-31
32-38
39-45
46-52
53-59
60 and +
Frequency
1
50
72
32
23
6
3
Tenure
Percent
.5
26.7
38.5
17.1
12.3
3.2
1.6
Years
1-5
6-10
11-15
16-20
21-25
26 and +
Frequency
48
62
37
18
14
8
Percent
25.7
33.2
19.8
9.6
7.5
4.3
Academic staff’s tenure is shown in table 3. According to table, 25.7 percent of the staffs are between 15 years job tenure. 33.2 percent are between 6-10 years, 19.8 percent are 11-15 years, 9.6 percent are 16-20 years
and 7.5 percent are 21-25 years.
Measures and Analyses
In this study person-organization fit was measured by three items adapted from Cable&Judge
(1996). Work alienation was measured a scale (powerlessness, meaninglessness, and self-estrangement)
proposed by Mottaz (1981), job satisfaction was measured five items adapted by Brown&Peterson (1994), and
individual performance was measured by four items adapted from Kirkman and Rosen (1999). All constructs
were measured with scales adapted from existing scales. All items were measured on a five-point Likert-type
scale where “1 strongly agree” and “5 strongly disagree”.
This study assessed perceived P-O fit. In perceived or direct P-O fit, academic personnel estimated the
extent to which their values are similar to those of their University. We used the three-item five-point Likert
scale developed by Cable and Judge (1996). Items include “My values match those currently in the
organization”, “The values and ‘personality’ of this organization reflect my own values and personality”, and “I
feel my values ‘match’ or fit this organization and the current employees in this organization”. Job satisfaction
was measured a scale developed by Brown and Peterson (1994). The demographic variables in the study are age,
gender and job tenure. In addition to these, the questionnaire includes the department and academic rank of
respondents.
In study the coefficient alpha was used to estimate the reliability for scales. Three items for P-O fit
measure had alpha reliabilities 0.82. Alpha reliability for job satisfaction was 0.74, for powerlessness was 0.79,
for meaninglessness was 0.64 and for self-estrangement of academicians was 0.79. These results indicate that the
internal consistency reliabilities for all of the scales were reasonable.
Table 4: Descriptive Statistics and Reliabilities
Variables
P-O Fit
Job Satisfaction
Work Alienation
• Powerlessness
• Meaninglessness
• Self-Estrangement
Job Performance
Mean
2.7362
2.2130
Std. Deviation
.89765
.74350
Coefficient Alpha
.8228
.8637
N
187
187
2.3066
2.3155
3.0419
2.0936
.80981
.60078
.31233
.66645
.7948
.6452
.7941
.8096
187
187
187
187
After the reliability analyses, means and standard deviations for each variable were calculated and a
correlation matrix of all variables used in hypothesis testing was created. Means, standard deviations, coefficient
alpha and correlations among all scales used in the analyses are shown in Table 4 and 5. The means and standard
deviations are within the expected ranges.
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Table 5: Pearson Correlations Among All Research Variables
Research Variables
1.P-O Fit
2.Job Satisfaction
3.Powerlessness
4.Meaninglessness
5. Self-Estrangement
6.Job Performance
Means
Std.Deviation
N
1
1
.556**
.314**
.401**
-.057
.296**
2.7362
.89765
187
2
3
4
5
6
1
.485**
.543**
.109
.447**
2.2130
.74350
187
1
.420**
.041
.227**
2.3066
.80981
187
1
.084
.288**
2.3155
.60078
187
1
.111
3.0419
.31233
187
1
2.0936
.66645
187
** Correlation is significant at the 0.01 level (2-tailed).
* Correlation is significant at the 0.05 level (2-tailed).
The pattern of correlations is supportive of our four hypothesizes. That is, correlation coefficients
between P-O fit and job satisfaction, job performance are significant and in the predicted direction (positively
related). For example, P-O fit correlate with job satisfaction .556 (strongly correlate) and with job performance
.296 (weakly correlate). Correlation coefficients between P-O fit and powerlessness, meaninglessness are
significant and in the not predicted direction (positively related). For example, P-O fit correlate with
powerlessness .314, with meaninglessness .401. But correlation coefficient between P-O fit and selfestrangement is non-significant, and not supportive of our fourth hypothesis.
Results
The findings show that P-O fit is related to job satisfaction and job performance of academicians. In
addition to this, P-O fit is positively related to meaninglessness and powerlessness, and non-significant relation
with self-estrangement.
Results support P1, P5 indicating that P-O fit positively related to academicians’ job satisfaction
behaviors. It was proposed that as the compatibility between academicians and their organization increases, job
performance will also increase. This hypothesis was weakly supported by the findings of the current study. As
the congruence between the respondents and their organization increased, their job performance also increased.
Therefore, P1 and P5 were supported. P-O fit positively related to academicians’ powerlessness and
meaninglessness behaviors directed at their university. Therefore, P2 and P3 were not supported. P-O fit and selfestrangement is non-significant. So there is no relation between them. Therefore, P2, P3 and P4 were not
supported.
Limitations and Implications
This study makes an important contribution to the literature, but is limited by two key issues. First, the
results are based on a single sample. An important consideration is whether the findings of this study will
generalize across jobs and organizations. In this context more research is needed to untangle the varying
relationships between P-O fit indices and employee job attitudes.
In this study we examined perceived congruence between organizational and employees' values. Recent
studies have confirmed that both perceived and actual fit with the organization have independent and interactive
relationships with job attitudes (Ravlin & Ritchie 2006).
Even though the vast amount of research on P-O fit that has been already done, there still are a lot of
research opportunities to investigate the role of P-O fit in organizations. Future research is expected to include
new topics such as the simultaneous effects of P-O fit on many other work attitudes e.g. organizational
citizenship behaviors, organizational commitment, tenure, career success and turnover intention in a crosscultural perspective.
Conclusion
Empirical facts have shown that a high level of P-O fit is related to academicians work behaviors and
performance. Fit has been positively related to individuals’ job satisfaction and job performance and positively
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related to work alienation. While past researches have examined various aspects of fit we specifically focus on
the relationship between perceived P-O fit and job performance and job satisfaction, work alienation of
academicians.
The research results show that P–O was positively related to individuals’ satisfaction and performance
consistent with previous research. According to this, the closer the congruence between academicians' values and
their universities' values, the higher the academicians' job satisfaction and performance. The results also provide
that P-O was positively related to powerlessness and meaninglessness at work. The other result shows that there
is a non-significant relation between P-O fit and self-estrangement. These results were inconsistent with the
literature. Therefore, the consequences partially reinforce the findings from earlier research (Chatman 1991) that
the concept of P-O fit plays an important role for academicians in a variety of organizational settings. Finally,
this research provides support for the importance of P-O fit in organizations (Silverthorne 2004) and also
indicates the incongruity between P-O fit and work alienation in Turkish State University.
This empirical research shows that P-O fit results were estimated direction in Turkish State University,
as compared with literature for job satisfaction and performance. On the other hand P-O fit and results about
work alienation were inconsistent with the literature. It means that P-O fit level increase work alienation
(powerlessness and meaninglessness) increase at the same directions. As academicians and organization fit
seems high we can say that our research result is indicating some important problems such as weak
organizational culture and leadership style. Therefore, the future studies should search the reasons of work
alienation and P-O fit results. And also further cross-cultural studies should be done at the state and private
universities’ academic staffs in different countries.
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Extent
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276
Title
A name given to the resource
Individual and Organizational Fit: It’s Impact on Turkish Academic Staff
Author
Author
iPLiK, Fatma Nur
YALÇIN, Azmi
KILIÇ, Kemal Can
Abstract
A summary of the resource.
Achieving congruence between the values of the employee and the organization which often is called person-organization (P-O) fit that has gaining a growing interest in the organizational behavior field in recent years is the main theme of this article. Researches about P-O fit (O’Reilly & Chatman 1986; Lauver & Kristof-Brown 2001; Cable & DeRue 2002; Sekiguchi 2004; Hoffman & Woehr 2006; Nelson & Billsberry 2007) revealed that a high level of congruence has a positive impact on job attitudes of individuals and creates a number of positive outcomes for organizations. P-O fit that affects the degree to which an individual is liked by co-workers, supervisors, and subordinates (Judge & Ferris 1992) improves individual and organizational effectiveness. Because P-O fit has been positively related to job attitudes (organizational commitment, motivation, job satisfaction, organizational citizenship behaviors) and negatively related to turnover intentions of employees, the congruence between individual and organizational values could be critical for the organizations. In this context, this study attempts to explore the relationships between the P-O fit and job satisfaction, work alienation and individual performance level of academicians. In order to test hypothesis empirically; data was collected from academicians of a State University that is being in the list of Top 500 World Universities located in Turkey. After the reliability, correlation and regression analyses, we conclude by discussing implications, limitations, and future researches concerning the P–O fit.
Date
A point or period of time associated with an event in the lifecycle of the resource
2009-06
Keywords
Keywords.
Conference or Workshop Item
PeerReviewed
HB Economic Theory