Jucpa volume 10 number 11 november 2013

Volume 10, Number 11, November 2013 (Serial Number 97)

Journal of US-China

Public Administration

David Publishing Company

www.davidpublishing.com

PublishingDavid

Publication Information: Journal of US-China Public Administration is published every month in print (ISSN 1548-6591) and online (ISSN 1935-9691) by David Publishing Company located at 16710 East Johnson Drive, City of Industry, CA 91745, USA. Aims and Scope: Journal of US-China Public Administration, a professional academic journal, commits itself to promoting the academic communication about analysis of developments in the organizational, administrative and policy sciences, covers all sorts of researches on social security, public management, land resource management, educational economy and management, social medicine and health service management, national political and economical affairs, social work, management theory and practice etc. and tries to provide a platform for experts and scholars worldwide to exchange their latest researches and findings. Editorial Board Members: Patrycja Joanna Suwaj (Stanislaw Staszic School of Public Administration, Poland) Maria Bordas (Corvinus University of Budapest, Hungary) Sema Kalaycioglu (Istanbul University, Turkey) Lipi Mukhopadhyay (Indian Institute of Public Administration, India) Ludmila Cobzari (Academy of Economic Studies from Moldova, Republic of Moldova) Andrew Ikeh Emmanuel Ewoh (Kennesaw State University, USA) Paulo Vicente dos Santos Alves (Fundação Dom Cabral—FDC, Brazil) Neelima Deshmukh (Rashtrasant Tukdoji Maharaj Nagpur University, India) Robert Henry Cox (University of Oklahoma, USA) Beatriz Junquera (University of Oviedo, Spain) Massimo Franco (University of Molise, Italy) Manuscripts and correspondence are invited for publication. You can submit your papers via Web Submission, or E-mail to [email protected]. Submission guidelines and Web Submission system are available at http://www.davidpublishing.com Editorial Office: 16710 East Johnson Drive, City of Industry, CA 91745 Tel: 1-323-984-7526; 323-410-1082 Fax: 1-323-984-7374; 323-908-0457 E-mail: [email protected]; [email protected] Copyright©2013 by David Publishing Company and individual contributors. All rights reserved. David Publishing Company holds the exclusive copyright of all the contents of this journal. In accordance with the international convention, no part of this journal may be reproduced or transmitted by any media or publishing organs (including various websites) without the written permission of the copyright holder. Otherwise, any conduct would be considered as the violation of the copyright. The contents of this journal are available for any citation, however, all the citations should be clearly indicated with the title of this journal, serial number and the name of the author. Abstracted / Indexed in: Database of EBSCO, Massachusetts, USA Chinese Database of CEPS, Airiti Inc. & OCLC Chinese Scientific Journals Database, VIP Corporation, Chongqing, P.R.China Ulrich’s Periodicals Directory ProQuest/CSA Social Science Collection, Public Affairs Information Service (PAIS), USA Summon Serials Solutions Subscription Information: Print $520 Online $360 Print and Online $680 (per year) For past issues, please contact: [email protected], [email protected] David Publishing Company 16710 East Johnson Drive, City of Industry, CA 91745 Tel: 1-323-984-7526; 323-410-1082. Fax: 1-323-984-7374; 323-908-0457 E-mail: [email protected]

David Publishing Company

www.davidpublishing.com

DAVID PUBLISHING

D

Journal of US-China Public Administration

Volume 10, Number 11, November 2013 (Serial Number 97)

Contents

Public Service Delivery Challenges and Reform

A Targeted Approach to the Provision of Ubiquitous Healthcare Services for the Newly Retired 1035

Joseph Alexander Meloche

Climate Conditions, Larvae Free Number, DHF Incidence in Surabaya Indonesia 1043

Ririh Yudhastuti, Prijono Satyabakti, Hari Basuki

Public Policy and Regional Economy

Farmer Associations and Rural Development in Taiwan 1050

Kun-Jung Liao

The Assessment of the Impact of an Aging Population of China on the Country’s Economy 1061

Inna Stecenko

Collaborating Public Organizations

Transformational Leadership and Organizational Outcomes: Evidence From Vietnamese Workers 1070

Ngoc-Hong Dao, In-Soo Han

Bribery Problem in Kuwaiti Public Administration 1083

Yousef Mohammad Al Mutairi, Mohammad Qasem Ahmad Al-Qarioti

New Public Management Issues

Management Control, Performance Factor in Moroccan Universities “Case of the University Hassan I of Settat” 1098

Fatima Ouahraoui, Mohamed Makhroute, Nada Soudi, Said Elmezouari, Laila Loukili Idrissi

Model for Management of Public Funds Transfers in SICONV 1115

Luiz Lustosa Vieira, Ilka Massue Sabino Kawashita

Journal of US-China Public Administration, ISSN 1548-6591 November 2013, Vol. 10, No. 11, 1035-1042

A Targeted Approach to the Provision of Ubiquitous Healthcare

Services for the Newly Retired

Joseph Alexander Meloche

North Carolina Central University, Durham, US

The purpose of this research is to discuss a targeted approach to health care provisions for the newly retired. This

approach focuses on the application of specific services provided by the development of Web 2.0 technologies and

an identification system that determines the needs of a community of newly retired. The paper examines the

significance of this community and also discusses the steps required for the research. The first phase of the research

which is covered here involves reviewing pervious literature to determine what information has been gathered

about the subject. Once this has been accomplished that the researcher will investigate the defined community to

determine what resources are in place and what additional resources need to be in put in place in order to help the

community to continue to thrive. The final steps include implementing what services were found to be necessary

for the continued growth of the community and a follow-up concerning the success of these services.

Keywords: newly retired, ubiquitous, health care services

Health care provision can best be supported by information services that are designed and selected

specifically for a defined community of users. The application of these targeted services needs to address, the

information needs of a specific and identified, information user population, and service facilities with a defined

area available from the service providers. There also needs to be provision for direct ubiquitous (online)

interaction between the community of user and service providers. The researcher sees this information service

including collections of information directly relevant to the user community, and as a venue for the service

providers to “push” timely information to the user community and to “pull” need related information from the

community of users. This facility should also provide an ubiquitous environment in which for the community to

post questions, and have solutions provided by authoritative professionals. Thus in this way, it will increase the

effectiveness of current information services and service providers, by providing specific and identified sets of

information to a well-defined group of information users. While the internet, the web, and a host of related

services have provided almost universal ubiquitous access to information resources; it is ubiquitous access to

relevant and germane resources that will fit the context of a person’s identified needs and locality that remains a

challenge.

The developments of Web 2.0 and its supporting technologies have offered the hope of including the user

or user group in the model and the proposed project aims to utilize the services of Web 2.0 and its supportive

technologies (such as smart phones, e-readers, tablets, etc.) to provide access to accurate and comprehensive

Corresponding author: Joseph Alexander Meloche, Ph.D., assistant professor, School of Library and Information Sciences,

North Carolina Central University; research field: information studies. E-mail: [email protected].

D DAVID PUBLISHING

APPROACH TO THE PROVISION OF UBIQUITOUS HEALTH CARE SERVICES

1036

sources of health related information both to newly retired seniors and to health information providers.

However there is still a long way to go to make the relevant timely and germane information available in a

transparent ubiquitous manner that suits in format scope and timely delivery the needs of a specific user or user

group. The members of user groups need to be identified in terms of the context of the use, which from an

Activity Theory (AT) perspective is the activity(s) that they are being undertaken. Research that can capture the

perceptions of need from both the newly retired and the care provision community is required. The work

proposed here applies an AT framework and Q Methodology to identify the perceptions and scope of required

information and to aid in the development of applications and resources that can address the information needs

for the newly retired of the Durham Community.

Newly Retired—Significance

Given the general rise in the elderly population, those aged 65 and older, logically, the need for

information specific to their age group has also increased. However there are a number of barriers preventing

ubiquitous access to comprehensive and accurate information, a fact which is particularly concerning when

considering the seniors’ need have to access reputable sources of health related information. A number of

studies (Wicks, 2004; Given, Ruecker, Simpson, Sadler, & Ruskin, 2007; Eriksson-Backa, 2010) have shown

that seniors tend to seek health related information from interpersonal contacts, including friends, family,

pharmacists, and physicians. However these sources of information may be ill-suited to adequately address all

of an individual senior’s needs. While friends and relatives share information with seniors, as they are not

professionals, they may not provide the most current, appropriate or accurate information.

Conversely, while older persons tend to count physicians among their interpersonal contacts as sources of

information, Junius-Walker et al. (2011) showed that patients and physicians have different ideas of what is

important where patient health is concerned. Additionally, increasing demand and rising healthcare costs have

created situations in which physicians can have as little as 15 minutes per patient, leaving a limited amount of

time to address concerns which they perceive as non-immediate (Belzer, 1999; Brownlee, 2012; Johnson &

Capsso, 2012). As such, it seems that in many cases there is much potential for a patient not to have all of their

information needs addressed via interpersonal contacts.

The presence of multiple health issues, economic factors, and a desire to maintain independence are

factors which may lead seniors to seek health related information online (Eriksson-Backa, 2010; Given et al.,

2007; Macias & McMillan, 2008). Many, however, have difficulties navigating the web due to low internet

literacy skills or web designs which are not created with elder usability in mind, or simply due to the excessive

content and unorganized nature of many sites. Seniors, who may have visual and motor impairments, tend to

require particular features in website designs to facilitate navigation (Ellis & Kurniawan, 2000; Dinet & Vivian,

2009). These considerations are not always taken into account when websites are constructed or which provide,

or appear to provide, health information. The Kaiser Family Foundation (2005) report showed that seniors can

also have difficulty choosing reputable sources of information online and that they can be overwhelmed by the

amount and/or presentation of information available.

Given this set of circumstances, it is clear that a means of acquiring relevant health information digitally,

which is concise and yet as complete as possible, available in multiple languages, and provided in a format or

platform that is designed for senior usability is necessary to address the growing need for senior-specific health

related information in the modern era. According to the National Eye Institute (2006), “Health literacy has been


1037

identified as a significant barrier to the receipt of health care services and is increasingly recognized as a

problem that impacts health care quality and costs” (p. D5). Health care provision can best be supported by

information services that are designed specifically for a defined community of users. The application of these

targeted services needs to address the information needs of a specific and identified information user population

available from the service providers and service facilities within a defined area. There is also a need for

provision of direct (online) interaction between the community of users and service providers.

While it is acknowledged that some seniors feel that they have missed the computer age, this may not be

the case for new retirees as more than half of Americans aged 50 to 64 currently use the internet (National Eye

Institute, 2006). Individuals 55 and over have shown some of the largest increase of Web 2.0 technology usage

such as: tablets, smart phones, and e-readers since 2010 (Bonnington, 2011; Nielsen, 2011). The aim of the

research involves the provision of health related information digitally through such devices via an information

service which includes collections of information directly relevant to the user community. This will result in a

“platform” that serves as a venue for the service providers to “push” timely information to the user community.

It should also provide an easy method for the community to post questions, which can be answered by

authoritative professionals or the member community. Thus, in this way, it will increase the effectiveness of

current information services and service providers to a specific and identified set of information users. For the

purposes of this project, the user constitutes recent retirees in need of health related information as well as the

institutions and information service organizations which seek to provide recent retirees with such information.

The clients to be served are the newly retired community (including individuals who may have retired

earlier or later than typical US retirement age of 65) in Durham, North Carolina in addition to the health

information providers (HIPs) which serve them. This selection was made because, as previously stated, recent

retirees are a health disparity population in need of health related information and because retirees are shown to

be embracing new technology contrary to the stereotype of their having an aversion to it. In the current

atmosphere of e-health and m-health capabilities as well as the strain on medical services created by “Baby

Boomer” retirement, there is a need to bridge the gap between these two phenomena. This research is premised

on the need for information to be specific and germane to an identified user community, in this case Durham,

N.C. retirees. While this case is narrow, it is envisioned that this technique could be applied internationally to

any specific and underserved population. The focus in this study will be on needs associated with information

related to health service provision. This would include the provision of information that is deemed important by

both the user community and the service providers. Durham, N.C. is noted as among the top regions in the

country for growth as a retirement community.

This project has the potential to affect a large portion of the Durham community. Not only will the newly

retired be impacted but also family members who may be involved in their care in addition to community and

health centers and organizations which target retirees. According to the 2010 Census, people 65 years old and

over represent roughly 10% of the population of Durham County, equaling about 25,000 people; of those,

approximately 13,000 are within the general retirement age range, ages from 65 to 74 (US Census Bureau,

2012). It should also be noted that this figure may not represent accurately the growing and aging Hispanic

population in Durham, who are said to comprise more than one in ten of Durham County’s population but may

be underrepresented in the census due to the undocumented status of a proportion of that population. North

Carolina remains the ninth most populous state for undocumented immigrants and the state ranks eighth in the

number of illegal immigrants in its labor force (Barrett, 2011). As Spanish-speakers in the county come into


1038

retirement age, their health related information needs will also need to be reconciled with their linguistic needs.

This project intends to address this dimension of information need as well. As the focus is on information

services for the “newly retired”, it will have a continuously flowing population of users, who if serviced well by

information services during their initiation into retirement, should experience reduced difficulties into the future.

With each year as people become new retirees in this community, they will be aided and supported by the

refinement of services experienced by their forerunners. Thus, this project will actively seek to improve the

quality of life and life experiences by its ubiquitous provision of targeted information to the newly retired

community.

AT is defined as, “a practice-based theory” that when used in organisation studies, provides a powerful

alternative lens through which to consider the findings (Greig, 2011, p. 306). Greig, Entwistle, and Beech (2012)

addressed complex healthcare problems in diverse settings: insights from activity theory.

The key elements of an AT analysis are subject, tools, object, rules, community, and division of labor. AT

will be utilized in the research process to help with the development and analysis of the various information

resources and access services for the newly retired. The primary component of the analysis is the purposeful

activity of the subject as they seek to obtain their object(ives). The outcome refers to the actuation achievement

and in a successful activity will be closely related to the object being pursued. Importantly AT provides a

comprehensive and relevant set of elements that supports and impacts on the process of achieving the desired

object. These include relevant tools/instruments, the specific subject, in this case is the newly retired, rules or

conditions, that relate to health information service provision, the community which is comprised by Durham

County, and the division of labor relating to various agencies providing health information and health services

to the elderly community. The area that we will focus on is on innovation, accomplished by an introduction of

new “tools”, seen here in the broadest of senses including processes as well as information sets and access

facilities. Importantly this research study will seek to allow the information user (the newly retired) and the

community of information providers to work together regarding the assessment of needs and methods selected

to address those needs. This will be accomplished by the application of Q Methodology to ascertain the

perceptions held with regard to these matters by both the newly retired and the community of service providers.

Thus, the initial analysis of the needs will be done using the model provided by AT. The study looks at the

influences (comprised of the elements discussed above) that are impacting upon the subject’s, activities. AT is a

theoretical framework intended to inform the re-design of human activities based on inquiries into new

concepts and models for human activity. It is a methodology that supports interventions to promote and define

innovative collaborative practices. AT will also be used in the third year to assess the achievements and effects

of the service intervention and to refine and improve service provision. Research through surveys on

pre-knowledge and post-skills with information will also help with the assessment of impact.

Web 2.0 Innovation

This research will support enhanced information service provision with a range of social and collaborative

technologies, commonly referred to as Web 2.0 technologies. Web 2.0 promotes users and their

interconnections through the following affordances: (1) user-defined linkages between users and content (e.g.,

posting on others’ pages); (2) simple mechanisms to share multimedia content (e.g., blogs); (3) prominent

personal profiling (e.g., displaying user preferences on customized profile pages); and (4) inter-technology

applications, enabling interfaces with services and features on other sites (Cormode & Krishnamurthy, 2008).


1039

The innovation provided will be informed by research into the application of Web 2.0 technologies to

meet the information needs of the newly retired community in the Durham Community. The project will, in

taking this approach, be able to address their health information needs in an accurate and precise manner by

directing them to local services and sources of information and by identifying knowledge gaps that may exist as

well. This is done to address their arising needs in a responsive manner. It is also envisioned that the project

will allow for them to record their informational activities, aiding in the analysis of their evolving needs and

ultimately leading to support for information service providers in the enhancement and development of their

services.

Collaborative technologies themselves are unique in which they arose in the public domain and have only

recently been drafted to support service provision in more formal settings. The informed adoption of these

technologies will not only allow us to bring health information delivery up-to-date; it will also provide the

means to identify and adopt technologies as they arise in a purposeful manner. It is important, to be as effective

as possible, that these developments are informed by research.

To date most information provision for the elderly has occurred in face-to-face delivery. However

collaborative information use through traditional methods (face-to-face, phone, email) has been found to be

more useful than individually seeking information (Spence, Reddy, & Hall, 2005). While the field of

collaborative practices in face-to-face settings still warrant research and improvement, little formal research has

been done in conjunction with online collaboration based on the interactive facilities provided by Web 2.0 and

rated developments. To-date, traditional online environments have impeded collaboration because they lack the

immediacy and feedback of face-to-face contact. More recently however, Web 2.0, which supports interactivity,

diversity, and collaboration, has caused a change in the role of online service provision and made interactive

activities possible. A better understanding of information seeking and service provision in the new environment

will benefit the design of effective information systems to support collaborative activities and service provision

generally. It is expected that the methods developed in this project will be applicable as a model for other

defined groups of users and service providers. It is the intention of the researcher to create an information

provision medium that is comprised exclusively for the community being served in the most transparent and in

the most accessible form possible.

A Way Forward-Approach

To meet the needs of the community this project will begin with a mapping of health information service

providers in the Durham region. It will then conduct an information survey of the providers to discern the range

and extent of the service providers while simultaneously identifying the population of recently retired

individuals in Durham, N.C. Once the community of newly retired individuals is identified, the researcher will

proceed with a study to determine their perceived health information needs. The ultimate aim will be not only

to provide the information that they require, but also to provide it in a mode that addresses their user

requirements. Where possible, the simplest and most at hand solution will be selected, with attention being paid

to providing an up-to-date, ongoing and responsive information service provision in accordance with the

information needs identified in the research study. The study will be comprised of a broad based survey to

identify and inform the user and service community in addition to a smaller Q Methodological Study to identify

the perceived information needs from the perspective of both the user community and their information service

providers. The process will proceed in the following manner:


1040

(1) The first step will utilize user-based research to identify the user community and all potential

information service providers;

(2) The second step will be to identify the information services that are available in detail for the

community of users. It will also establish how current health information service provisions facilitate

requirements that are germane to the user community, the newly retired;

(3) The third step will be to conduct research using a Q Methodological Study to determine the perceived

information needs of both the user community and the community of healthcare service providers;

(4) The fourth step will be to assemble the information and services in a form(s) that will meet the

identified needs and to evaluate and refine the service provision. The development of the set of information

resources, access services and the like will result from an AT analysis of the needs, based on the information

obtained from the above research;

(5) The fifth step is the implementation of the set of information resources and access services to the

community;

(6) The sixth and final step is an implementation review and revision of the services in final two months.

The service provision will be timely as it will include, but not be limited to, many Web 2.0 services that

are currently available. Also comparatively inexpensive, off-the-shelf devices such as e-readers, tablets, etc.,

will be used to host the information and/or provide access to service providers who host the information or

advice services.

One of the key envisioned strengths of this information service provision is its limited nature. That is, as it

addresses a specific community, bound by age and geographic area, it will allow for the provision of timely,

relevant information that can be delivered in a medium desired and suitable to the user community. The limited

scope will mean that the quality of information provided will be high and relevant and multiple modes of access

can be provided, maintained, refined, and adapted as needs and services change and technological advances

arise.

It is not the intention of this study to develop new information services, although it may well identify gaps

in existing service provision. Its intention is to provide improved, effective access, in a multimodal manner, to a

select set of services and a defined user community. In addition, the goal is to maximize access to relevant

service provision for this specific community. It is envisioned that this model of targeted, adaptive service

provision will gain momentum and will be a model for similar service provision endeavors.

As previously mentioned, it is not the goal of this project to develop new information services. Rather, the

specific aims are:

(1) To facilitate this population’s access to health related information that both they and HIPs deem

relevant, including anything from finding medical supplies and services to obtaining information about

medicines and diagnoses. This will be achieved with the creation of the service itself and the provision of

training and technologies to individual retirees and HIPs;

(2) To discover both what health related information is needed and better methods of disseminating it

based upon the feedback provided by both retirees and HIPs. Through use of the service and the receipt of

feedback through regular interviews and the application of research using Q Methodology within the project, to

gain access to users’ perceptions of what is important and needed regarding health related information

gathering and dissemination in both personal and general senses and from both the point of view of both the

retiree and the HIP;


1041

(3) To support a network of communication between retirees and providers via Web 2.0 technologies that

can be built upon as new portions of the community become retirees annually. The dissemination of

information will be facilitated by the provision of computing devices, but will not be limited to use of these

devices. Retirees will be able to build upon the information utilized and recommended by other retirees who

have used the service. They will also have the opportunity to recommend the information they utilize to others

among their interpersonal contacts. HIPs will be able to utilize the service to identify customers’ needs and

dissemination requirements regarding health related information.

Each user, whether it is a group or individual, will be provided with or with access to mobile computing

technology for the purposes of this project, will receive initial training and ongoing support from the research

team. Evaluations of information seeking and evaluation skills will be conducted both at the beginning and end

of the study. Q Methodology will also be employed to evaluate perceptions of health information need. Overall

assessment of the project will be conducted utilizing interviews from users, surveys, and use statistics gathered

from the technology.

Conclusions

The developments of Web 2.0 and its supporting technologies offer the hope of access to accurate and

comprehensive sources of health related information for newly retired seniors and to health information

providers. This paper has presented a way forward applying an AT perspective that can capture the perceptions

of need from both the newly retired and the care provision community. The work proposed here applies an AT

framework and Q Methodology, to identify the perceptions and scope of required information and to aid in the

development of applications and resources that will address the information needs for the newly retired of the

Durham and similar communities.

References Barrett, B. (2011, February 1). Number of undocumented immigrants in N.C. basically unchanged. The News & Observer.

Retrieved from http://www.newsobserver.com/2011/02/01/961120/number-of-undocumented-immigrants.html Belzer, E. (1999). Improving patient communication in no time. American Academy of Family Physicians, 6(5), 23-28. Retrieved

from http://www.aafp.org/fpm/1999/0500/p23.html Berland, G. K., Elliott, M. N., Morales, L. S., Algazy, J. I., Kravitz, R. L., Broder, M. S., & McGlynn, E. A. (2001). Health

information on the internet. JAMA: Journal of the American Medical Association, 285(20), 2612. Bonnington, C. (2011, August 29). Seniors, women embracing tablets, e-readers. Retrieved from http://www.wired.com/

gadgetlab/2011/08/mobile-tech-demographics/ Brownlee, S. (2012, April 23). The doctor will see you—If you’re quick. Newsweek, 159(17/18), 46-50. Cormode, G., & Krishnamurthy, B. (2008). Key differences between web 1.0 and web 2.0. First Monday, 13(6).

doi:10.5210/fm.v13i6.2125 Dinet, J., & Vivian, R. (2009). Elderly people as web seekers: Needs, strategies and difficulties. In I. Maurtua (Ed.),

Human-Computer Interaction (pp. 389-404). Retrieved from http:// www.intechopen.com/download/get/type/pdfs/id/8977 Ellis, R. D., & Kurniawan, S. H. (2000). Increasing the usability of online information for older users: A case study in

participatory design. International Journal of Human-Computer Interaction, 12(2), 263-276. Eriksson-Backa, K. (2010). Elderly people, health information, and libraries: A small-scale study on seniors in a language

minority. International Journal of Libraries & Information Services, 60(2), 181-194. Given, L. M., Ruecker, S., Simpson, H., Sadler, E., & Ruskin, A. (2007). Inclusive interface design for seniors: Image-browsing

for a health information context. Journal of the American Society for Information Science & Technology, 58(11), 1610-1617. Greig, G., Entwistle, V. A., & Beech, N. (2012). Addressing complex healthcare problems in diverse settings: Insights from

activity theory. Social Science & Medicine, 74(3), 305-312. doi:10.1016/j.socscimed.2011.02.006 Johnson, M., & Capasso, V. (2012). Improving patient flow through a better discharge process. Journal of Healthcare


1042

Management, 57(2), 89-93. Junius-Walker, U., Stolberg, D., Steinke, P., Theile, G., Hummers-Pradier, E., & Dierks, M. (2011). Health and treatment

priorities of older patients and their general practitioners: A cross-sectional study. Quality in Primary Care, 19(2), 67-76. Macias, W., & McMillan, S. J. (2008). The return of the house call: The role of internet-based interactivity in bringing health

information home to older adults. Health Communication, 23(1), 34-44. NCCU (North Carolina Central University). (2012). Quick facts. Retrieved from http://www.nccu.edu/discover/quickfacts.cfm Nielsen. (2011, August 25). Changing demographics of tablet and eReader owners in the US. Retrieved from

http://blog.nielsen.com/nielsenwire/online_mobile/changing-demographics-of-tablet-and-ereader-owners-in-the-us/ Peña-Purcell, N. (2008). Hispanics’ use of internet health information: An exploratory study. Journal of the Medical Library

Association, 96(2), 101-107. Proctor, E., Luke, D., Calhoun, A., Brownson, R., & McMillen, C. (2012). Sustainability of evidence-based healthcare: Research

agenda and methods. Proceedings from Conference on Advancing the Science of Dissemination and Implementation, March 2012, Washington University in St. Louis. Retrieved from http://conferences.thehillgroup.com/obssr/di2012/resources/ 3E_Proctor_Sustainability%20of%20Evidence-Based%20Healthcare.pdf

Rideout, V. J., Neuman, T., Kitchman, M., & Brodie, M. (2005). E-health and the elderly: How seniors use the internet for health information. Menlo Park, C.A.: Henry J. Kaiser Family Foundation. Retrieved from http://www.kff.org/entmedia/upload/ e-Health-and-the-Elderly-How-Seniors-Use-the-internet-for-Health-Information-Key-Findings-From-a-National-Survey-of-Older-Americans-Survey-Report.pdf

Sarriot, E. G., Winch, P. J., Ryan, L. J., Edison, J., Bowie, J., Swedberg, E., & Welch, R. (2004). Qualitative research to make practical sense of sustainability in primary health care projects implemented by non-governmental organizations. The International Journal of Health Planing and Management, 19(1), 3-22.

Spence, P. R., Reddy, M., & Hall, R. (2005). Proceedings from Group’05: A Survey of Collaborative Information Seeking of Academic Research. Sanibel Island, F.L.

US Census Bureau. (2012). State & county quick facts: Durham County, North Carolina. Retrieved from http://quickfacts.census.gov/qfd/states/37/37063.html

US Department of Health and Human Services, Office of Disease Prevention and Health Promotion. (2010). National Action to Improve Health Literacy. Washington, D.C.: National Eye Institute.

Wicks, D. A. (2004). Older adults and their information seeking. Behavioral and Social Sciences Librarian, 22(2), 1-26. Wikipedia. (2011). North Carolina Central University. Retrieved from http://en.wikipedia.org/wiki/North_Carolina_

Central_University


Climate Conditions, Larvae Free Number, DHF Incidence in

Surabaya Indonesia

Ririh Yudhastuti, Prijono Satyabakti, Hari Basuki

Airlangga University, Surabaya, Indonesia

Dengue is a serious public health problem in Indonesia, including the city of Surabaya. Dengue is endemic

Surabaya city in Indonesia. Dengue incidence has been attributed to climatic conditions, this study aimed to

determine the relationship of climate conditions (air temperature, relative humidity, rainfall, number of days rain,

and duration of solar radiation), the condition of dengue vectors (larvae-free number), the incidence of DHF

(Dengue Hemorrhagic Fever) in Surabaya in 2010-2012. The results of this study indicate that there is a significant

correlation among air humidity, rainfall, number of rainy days, and duration of solar radiation with the incidence of

DHF. Other climatic conditions such as temperature have no relationship with the incidence of DHF.

Keywords : climate conditions, larvae-free number, Dengue Hemorrhagic Fever (DHF), Surabaya Indonesia

Vector borne diseases such as malaria and Dengue Hemorrhagic Fever (DHF) is necessary because the

transmission of diseases such as these will increase with climate change (Glen & Sia, 2008; World Health

Organization [WHO], 2013). In many tropical countries the disease is a cause of death (WHO, 2013; Amah,

Rina, & Ririn, 2010; Chakravarti & Kumaria, 2005). Dengue continues to spread widely in tropical and

subtropical countries, about 2.5 billion people (two fifths of the world population) are at risk for dengue virus

infection (WHO, 2013). More than 100 tropical and subtropical countries have experienced outbreaks of

dengue, approximately 500,000 cases each year are hospitalized with thousands of fatalities (WHO, 2013;

Chakravarti & Kumaria, 2005). Dengue has become endemic in large cities in tropical countries, including

Indonesia (Surabaya City Health Department, 2012). Since it was first discovered in 1968 in the city of

Surabaya number of dengue incidence continues to rise and spread to all areas of the city (Surabaya City Health

Department, 2012; Brisbois & Ali, 2010).

Some studies show the spread of the disease from a large urban area that acts as a reservoir of virus spread

to many residential areas smaller communities (Chakravarti & Kumaria, 2005). Climatic conditions that affect

the incidence of dengue such as rainfall, temperature, and humidity can influence the condition of dry Aedes

eggs to develop into larvae when exposed to water, the larva to pupa and finally to adult mosquitoes

The authors thank to the Ministry of Education and Culture of the Republic of Indonesia through Airlangga University, with financial support BOPTN 2013 this research can be accomplished.

Corresponding author: Ririh Yudhastuti, School of Public Health, Airlangga University; research field: environmental health. E-mail: [email protected].

Prijono Satyabakti, School of Public Health, Airlangga University; research fields: epidemiology and infectious diseases. E-mail: [email protected].

Hari Basuki, School of Public Health, Airlangga University; research fields: biostatistics and demography. E-mail: haribasuki.nb @gmail.com.

D DAVID PUBLISHING

CLIMATE CONDITIONS, LARVAE FREE NUMBER, DHF INCIDENCE

1044

(Wongkoon, M. Jaroensutasinee, K. Jaroensutasinee, Preechapon, & Chumkiew, 2006; Halide & Ridd, 2008;

Satoto, Umniyati, Suardipa, & Sintorini, 2013). Rainy days and rainfall caused much so that the chance of

breeding place of mosquitoes breeding will increase, causing the mosquito population increases so will the risk

of dengue transmission (Chakravarti & Kumaria, 2005). The disease is transmitted by Aedes spp mosquitoes

that carry the dengue virus, of the family flaviviridae from. There are four types of dengue viruses that can

cause dengue disease that DEN-1, DEN-2, DEN-3 and DEN-4 (Surabaya City Health Department, 2012;

Chakravarti & Kumaria, 2005). Dengue virus enters the body through the bite of the mosquito vector Aedes

aegypti and Aedes albopictus females.

Surabaya city is a dengue endemic areas in East Java Province, Indonesia has a climate factors mean air

temperature 27.85°C with a mean of 75.75% air humidity (The Meteorology, Climatology, and Geophysics

Agency [BMKG], 2012). Thus, climatic conditions (temperature and humidity) will support the increased

density of the mosquito population and the subsequent impact on the transmission and spread of dengue fever,

changes in ecological and socio-demographic factors play an important role in the improvement and expansion

of endemic dengue disease (WHO, 2013; Chakravarti & Kumaria, 2005; Brisbois & Ali, 2010). The high status

of entomological (vector) DHF as House Index (HI), Container Index (CI), Breteau Index (BI), and Resting

Index (RI), supported by heavy rainfall also can lead to outbreaks (Chakravarti & Kumaria, 2005; Wongkoon

et al., 2006). Status of the other vectors, can be seen through Ovitrap Index (OI) and Pupa Index (PI), also plays

a role in the evaluation of post-dengue vector control (Chakravarti & Kumaria, 2005; Wongkoon et al., 2006;

Satoto et al., 2013). This study was conducted to determine the relationship between the picture and climatic

conditions (air temperature, relative humidity, rainfall, number of days rain, and duration of solar radiation)

with the incidence rate of dengue fever in the city of Surabaya in 2010-2012.

Methods

This study is a quantitative and descriptive study using ecological study design. This study can determine

the relationship between climatic conditions (air temperature, relative humidity, rainfall, number of days rain

and duration of solar radiation), and the incidence (rate of occurrence) of dengue in the city of Surabaya

2010-2012. Research location is in the city of Surabaya, East Java, with 31 sub-districts. The location of the

study site made with due consideration to all districts in the region are endemic. The timing of the data

collection was done during the months of May to October 2013. The population in this study was all recorded

incidence of dengue in Surabaya City Health Department in 2010-2012. Observations were made on the total

population in endemic areas of the city of Surabaya. Secondary data collection form and the incidence of

dengue larvae-free rate are taken from Surabaya city health office in 2010-2012. Data climatic conditions (air

temperature, relative humidity, rainfall number of days rain, and duration of solar radiation) were obtained from

the Center for Meteorology, Climatology and Geophysics (BMKG) Surabaya Perak Station last three years.

The data were analyzed to provide information free larvae number and incidence rate of dengue and climatic

conditions in the city of Surabaya in 2010-2012 collected. Stages of analysis conducted univariate and bivariate

analysis. Univariate analysis is useful to illustrate the distribution of dengue incidence rate fluctuations as well

as an overview of climatic factors (air temperature, relative humidity, rainfall number of days rain, and duration

of solar radiation) in 2010-2012. Bivariate analysis using regression-correlation test, conducted to see the

relationship between the independent variable is the dependent variable climatic conditions, namely free

numbers larvae and incidence of dengue in the city of Surabaya in 2010-2012. To determine the


1045

degree/closeness of the relationship and the direction of the relationship between two numerical variables used

correlation analysis. The numerical relationship between two variables can be patterned positive or negative.

Positive relationship occurs when the increase of the variable followed by an increase of other variables. While

the negative relationship occurs when one variable increment followed by a decrease in another variable.

Results

Distribution of Dengue

In 2010, the distribution of the incidence of dengue in the city of Surabaya showed that 50% more

sub-districts have dengue incidence or Incidence Rate (IR) ≥ 100 per 100,000. In 2010, 50% of districts have IR

≥ 100 per 100,000, while in 2011 and 2012, 50% of districts in Surabaya have IR < 50 per 100,000. The mortality

rate or Case Fatality Rate (CFR) due to dengue in Surabaya in 2010 was 0.38%, whereas in 2011 and 2012

respectively 0.69% and 0.64%. Based on national targets CFR Ministry of Health of the Republic of Indonesia

DHF is 1%. Similarly, the larvae-free number in Surabaya in general still does not meet expectations or target of

the Ministry of Health of the Republic of Indonesia, which is 95%. Larvae-Free Number (LFN) mean for the city

of Surabaya for three years ranging from 80.24%-85.76%.

DHF data that are in the city of Surabaya in the period 2010-2012 are available in Table 1.

Table 1

Recapitulation Data Dengue Patients in the City of Surabaya Region

Month Year 2010 Year 2011 Year 2012

Patients deaths Deaths Patients deaths Deaths Patients deaths Deaths

January 128 0 138 0 90 0

February 242 2 132 0 105 2

March 477 4 133 0 173 0

April 490 3 110 4 131 2

May 475 4 126 2 196 2

June 515 0 146 1 118 1

July 360 0 76 0 70 0

August 209 0 46 0 48 0

September 94 0 28 0 45 0

October 119 0 28 0 46 0

November 131 0 22 0 36 0

December 139 0 21 0 33 0

Total 3,379 13 1,008 7 1,091 7

Note. Sources : City Health Office Surabaya (2013).

Climate Conditions

Climate change can affect the macro and micro spreader an infectious diseases, including the mosquito

vector borne diseases. Increased humidity and rainfall is directly proportional to the increase in mosquito density,

while the temperature has the optimum limit for mosquito breeding between 25-27°C. Climatic conditions have a

significant effect on the risk of transmission of vector-borne diseases such as malaria and DHF (WHO, 2013;

Brisbois & Ali, 2010).

Realtionship Between Temperatures and the Incidence of DHF

Climate can influence the pattern of infections caused by either viral disease agents, bacteria or parasites,


1046

and vector is sensitive to temperature, humidity, and other ambient environmental conditions. In addition, the

WHO also stated that mosquito-borne diseases such as dengue fever associated with warm weather conditions

(WHO, 2013). The mean temperature in Surabaya city from 2010 to 2012: 30.2°C (in October 2011) and 30.2°C

-30.4°C (October to November 2012), while the lowest in July 2012 (Surabaya City Health Department, 2012).

Research carried down the Glenn and Sia (2008), Metro Manila Philippines period 1996-2005 concluded that

there was no significant correlation between the incidence of dengue temperature, as well as the results of the

study Amah et al. (2010) in Serang district, Banten, West Java Indonesia. There is no significant relationship

between the temperature in the incidence of dengue fever. Although the average monthly temperatures range

between 30.2°C, an optimal temperature for breeding Aedes aegypti (21°C-31°C), but although the temperature

in the city of Surabaya is the optimal temperature to increase mosquito populations, but not enough to infect DHF

(WHO, 2013; Surabaya City Health Department, 2012; Halide & Ridd, 2008; Foley, Klein, Kim, Wilkerson, &

Rueda, 2008) .

Relationship Between Humidity and the Incidence of DHF

From the secondary data obtained from BMKG, looks humidity in October 2011 (63.2%) is the lowest

humidity, while the highest humidity in April 2010 (80%) (BMKG Surabaya, 2012). Such moisture conditions

make the ongoing proliferation of mosquitoes. Increased humidity and rainfall is directly proportional to the

increase in the density of mosquitoes. Humidity conditions in Surabaya have averaged above 60%, which are

optimal for breeding mosquitoes, primarily Aedes aegypti. In addition to the effect on the flies fly mosquito,

higher humidity makes the mosquitoes become more active and frequent blood sucking. Often Aedes mosquito,

Aedes aegypti and Aedes albopictus females looking for food by sucking the blood of humans, is used to continue

the process of reproduction. This condition increases the transmission and spread of dengue in the region

(Chakravarti & Kumaria, 2005).

Rainfall and the Incidence of DHF

Rainy days and high rainfall in Surabaya, the number of rainy days at 28 days a month. Events differ in the

dry season, where low rainfall and number of rainy days can reach zero (Surabaya City Health Department, 2012).

Rainfall has a direct influence on the presence of the Aedes aegypti mosquito breeding places. The population of

Aedes aegypti mosquito breeding depends on the place. High rainfall and lasts for a long time can lead to flooding

so as to eliminate the breeding places of Aedes aegypti mosquito that usually live in fresh water. As a result the

number of mosquito breeding will be reduced so that the mosquito population will be reduced (Surabaya City

Health Department, 2012; Wongkoon et al., 2006; Halide & Ridd, 2008). However, if the rainfall is small and for

a long time will increase the breeding places of mosquitoes and mosquito populations increase (Halide & Ridd,

2008). As with other vector based diseases, dengue fever showed a pattern related to rainfall due to climate

mainly affect the spread of vector mosquitoes and the possibility of transmitting the virus from one human to

another human (Halide & Ridd, 2008; Foley et al., 2008). Rainfall is dependent on the number of days of rain, the

highest rainfalls are on December 20 and January 10, 2012 (28 days), while the lowest in August to September

2011 and July to September 2012, which does not occur during the rainy months.

Duration of Solar Radiation With DHF Incidence

The intensity or duration of solar radiation is very influential with the temperature and humidity around it.

Long exposures of the sun, is also associated with season and sunlight affect the growth of mosquito larvae

(Wongkoon et al., 2006). Therefore, the mosquito Aedes aegypti is generally liked the shade, in the city of


1047

Surabaya, the old high solar irradiation in September and October, this condition causes rainfall and rainy days

decreased (Halide & Ridd, 2008; Satoto et al., 2013). At the same time an increase in temperature and decrease in

relative humidity (Wongkoon et al., 2006; Halide & Ridd, 2008). Even though the air temperature is high in

Surabaya, but the humidity is not much change. This is indicated by the condition of 60% humidity in Surabaya,

allowing Aedes aegypti and Aedes albopictus is able to reproduce well (Satoto et al., 2013). Mosquitoes Aedes

aegypti have a habit of resting in a dark place and protected from the sun, so are in the habit of laying eggs (WHO,

2013; Wongkoon et al., 2006). There is a relationship between the seasons and the sun shines longer, the long dry

season the sun shines longer than during the rainy season. The duration of sunshine makes more rapid growth of

mosquito larvae and the activity of female mosquitoes seek blood for humans (anthropophilic) will increase.

Activities of female mosquitoes in search of food related to sustain reproduction (Wongkoon et al., 2006; Foley et

al., 2008).

Relationship Between Climate and Vector Conditions

In the period 2010-2012, the overall larvae free number in the city of Surabaya is still below the expected

target of 95%. When viewed by region districts only one sub-district in 2011 and two districts in 2012 which have

a Free Flick rate > 95%. The low larvae free number indicates that many mosquito breeding places in the

community (Satoto et al., 2013; Somsak, Yanyong, & Ritting, 2010; Foley et al., 2008). The analysis showed a

significant association with several components larvae free number, climate among air humidity, rainfall, number

of rainy days, and duration of solar radiation, unless the air temperature throughout the year showed that the

optimum value for mosquito breeding. Analysis to determine the relationship of climate larvae free number with

results obtained following analysis (see Table 2).

Table 2 Results of Analysis Larvae Free Number Relationship With Climate Conditions in the City of Surabaya in 2010-2012

Climate Corellation of larvae free number-climate

Air temperature r = 0.370 p = 0.082

Humidity r = -0.687 p = 0.000*

Rainfall r = -0.521 p = 0.011*

Number of days rain r = -0.665 p = 0.001*

Duration of solar radiation r = 0.649 p = 0.001*

Note. * Significant at 0.05.

The results of the above analysis show four variables associated with larvae free number, i.e., humidity,

rainfall, number of rainy days, and duration of radiation. Three variables showed a negative correlation (relative

humidity, rainfall, and number of rainy days) which means that the higher the value of these three variables, the

lower the value of larvae free number. Duration of solar radiation has a positive correlation with the larvae free

number (Somsak et al., 2010; Foley et al., 2008), which means the longer the daily solar radiation, the higher the

value larvae free number.

Analysis of Incidence Rate by the relationship larvae free number district area showed the value of r =

-0.268 and p = 0.010 (p < 0.05). Which mean that there is a negative relationship between Incidence Rate DHF

with the mean larvae free number.

The results of this analysis, showed a lower value larvae free number than Incidence DHF. According to the


1048

facts (WHO, 2013), to prevent the transmission of dengue depends on measures of mosquito vector control, one

effective way is to eliminate or prevent the breeding places of Aedes aegypti and Aedes albopictus in order to

break the life cycle of the mosquito as a vector. When you should use a water reservoir (container), the container

could be pursued by the unwelcome larvae or mosquito larvae Aedes aegypti and Aedes albopictus as the use of

landfill smooth-walled does not absorb water and light for example ceramics (Chakravarti & Kumaria, 2005).

Measures 3 M (Drain, Close, and Bury): landfill drain action at least once a week to abolish the mosquito

population, closing the landfill to prevent mosquito infestation and used as mosquito breeding and hoarding

landfill that does not want to eliminate mosquito breeding places (Brisbois & Ali, 2010; Foley et al., 2008).

Figure 1. Relationship larvae free number value incidence rate district area with dengue in the city of Surabaya in 2010-2012. Source: City Health Office of Surabaya (the data is processed).

Conclusions

Based on the results and pembahsan research, it can be concluded that climatic factors, such as humidity

than temperature, rainfall, solar radiation and the old city of Surabaya in support of dengue vector mosquito

breeding. Total incidence of DHF showed a declining trend over the last three years. DHF incidence rate

associated with air humidity, rainfall, and number of rainy days. Index larvae (Larvae Free Number, HI, CI, BI,

and OI) indicates that the presence of dengue vectors quite high in the city of Surabaya is recommended for the

Department of Public Health and the City of Surabaya to improve the prevention and eradication of mosquito

breeding places, in order to decide DHF vector mosquito life cycle.

References Amah, M. E. V., Rina, N. F., & Ririn, W. A. (2010, June 1). Climate factors and the incidence rate of dengue in Serang. Makara

Health Series, 14, 31-38. BMKG (The Meteorology, Climatology, and Geophysics Agency). (2012). Monitoring of temperature, humidity, rainfall, and

rainy day in Perak station Surabaya region. Surabaya City. Brisbois, B. W., & Ali, S. H. (2010). Climate change, vector-borne disease and interdisciplinary research: Social science

perspectives on an environment and health controversy. Ecohealth, 7(4), 425-438. Chakravarti, A., & Kumaria, R. (2005). Eco-epidemiological analysis of dengue infection during an outbreak of dengue fever,

India. Virology Journal, 2, 32. Foley, Klein, T. A., Kim, H. C., Wilkerson, R. C., & Rueda, L. M. (2008). The geographic distribution and ecology of Aedes sp

potential in Republic of Korea. Journal of Entomology, 46, 680-692. Glenn, L., & Sia, S. (2008). Correlation of climatic factor and dengue incidence in Metro Manila, Philippines. AMBIO: A Journal

0

100

200

300

400

500

600

50 60 70 80 90 100

Inci

dec

e R

ate

(per

100

.000

)

larvae free number (%)


1049

of the Human Environment, 37(4), 292-294. Halide, H., & Ridd, P. (2008). A predictive models for dengue hemorrhagic fever epidemics. International Journal of

Environmental Health, 18(4), 253-265. Satoto, T. B. T., Umniyati S. R., Suardipa, A., & Sintorini, M. M. (2013). Effects of temperature, relative humidity, and DEN-2

virus infection transovarially on viability of Aedes aegypti. Community Health, National Public Health Journal, 7(7), 331-336.

Somsak, S., Yanyong, I., & Ritting, J. (2010). Impact of climate change on epidemic DHF. Research Journal of Applied Sciences, 5(4), 260-262.

Surabaya City Health Department. (2012). Annual report on surveilans activities Surabaya. Surabaya City. Wongkoon, S., Jaroensutasinee, M., Jaroensutasinee, K., Preechapon, W., & Chumkiew, S. (2006). Larval occurence and climate

factors affecting DHF incidence in Samui islands, Thailand. International Journal of Biological and Life Sciences, 2(2), 107-112.

World Health Organization (WHO). (2013). Dengue and severe dengue. Media Center, September 2013.


Farmer Associations and Rural Development in Taiwan

Kun-Jung Liao

National Chung Cheng University, Chiayi, Taiwan

This paper explores a unique Public-Private Partnership (PPP) formed by the government and Taiwanese Farmer

Associations. Particularly, it will investigate a pattern of the PPP that has successfully promoted rural development

and agricultural modernization in Taiwan since the 1950s. TFA’s (Taiwanese Farmer Associations) establishment

inherently came from Japanese Cooperatives before World War II. The Performances of those farmer organizations

are combinations of economic, social, and educational synergies. The rural development experiences in Taiwan

demonstrate that success of rural modernization is carried out by a special PPP. First, this paper discusses the

establishment and development of farmer cooperative organizations in East Asian societies. Particularly, it focuses

on collaborative mold and process in which both the government and TFA have been extensively involved. A

specific cooperative apparatus between the government and TFA functioning and operating as a perfect PPP has

been formed under administrative guidance of the state. Thirdly, this paper looks at input and various supports in

financial and policy perspectives by the public sector. Fourthly, the paper discusses legal framework, administrative

apparatus, and governance pattern for TFA. Fifthly, the significant findings of paper illustrate that a specific PPP

successfully involving in rural modernization in Taiwan is derived from the state’ guidance that properly regulates

a collaboration between the government and TFA. The so-called East Asian model of PPP, as revealing in

agricultural modernization and rural community development in Taiwan, may become valuable experiences for

most of developing countries.

Keywords: public-private partnership, TFA (Taiwanese Farmer Associations), rural development, agricultural

cooperative law, farmer association law

This paper, based on a PPP (Public-Private Partnership) approach, investigates Taiwanese Farmer

Associations1 (hereafter TFA) involving in rural development in Taiwan. There are similar agricultural

cooperative organizations in the East Asian region. The Japanese government introduced the format of German

cooperative society into Japan in the late 19th century. Later, Japan built similar farmer cooperative

organizations in Korea and Taiwan in order to war-time economy. In fact, small-scale farmers in the East Asian

societies generally organize their own cooperative organizations to get a better position in the market economy.

Japan Agricultural Cooperatives (JAs) are a kind of farmer organizations regulated by the Agricultural

Cooperative Law. JAs are involved in various businesses and services, including marketing, extensions, and

Corresponding author: Kun-Jung Liao, professor, Department of Political Science, Research Center for Public Policy and

Management, National Chung Cheng University; research fields: public policy, political economy, Agricultural Cooperatives in East Asia. E-mail: [email protected]. 1 There are some similar farmer organizations in East Asia. Although, there are different English translation, the formation, function, missions of organization are similar each other. Such as, Japanese Agricultural Cooperative Society (JA), Agricultural Cooperatives (NonghHyup in Korean, NH) in South Korea, and Farmer Cooperative Society in China, Taiwan Farmer Associations (TFA) in Taiwan.

D DAVID PUBLISHING

FARMER ASSOCIATIONS AND RURAL DEVELOPMENT IN TAIWAN

1051

insurance services, etc., under a mutual assistance among members. JAs have been making great contributions

to the agricultural industry and the modernization of rural areas through their cooperative mechanism.

TFA were basically developed from Japanese experiences of cooperative societies prior to World War II.

As the Chinese government moved to Taiwan, it reformed those cooperative organizations for economic, social,

and political control during the post World War II. Nowadays, those farmer organizations play a significant

policy agent implementing the various agricultural policies for the government in Taiwan. This paper based on

PPP approach tries to examine a collaborative pattern between the government and TFA that has successfully

promoted rural development and modernization since the 1950s in Taiwan.

For development policy goal, the government has supported and built TFA to be able to carry out public

programs. Their cooperative model not only reveals significant PPP, but also indicates a remarkable civic

engagement in public policy implementation. This is an interesting case for a third sector2 that involves in

public service delivery.

Agricultural Cooperative Organizations in East Asia

TFA as in Korea and Japan have played a significant role in rural development since 1950s. Such an

institutional arrangement largely improves the agricultural production, quality of life, and welfare in the rural

communities. Many of these services, usually provided by the governments, have been carried out by TFA.

However, Taiwan, Korea, and Japan have similar experiences that agricultural cooperative organizations under

government backing carry out rural development programs.

In Japan, farmer organizations were initially formed by volunteering during the late 20th century. Farmers

took collective actions to strengthen their bargaining power in market economy through organizational power.

Particularly, small farmers gather small amount of products into a large volume to get a bargaining power and

reduce transaction cost in the market. Later, they were forced to transfer into government control. As a

consequence, all farmers were obliged to join the organizations based on different prefectural governments to

support the wartime economy (Nonaka, 2006, p. 1). During the post World War II, almost all farm households

joined the JAs under a regulation of the Agricultural Cooperative Society Act promulgated in 1947. Each

village had one farmer cooperative that provided all agricultural production-related services for farm

households. At this time, the Japanese farmer cooperatives at prefectural and national levels ran many

businesses such as credit, insurance, purchasing, marketing, and extension services. JAs have performed great

functions related to agricultural policies such as governmental loan, control of rice supply and price (Nonaka,

2006, p. 3). JA provides guidance on various agricultural production services, including technologies, banking,

marketing, and farm management, to individual members to help them operate their farms more efficiently.

Agriculture in Korea can be characterized with a small family farm structure. The average farm size was

as small as 1.48 hectares in 2004. Following the promulgation of Agricultural Cooperative Law in 1957,

Korean agricultural cooperative organizations (NonghHyup, NH in Korean), were established in 1958 to

engage in the supply and marketing business of farmers. They consist of 2.4 million member farmers and about

1,220 member cooperatives and one apex federation, the NACF (National Agricultural Cooperatives

2 In this paper, agricultural cooperative societies existing in East Asia societies are defined as a kind of third-sector organizations. According to Samiul Hasan, Mark Lyons, and Jenny Onyx, the Third Sector is composed of that vast array of organizations that are not part of government and not operated to profit their owners. Organizations that make up the third sector are the product of private collective action to provide goods or services for their members or for others (Hasan & Onyx, 2008, p. 2).


1052

Federation). NHs in Korea were founded as three-tiered system with village-level, city-level, and NACF at the

national level.

Korean NHs as Japan and Taiwan, have experienced several stages of organizational transformation. In the

1960s, Korean NHs introduced mutual credit services that eliminated the practice of usury, notorious private

high interest rate loans in rural areas. These organizations provided farmers with capital for their farm

enterprises. In the 1970s, they started cooperative chain store business which greatly contributed to stabilizing

commodity prices in the country. In the 1980s, they promoted farm mechanization programs as well as crop

and breed improvement that largely upgraded farm productivity and increase farm household income. Those

efforts cooperatives made have successfully promoted agricultural modernization and rural community

development. In the early 2000s, Korean NH played a leading role to implement the New Rural Community

Campaign to revitalize the agricultural industry and rural community. NHs have also launched a campaign of

“Love Our Farming Villages” for making villages more vibrant places to live. NHs have made continuous

institutional reform and innovation to overcome challenges from the liberalization of agricultural sector in

Korea. In fact, farmer cooperatives in Japan, Korea, and Taiwan, with similar governance and close relations

with governments, all play an important part in agricultural modernization and development of rural

community. The distinctive collaborations between the farmer organizations and governments in the rural

development process indicate a significant PPP in East Asia. As the Table 1 shows, there are many differences

and similarities in terms of organization governance and their relations to governments.

Table 1

Similarities and Differences of Agricultural Cooperative Organizations in East Asia Category Japan Korean Taiwan

No. of members 9.03 million 2.4 million 1.8 million

Dual membership Members & associate members Members & associate members Members & associate members

No. of member cooperatives 550 1,220 259 Organization establishment based on territory

Three-tiers: Village-level, prefecture-level, national level

Two-tiers village-level National level: NACF

Three-tiers: Village-level, county-level, province-level

Organization missions

Multi-function and purpose: 1. extension 2. marketing 3. banking 4. insurance



Legal framework Agricultural Cooperative Law, 1947

Agricultural Cooperative Law Farmer Association Law

Government Regulatory agency

Ministry of Agriculture Ministry of Agriculture Commission of Agriculture(cabinet level)

Operation territory On a restricted territory On a restricted territory On a restricted territory

The Nature of Partnership and Newly Applied to Policy Issues

PPP can be defined as an arrangement whereby private parties participate in, or provide support for, the

provision of infrastructure. Conventionally, a PPP project results in a contract for a private entity to deliver

public infrastructure-based services (Grimsey & Lewis, 2004, p. 2). According to Grimsey and Lewis, a

broader framework of PPP encompasses both “policy-level” partnership and “project-level” partnership. The

former coordinates public sector and private sector inputs into decision-making about the design and

formulation of policy initiatives. For example, urban transportation, subway system, or industrial development

zone planning have been practiced in all world of many countries in past decades. No matter how PPP is


1053

defined, conventional PPP is almost constrained as infrastructure. They are largely applied to economic areas

like highways, bridges, tunnels, and so on (Grimsey & Lewis, 2004, p. 7). Particularly, it is always linked with

Build Operate Transfer, BOT/(Build Own Operate, BOO). Actually, there are many different types of PPPs and

the models applied differ from country to country. The PPP concept is evolving in different issues in which the

arrangements and applications are being implemented. In other words, PPP should go beyond conventional

arrangement and application. It may be formed as an institutional arrangement that combines resources of

public and private sectors and be used to deal with national and social development affairs. This paper tries to

extend and use ideas of PPP in dealing with collaboration between the government and farmer organization in

rural development process.

It seems the fact that Linder (1999, p. 35) defined PPP as a rubric for describing cooperative ventures

between the state and private business. According to Linder, PPP should be more comprehensive and inclusive

for widely applied in various new issues emerging since 2000s. The concept of PPP was usually limited to use

in hardware-related public projects. Nevertheless, PPP should be extended to use in various policy issues,

including agriculture, social welfare, the aged medicare, cultural, and creative industrial policy, etc. For most

developing countries, governments have been the principal provider of infrastructure. Faced with effectiveness

and efficiency in terms of financial input, construction projects implemented by governments have turned to the

private sector. There have been so many successful projects that are implemented by specific PPP process and

mold. However, few academic works discuss a particular type of institutional arrangement involving public

agencies and civic organizations that may be able to co-work development of rural community.

Governance of PPP in Rural Development in Taiwan

Taiwan has faced a small farming problem as Japan and Korea. Its average farm scale was as small as 1.4

hectares per farmer during decades. As one of small farming societies in East Asia, farmers in Taiwan has

organized their first cooperative organization in order to strengthen their bargaining power in market economy

since 1899. Later, these organizations were forced to convert into government agency in early 1930s for

Japanese government’s food control. The post World War II, they came through several stages of

organizational transformation during the past decades. This paper focuses on Taiwanese experiences that

suggest a distinctive PPP between the government and farmer cooperative organizations in the issue of rural

development. It is essentially characterized with institutional infrastructure that corresponds to what

institutional economics calls the institutional environment (Williamson, 1975). This partnership includes formal

and informal institutional arrangement that shape economic behavior of TFA and decision-making process of

the government (North, 1990; Williamson, 1985). It governs bureaucratic behavior, agriculture policies, public

financing, along with formal regulation and informal government-business networks that institutionally

transformed into a supportive forces to promote rural development.

Not all kinds of PPPs have been successful in all of societies. PPP built in the government and TFA

showed a very noteworthy establishment in Taiwan. As Figure 1 shows, the government supports TFA

administratively and politically. General manager election of TFA is legally regulated by Farmer Association

Law and is politically controlled by the government. TFA has four policy-oriented functions, i.e., supply, farm

extension, financing, and insurance that form four major departments to carry out their business and public

programs commissioned by the government. It becomes a multi-function in terms of service provision for

farmer production and marketing. Its major roles can be concluded as follows:


1054

(1) It acts as a policy agent who helps the government to maintain a proper food policy and implement

agricultural and social welfare programs;

(2) It provides farmers with public goods such as information, technologies, and resources sharing for

production, and helps farmers to achieve agricultural modernization through provision of cultivating knowledge,

collecting marketing, banking, and insurance;

(3) It holds political power and retains political stability in rural areas in Taiwan.

As described previously, TFA, although it carries out some public policies commissioned by the

government, is neither a governmental agency nor a business organization. However, it forms through farmers’

voluntary action regulated by Farmer Associations Law and provides abundant economic, social, and

educational public goods. As Figure 1 shows, TFA’s multi-functions are achieved through four departments,

including transportation and marketing, education extension, banking, and insurance departments. Each

department has its unique missions and goals, but they support each other under service-oriented guidance

regulated by a legal framework and sponsored by the government.

Figure 1. PPP governance of rural development in Taiwan.

Government

Taiwan Farmer Associations

Credit Department

Farm Extension Department

Insurance Department

Supply Department

Rural development

Policy input

Policy output


1055

Economic Function

In general, the agricultural sector is weak in developing countries. Farmers in Taiwan averagely own small

piece of land for farming. It is difficult to carry out the way of modernized cultivation. Apparently, production

cost for small farms is high, and productivity is low. In this respect, TFA, as a client of the government takes a

complementary part of the public-sector agencies to help farmers improve productivity through their

cooperative apparatus. Since TFA is a civil organization, its cooperative device and governance have penetrated

into local communities and established close and trustful relations with farmers and their families. Under

administrative guidance of government, it provides all kinds of services, such as agricultural technological

services, supply handling and purchasing, selling commodities, rice grounding, which forms well organized

service networks from living to production of farm households.

As Table 2 shows, TFA helps farmers to improve cultivation skills, and teaches farmers how to use

modernized farm tools. It also helps farmers how to properly use pesticides and how to use new kinds of crop

seeds provided by government-sponsored agricultural high-tech laboratory. Those technical assistances and

services have effectively upgraded agricultural production capabilities in rural communities; consequently, it

has raised income distribution of farm villages which is indispensable for rural modernization in Taiwan since

the 1950s. As farmers use more modernized skills, tools, and seeds provided through TFA networks, the

agricultural sector was highly grown. In addition, TFA also plays a role of local banking which provides loans

for farmers. TFA as farmer cooperative organizations, also provide a warehousing business and product

processing services for its small-farm members. Those production-related services substantially lower the cost

of farming production, and upgrade productivity. For example, TFA provides warehousing services for rice,

worth an average of 45 million NT (New Taiwan Dollar) dollars from 1991 to 2002, and 15 million NT dollars

from 1995 to 2002 for frozen warehousing services.

Most significant is the financial services. TFA, with credit department, provides farmers with various

agricultural loans that are crucial for agricultural production. There are three types of loans, including unified

loans, project loans, and agricultural development loans. In short, TFA’s economic functions are operated

through agricultural extension, banking services, transportation and marketing, supply of tools, and insurance.

Those services enhance the agricultural policy implementation of the government and essentially improve

productivity of the agricultural sector in general. FAT has significantly acted as an economic policy agent and

substantially fostered rural development, consequently retaining political stability in rural areas.

Social Function

Except economic-respect services for improvement of agricultural production capability, TFA also provides

social-respect services in order to improve the quality of life in rural areas in Taiwan. Farmers in general are

low-income and less educated classes. TFA under support of government provides various social services, such

as family planning, financial management, recreations, and leadership training through its organizational

network in order to lead them from underdeveloped into modernized society. As Table 2 and Table 4 show, TFA

provides kindergarten and nursery services which make women in rural communities to be able to join farm

production, consequently increases production capacity to a large extent. In addition, TFA also provides farmers

with second-skill training programs averagely up to 1,030 classes and 39,133 students from 1991 to 2002. In

addition, TFA also provides low-income farmer families with scholarships averagely amounting to 90 million

NT dollars and benefiting 32,809 students from 1991 to 2002, which substantially upgrades literacy of poor


1056

families in rural areas. One of the most valuable services is writing service provision which is greatly helpful for

less-educated farmers. TFA offers average 981,389 case services from 1991 to 2002. Table 4 demonstrates that

TFA provides home economic extension to farmers. Its total expenses, including personnel and operation has up

to 1,026 million NT dollars. Those social welfare services as effective as economic services are valuable for

modernization in rural areas. Essentially, the government should be responsible for provision of those social

services via education, social welfare policies. However, political institutions are not so as responsive as NGOs

(Non-governmental organizations) in terms of service delivery efficiency.

Table 2

Social Services in Rural Areas Unit: Classes, Persons, NT Thousand, Cases

Year Kindergarten Tech-Training services Scholarship Writing services

Classes Children Classes Persons Amounts Persons Cases

1991 1,398 48,186 626 21,555 31,086 22,152 5,788,896

1992 4,277 46,162 939 30,584 39,786 25,492 3,274,978

1993 989 32,947 635 23,048 181,645 26,963 297,838

1994 960 32,318 757 37,778 151,123 28,756 367,402

1995 937 31,641 736 26,263 159,535 34,120 369,059

1996 919 30,647 905 38,750 62,670 35,854 278,956

1997 849 28,038 977 56,215 61,298 38,586 306,844

1998 764 24,364 1,589 49,378 154,993 39,447 223,443

1999 701 21,703 1,448 46,659 67,583 40,352 201,987

2000 592 18,880 1,564 50,570 67,157 40,872 236,403

2001 787 24,352 783 44,391 68,443 35,363 212,586

2002 728 20,471 1,395 44,408 40,416 25,747 228,280

2003 472 13,650 1,239 35,543 32,598 19,466 227,752

2004 453 12,113 1,686 47,830 147,840 33,157 196,446

2005 477 13,933 3,839 79,379 208,636 40,114 181,922

2006 354 8,657 1,349 36,235 270,943 60,424 190,497

2007 485 11,394 1,215 34,763 344,909 63,745 138,085

2008 522 11,044 1,117 30,704 324,376 57,837 135,074

2009 381 7,412 1,485 38,526 373,772 64,398 126,168

Average 852.25 21,895.6 1,214.2 38,628.95 139,440.45 36,642.25 649,130.8

Note. Sources: Taiwan Farmer Associations Yearbook (2010, pp. 7-8).

TFA with social capital has extensive networks incorporated in bureaucracy and significantly plays a

development policy agent. Since TFA has been working together with the government on co-production of

agricultural sector, it has become a policy-patron of the government. Consequently, TFA also plays a crucial

political stabilizer in rural areas. Ruling party and political elite could effectively control rural sector and

implemented modernization projects through TFA networks. Stabilization is important for modernization

process in most developing countries. Lack of political stability will substantially harm development efforts

promoted by governments. Political relations between TFA and the government in Taiwan work as

patron-client relations which the government protects the organizational interests and members of TFA

politically support public policies and ruling legitimacy of KuoMingTang (KMT, Nationalist Party). It reveals

political partnership which is considerably beneficial to rural development in Taiwan. Political stability in rural

communities reinforce by TFA’s economic and social service supply; consequently, it leads to effectiveness of

development policy carried out by the government.


1057

Educational Function

Table 2 shows that TFA provides various social education services, including kindergarten, tech-training,

scholarship, and writing services. Those education programs containing knowledge of food, clothing, housing,

transportation, health and sanitation, and recreation are generally insufficient in rural communities. Its total

operational expenses are 649,130 thousand NT dollars from 1991 to 2009. As growth of industrialization in

Taiwan, a large number of labors move to urban areas. Consequently, human resources in rural areas become

aged. As the social-economic environment has dramatically changed from traditional farming to commerce and

industry, farmers must have sufficient knowledge of modern business management to low cost and increase

productivity. Table 3 indicates that TFA also provides farm extension education services for farmers

themselves. TFA, under support by the government, plays a role to help farmers upgrade their production and

management skills. Most significantly, TFA teaches those aged and less education farmers to run farms with

modern business management skill for improving production value. Its total operational expenses are 601,691

thousand NT dollars from 1991 to 2009.

Table 3 Farm Extension Services Unit: Classes, Persons, NT Thousand, Cases

Year Villages involved Production & marketing classes

Demo houses Operational expenses Classes Students

1991 6,303 25,645 428,458 12,061 679,648 1992 6,300 23,620 467,753 834,837 739,085 1993 4,878 14,974 267,921 9,760 756,519 1994 4,876 13,597 263,821 23,965 834,886 1995 6,047 16,130 291,414 11,234 939,542 1996 12,346 19,817 373,865 19,344 1,022,951 1997 12,733 22,453 424,882 20,955 1,173,313 1998 6,869 15,275 301,757 30,920 906,403 1999 6,586 14,487 296,092 18,264 834,350 2000 6,373 9,855 202,023 16,693 735,302 2001 7,057 23,047 435,720 22,860 599,705 2002 5,439 7,063 154,359 7,223 378,230 2003 6,909 7,902 163,056 5,825 368,217 2004 7,474 8,570 170,982 7,172 361,603 2005 6,694 7,961 166,166 5,549 297,431 2006 6,922 8,739 177,313 4,953 339,405 2007 7,038 8,459 179,053 5,632 349,057 2008 6,721 8,027 172,472 5,713 365,832 2009 6,693 7,487 161,774 5,325 352,360

Average 6,712.9 13,155.4 254,944.05 53,414.25 601,691.95

Note. Sources: Taiwan Farmers’ Associations Yearbook (2010, pp. 9-10).

As Table 4 shows, 4-H extension3 services are provided for training young groups in order to promote

3 4-H-Club in the United States is a youth organization administered by the National Institute of Food and Agriculture of the United States Department of Agriculture (USDA), with the mission of “engaging youth to reach their fullest potential while advancing the field of youth development”. The name represents four personal development areas of focus for the organization: head, heart, hands, and health. The organization has over 6.5 million members in the United States, from ages five to nineteen, in approximately 90,000 clubs. Clubs and related organizations now exist in many other countries as well; the organization and administration varies from country to country. TFA in Taiwan learned 4-H-Club from American rural development advisor, Dr. Anderson, and developed in Taiwan since the mid-1950s.


1058

modernization of human resources in rural communities. Its total operational expenses averagely amount to

138,643 thousand NT dollars from 1991 to 2009. In addition, home economics are valuable for rural

development. Table 5 reveals that TFA provides total operational expenses in home economic extension

services averagely amounting to 134,404 thousand NT dollars from 1991 to 2009. All programs and services

carried out by TFA are financially supported by the Agricultural Council, a cabinet-level agency of Taiwan.

The successful outcomes of rural modernization in Taiwan come from an effective public-private partnership

between the government and TFA.

Table 4

4-H Extension Unit: Classes, Persons, NT Thousand, Cases

Year Villages involved 4-H-Club Volunteer

trainers Operational expenses Teams Members

1991 206,122 7,761 136,708 7,505 108,403

1992 2,283 7,383 125,060 7,644 113,495

1993 4,321 4,594 79,926 4,928 118,813

1994 4,754 4,370 84,488 5,076 128,330

1995 5,181 6,170 108,529 7,634 142,255

1996 5,181 10,789 178,872 11,537 148,604

1997 5,562 11,086 179,691 11,236 582,306

1998 5,652 5,676 110,515 7,090 758,081

1999 5,735 5,283 97,604 7,887 112,784

2000 5,733 4,437 92,127 8,159 109,180

2001 6,533 8,578 173,413 11,886 77,182

2002 4,466 3,124 66,642 4,450 54,235

2003 5,956 3,479 76,070 5,122 46,034

2004 6,383 3,436 78,935 5,421 41,248

2005 5,390 3,232 77,854 5,195 36,530

2006 5,504 3,153 84,101 6,153 44,077

2007 5,891 3,455 85,011 6,112 49,384

2008 5,495 2,997 81,700 6,344 50,823

2009 5,543 2,795 73,229 9,240 51,106

Average 15,084.25 5,089.9 99,523.75 6,930.95 138,643.5

Note. Sources: Taiwan Farmers’ Associations Yearbook (2010, pp. 9-10).

Table 5

Home Economics Extension Unit: Classes, Persons, NT Thousand, Cases

Year Villages involved Training

Volunteer trainer Operational expensesClasses Members

1991 5,653 12,199 206,025 11,702 132,584

1992 6,041 482,829 205,619 11,685 164,990

1993 4,648 7,291 135,479 7,171 168,486

1994 4,796 6,976 135,532 7,593 189,921

1995 5,812 10,629 196,326 11,937 209,904

1996 5,516 18,045 333,427 19,645 228,597

1997 6,853 155,821 236,064 22,546 215,505

1998 6,812 10,162 217,927 11,669 215,745

1999 6,942 9,113 205,938 9,699 163,993

2000 6,869 8,439 192,815 10,104 181,859


1059

(Table 5 continued)

Year Villages involved Training

Volunteer trainer Operational expensesClasses Classes

2001 6,784 15,607 350,150 21,406 127,647

2002 5,700 6,205 146,363 7,280 102,139

2003 6,668 7,225 175,756 15,234 83,793

2004 7,036 7,619 186,357 8,457 87,760

2005 6,379 7,237 177,978 8,586 64,528

2006 6,741 7,638 191,387 9,502 75,964

2007 6,876 7,729 189,343 10,052 92,854

2008 6,505 7,391 188,953 8,888 91,503

2009 6,657 7,122 180,110 9,122 90,319

Average 5,964.4 39,763.85 192,577.45 1,111.4 134,404.55

Note. Sources: Taiwan Farmers’ Associations Yearbook (2010, p. 10).

Conclusions

Rural development is really a complicated process. Development literature points out that

underdevelopment in less developed countries results from a “governance crisis” characterized with

bureaucratic obstruction, pervasive rent seeking, red tape, and corrupted politics in public institutions; as a

result, it leads to the failure of public programs in general. Modernization theorists emphasize the importance of

rational institutional arrangement and physical and human capital, including technical and financial elements

which determine success of social modernization. This paper argues that inefficient governance or incapable

public institutions are fundamentally caused by a lack of involvement of the third sector. Development action if

carried out simply by the government which controls over capital and technology may be failed as most

developing countries have experienced in the past decades. This paper proposes that rural development and

modernization of society should comprise public and private sectors all together as Taiwan, Korean, and

Japanese experiences suggest. These two sectors may work as PPP governance that bonds public sources and

organizational cooperative mechanism. In these circumstances, Taiwanese case indicates that successful PPP

plays a role as a mediating variable that bridges public and private institutions and fosters development synergy.

TFA being a policy agent plays a supplementary part in giving an impetus to rural development in this island

state. This shaping is an inherently political process that the state takes a leading role; nevertheless, the

outcome is a combination of economic, social, and educational synergies.

TFA’s participation in rural development efforts not only strengthens their advocacy role but also

represents farmers’ policy participations in rural community development. Obviously, the Third Sector is

becoming increasingly important in meeting social needs and in multiplying resources such as solidarity,

trustworthiness, and cooperativeness which are intangible policy effectiveness. Partnership characterized with

associative networks based on a unique partnership becomes mediating structures between civil society and the

state.

Rural development process in Taiwan since reveals that civil society enhances societies’ development by

developing synergistic relationships with the public sector. The synergy has two components: complementary,

referring to an extension to the capacity of government to achieve policy objectives, and partnership, referring

to the successful cooperation between the government and farmer groups that enhance the effectiveness of

development policies. The Third Sector substantially fills the social space left by the government, in terms of


1060

provision of social capital and cooperative function. Investigation of rural modernization experiences in Taiwan

may provide a theoretical contribution to linking between the practice of PPP and rural development. Through a

thorough examination of the Taiwanese experiences, this paper proposes that an effective PPP has to be

operated and practiced through a proper institutional arrangement. Particularly, effective institutional

arrangement of PPP has to be supported by the government.

In East Asia, rural modernization has been successfully achieved through an appropriate PPP that

regulates their interplays between the government and farmer organizations. Close cooperation between the

governments and farmer cooperative organizations is crucial for their success. For small farmers particularly, it

is crucial to get competitive advantage to make business successful in the marketplace (Choi, 2006, p. 15). It is

a rationale for the government to deliver public services to grass root farmer households through farmer

cooperative organizations with low transaction cost. Obviously, Korea, Japan, and Taiwan have analogous

organizational governance, similar public-private cooperative practices, and outcome alike. So-called East

Asian model of PPP in agricultural modernization and rural community development may become valuable

experience for most of developing countries.

References Bacon, D. (2002). Revitalizing civil society through social capital formation in faith based organizations: Research findings from

Northern Ireland. Proceedings from the Fifth Conference of the International Society for Third-Sector Research, July 7-11, 2002, Cape Town, South Africa.

Bifarello, M. (2002). From delegating to participation: Third sector and the state in associative networks. Proceedings from the Fifth Conference of the International Society for Third- Sector Research, July 7-11, 2002, Cape Town, South Africa.

Bonser, F. C. (Ed.). (1995). Proceedings from the Role of NGOs in Economic Development “State-of-the-Art” International Research Conference. International Institute of Administrative Sciences.

Chalmers, D. A., Vilas, C. M., Hite, K., Martin, S. B., Piester, K., & Segarra, M. (Eds.). (1997). The new politics of inequality in Latin America. Oxford: Oxford University Press.

Chambers, R. (1983). Rural development: Putting the last first. London: Longman. Choi, J. H. (2006). Agricultural cooperatives in Korea. Proceedings from 2006 FFTC-NACF International Seminar on

Agricultural Cooperatives in Asia: Innovations and Opportunities in the 21st Century, September 11-15, 2006, Seoul, Korea. Grimsey, D., & Lewis, M. K. (2007). Public private partnership. Cheltenham, UK: Edward Elgar. Hasan, S., & Onyx, J. (Eds.). (2008). Comparative third sector governance in Asia: Structure, process, and political economy.

New York: Springer. Linder, S. H. (1999). Coming to terms with the public-private partnershi. American Behavioral Scientist, 43(1), 35-51. Nonaka, A. (2006). The agricultural structure and agricultural co-ops in Japan. Proceedings from 2006 FFTC-NACF International

Seminar on Agricultural Cooperatives in Asia: Innovations and Opportunities in the 21st Century, September 11-15, 2006, Seoul, Korea.

North, D. (1990). Institutions, institutional change and economic performance. New York: Cambridge University Press. Rapley, J. (1996). Understanding development: Theory and practice in the third world. Boulde, C.O.: Lynne Rienner Publisers. Rashid, A. R. H., & Afandi, A. (1995). NGOs and development in Egypt: How much do we know, and where do we go from here?

In C. F. Bonser (Ed.), Proceedings: The Role of NGOs in Economic Development “State-of-the- Art” International Research Conference (pp. 23-28). International Institute of Administrative Sciences.

Regulska, J. (1999). NGOs and their vulnerabilities during the time of transition: The case of Poland. Voluntas, 10(1), 61-71. Taiwan Provincial Farmers Association. (2010). Farmers associations yearbook in Taiwan. Williamson, O. E. (1975). Market and Hierarchies. New York: Free Press.


The Assessment of the Impact of an Aging Population of China

on the Country’s Economy

Inna Stecenko

Science of Baltic International Academy, Riga, Latvia

Latvian Academy of Sciences, Riga, Latvia

In the article, the author on the basis of the analysis of the structure of the population of the People’s Republic of

China (PRC) is making an attempt to identify the influence of increasing number of people over 65 years on the

economic situation in the state. The introduction of reform of pension system of China is related to the additional

expenses of the state. Basing on the method of pair correlation, the author shows that with increase of percentage of

the aging population of PRC, the foreign exchange reserves of the state are increased; it is evident that the state

forms the financial reserves for the pension fund of the country.

Keywords: PRC, pension system, social policy, correlation coefficient

At the end of 20th century, the social protection of the population has become the major attribute of the

social policy of any civilized state. The goal of majority of the social protection systems is in the maintaining

the stability of income of people, providing an equal access to the medical assistance and in the provision of

necessary social services. In the economically developed states the social protection is an essential part of the

national economy, the cost of which for many West-European states makes more than a quarter of gross

domestic product. The most developed systems of social protection have the countries of the European Union

(EU).

Thanks to the social protection systems the modern European economies have gotten the name

socially-oriented.

As the experience of the Western-European countries shows, the existence of the thought out social

protection system, covering all the citizens, not only leads to an improvement of their welfare, expends, and

strengthens the country’s labor force, but also contributes to the economic growth and stabilization of the

political and social situation in the country. Thus, the social protection has a positive impact on the society,

promoting the social harmony and provision of the common sense of the social support among its members.

The determining influence on the systems of the social protection in the EU countries have the modern

demographic trends (birth-rate failing is the below the natural reproduction of the population and its aging),

strengthening of the European integration and economic globalization.

Corresponding author: Inna Stecenko, Ph.D. in economics, professor, head of the doctoral program “Regional Economy and Economic Policy”, Vice-Rector of Science of Baltic International Academy, expert of the Latvian Academy of Sciences in the field of Economics; research fields: the international economics, the investment attraction, the regional development. E-mail: [email protected].

D DAVID PUBLISHING

AN AGING POPULATION OF CHINA ON THE COUNTRY’S ECONOMY

1062

Theory

The researches of the issues of the social protection systems as one of the complex systems of the

developed market economy, occupy an important place in the works of numerous scholars and practitioners in

the economically developed countries, in the activity of the International Labor Organization, EU, International

financial organizations such as the International Bank for Reconstruction and Development, International

Monetary Fund. The International Organization of social protection exclusively has a deal with the issues of

social protection. The most careful attention to the issues of social protection accounts for the 1970s and early

1980s, when the issues of the social policy and social protection were considered as one of the most important

elements of the theory of the social state. It was associated with the significant increase of the social expenses

in the general structure of GDP (Gross Domestic Product) of many European countries; therefore, many experts

believe this index as a main in the development of theory of the “social state”. It promotes the development of

the social protection system. Despite the fact that the national systems of the social protection in market

economy countries are still far from the perfection, their development not least determined by the sufficiently

high level of professionalism of experts, who are engaged in the formation of policy in the given field. The

general-theoretical bases of formation and development of the social state and system of the social protection of

the population are laid in the works of classics of the economic mind (Smith, 1759/1982; Keynes, 1956; Hayek,

2012; M. Friedman & R. Friedman, 1990). In particular, the problem of the state control over the social system

protection is reflected in the works of supporters of neoclassical views of Marshall (1920) and Pigou

(1949/1989).

The model of social maneuvering of the incomes of population and active intervention of the state in the

issues of regulation of the social protection are disclosed in the researches of Keynes (1956). The particular

provisions of welfare economics are represented by the theory of economic optimality of Pareto (2008). The

ration of the social fairness with the categories of equality and freedom were researched by Rawls (1993), M.

Friedman and R. Friedman (1990). The issues of formation and development of the “social market economy”,

the basis of existing of which was the provision that the government should balance the requirements of the

economic freedom of effectiveness and growth, on the one hand, need for the social fairness in the distribution

of incomes, on the other hand.

The issues of the social protection have gotten quite serious development also in the works of such famous

economists as: Beveridzh (1944), Andersen and Regini (2000), Stiglitz, Fitoussi, and Sen (2010), and others.

To the issues of the social protection of the population is devoted many works of the European and

American scientists. The formation of the financial resources for the provision of pension fund of China is

poorly studied topic. The importance of study of the given experience is represented by the following

circumstances. Realizing that the volume of trade of China with the EU countries and USA is significant

within the frameworks of volume of world trade, it is necessary to predict the future development of

economy of PRC in the implementation of the social policy. Whether the implementation of the pension plan

will have an influence on the stable growth of GDP, the ration of the yuan to the dollar, the yuan to the euro

or not?

The economically developed countries of the EU have gained an extensive experience of how to organize

and improve the social protection, taking into the consideration that any increase in the social security, pension

payments has a significant influence on the budget of the state as a whole.


1063

The Goal

In this study, the author suggests to evaluate the impact of aging population of China on the stability of the

economic development of the state that is predetermined the choice of the topic of this study.

Methods

The following methods were used in the research: the method of scientific abstraction, deduction, system

analysis, correlation analysis, and mathematical prediction.

Key Findings

The attention of many researchers—economists is fixed on the economy of China, as the fast–growing

market of Celestial Empire affects more profoundly on Eurasian continent and on the world economy as a

whole. According to the research of the Organization for Economic Cooperation and Development (OECD) by

2016 the China will give way to the U.S., namely, to the leadership of the world’s largest economy and on the

expert’s forecasts the GDP of China and India is most likely will exceed the GDP of “Group of 7” by 2025.

The income level per capita by 2060 in China will increase by seven times; the forecasts of OECD are

based on the indicators of purchasing-power parities for 2005. At that, OECD warns that none of these

forecasts are final1.

Although, the announced 7.7% of growth of GDP in 2012 is the lowest for China since 1999 (then the

country’s economy grew by 7.6%) what is not surprising as the world crisis leaves mark and yet this indicator

exceeds the planned 7.5% by the Chinese government—the moderate numbers which the economy of China

will be easily to achieve. For the 2013 the planned economic growth of People’s Republic of China (PRC) is

reduced the OECD from 7.8% to 7.4 %.2

The reason for that is not only the world economic crisis, but also internal, social and economic issues of

the state. The author would like to focus on one of them—it is the increase of number of people of retirement

age which lies in the plane of formation of social policy of China.

The Constitution of PRC and documents of PRC use the largest social and cultural commonalities as the

most important for the Chinese society and to manage them are used such usual concepts for socialistic

“constitutionalism” as: classes, workers, peasants, intellectuals, nations. In the introduction to the constitution it

is written that “in the socialist construction it is necessary to relay on workers, peasants and intellectuals”,

however, in the pension reform of China get only workers and intellectuals—the peasants of Celestial Empire

are not yet included in the pension reform.

The economic reform of China stimulated the awareness of the specificity of interests of various classes

and groups. However, the carried out researches of sociologists suggest that the representatives of various

classes of population are increasingly identify themselves not with any class (and consequently do not support

its political and social attitudes and programs) and with the other sociocultural commonalities (according to the

nationality, education, age, and etc.): the young people are more clearly aware of their specific interests, ethnic,

and confessional commonalities, personnel specialists, employees of government machine are formed, the

lecturers are increasingly write about the transformation of intellectuals into the most progressive social force.

1 http://www.oecd-ilibrary.org/development/development-co-operation-report-2011_dcr-2011-en. 2 http://www.stats.gov.cn/english/statisticaldata/.


1064

The article 44 and 45 of the Constitution of China3 are formulated the tasks of the state and sometimes the

society in the field of social security as well. Thus, the state in accordance with the law establishes the

procedure of retirement of workers and employees (only), with the assumption that the “state and society

provide for retirees”. At the state allots a task to develop a social insurance, social welfare, medical, and health

services, the state and society should provide for disabled persons from the military personnel, to provide the

financial assistance to the families of the fallen heroes, grant discounts to the service families, to assist to the

blind, deaf, dumb, and the other citizens with the disabilities in employment, getting living allowance, getting

education.

There are problems in the country and they are inevitable. The reform of pension system of China makes it

aim by 2025 to cover all the working Chinese by the pension system.

Another problem, lying in the plane of social policy is the agrarian overpopulation of the country.

The government intensely pursuing a course of urbanization and by 2020 in rural localities will remain

close to 500 million of people (about 30% of the population of the country) and the rest will live in the cities4.

It should be noted that in 2009 the number of persons participated in basic pension insurance in urban

areas at year-end amounted to 218.91 million, a rise of 17.54 million persons year-on-year. Of the total, number

of employees and retirees stood at 165.87 and 53.04 million, which rose 14.04 and 3.50 million persons

respectively, year-on-year. The number of migrant workers participated in basic pension insurance hit 24.16

million, expanding 5.70 million persons year-on-year. The number of enterprises participated in basic pension

insurance grew to 199.51 million persons, rose by 17.16 million persons year-on-year (see Table 1).

Table 1

The Analysis of the Socioeconomic Indices of China From 2008 to 2012

Category 2008 2009 2010 2011 2012

GDP growth rate 9.6 9.2 10.4 9.3 7.7

Government budget - - - -1.1 -1.5

Public revenue (million yuan) 61,330 68,518 83,102 103,874 117,210

Foreign exchange reserves (billion US) 19,460 23,992 28,473 31,811 33,116

Population (million) - 133,474 134,100 134,735 135,404

Urban (million) - 62,186 66,557.5 69,079 71,182

Rural (million) - 71,288 50.32 65,656 64,222

Population ages 0-14 (% of total) - 18.5 16.60 16.5 16.5

Population ages 15-64 (% of total) - 73.5 74.53 74.4 74.1

Population ages 65 and above (% of total) - 8.5 8.86 9.1 9.4

Note. Sources: http://www.wto.org/english/res_e/booksp_e/anrep_e/anrep11_e.pdf.

The treatment on basic pensions for enterprise retirees improved, and all in full payment on schedule. The

number of retirees brought into the community management arrived at 34.61 million, account for 73.2%, a

year-on-year rise of 2%.

The revenue of basic pension insurance fund topped 974.0 billion yuan, up by 24.3%. Of which, revenue

collection totaled 801.6 billion yuan, grew 23.4% year-on-year. Financial subsidies at all levels of basic

pension insurance fund stood at 143.7 billion yuan. The total expenses of fund topped 739.0 billion yuan, up by

3 http://chinalawinfo.ru/constitutional_law/constitution. 4 http://chinalawinfo.ru/economic_law.


1065

23.9% year-on-year. The accumulated basic pension insurance fund at year-end accounted for 993.1 billion

yuan5 .

The analysis of independence number of working population in China at the level of growth of GDP of the

country has been carried out, using the method of pair correlation.

The aim of the correlation analysis is to identify the degree of dependency that exists between factor-based

and resulting attributes. As is known, the size of the linear relationship between two attributes characterize the

linear correlation coefficient, which is denoted by r . The size of the correlation coefficient can be calculated

by the following formula (Pearson correlation coefficient).

2

11

2

2

11

2

111

1

2

1

2

1

n

ii

n

ii

n

ii

n

ii

n

ii

n

ii

n

iii

n

ii

n

ii

n

iii

yynxxn

yxyxn

yyxx

yyxxr (1)

Where, x and y —mean values X andY :

n

iix

nx

1

1,

n

iiy

ny

1

1.

n : sample size;

i : number of observation ( ni ...,,2,1 ).

Тhe size of the correlation coefficient ranges between -1 and 1.

The data are summarized in Table 2.

The carried out calculations show that the increasing number of residents and working residents at the age

of 15-64 does not influence on the growth of GDP of China, even more interesting is the dependence of growth

of GDP of the country from an agrarian population. It should be noted that the correlation coefficient is less

than 0.5 that indicates to the weak dependence, however, according to the other indices the coefficient is

negative.

Table 2 The Calculation of Correlation Coefficient of Dependence of Number of Population and Number of Working on the GDP Growth of PRC (Yielded by the Authors of This Paper)

Year GDP growth (%) Popul (million) Urban popul (million) Rural popul (million) Popul (aged 15-64)

2009 9.2 133,474 62,186 71,288 92,097

2010 10.4 134,100 66,657 67,414 93,961

2011 9.3 134,735 69,079 65,556 94,072

2012 7.7 135,404 71,182 64,222 100,334

Correlation coefficient -0.6518 -0.49731 0.43678 -0.76523

On January 1, 2012, China is on the first place according to the gold and foreign exchange reserves ahead

of Japan, the U.S., Saudi Arabia, and Russia. As it is known that the availability of the large amount of gold

and foreign exchange reserves allows “insure” the economy of the country in the periods of financial crisis.

They are easier allowed to go through the capital outflow, devaluation of the currency.

Thus, gold and foreign exchange reserves are needed to bridge the deficit of balance of payments of the

country in the “hard times” toward the external market. According to the opinion of experts, the volume of

5 http://www.stats.gov.cn/english/statisticaldata/.


1066

reserves should not be less than the volume of quarter import of the country. The International reserves of PRC

rose to 3.3 trillion of dollars, following the results of 20126.

The share of gold reserves in China’s reserves is 2%, while the index of Germany is 7%. By the volumes

of reserves China ranks first, on the second line—Japan, Saudi Arabia, Russia, and Switzerland7.

The present level of gold and foreign exchange reserves of PRC is a good foundation for economic growth.

Thus, according to the forecast of the head of Sovereign Wealth Fund of China Investment Corp (CIC),

LouTszieya, Chinese economy, taking into account some strengthening of the economic activity in the world,

could increase by more than 8%, following the results of 2013.

According to the Table 3, along with the growth of income in PRC, will occur the accumulation of foreign

exchange reserves this is evidenced by the high rate of correlation—0.95.

However, the GDP growth is not affect at the level of foreign exchange reserves and this confirms the

negative index of correlation—0.88647.

Table 3 The Calculation of Correlation Coefficient Between Foreign Exchange Reserves, Public Revenue and GDP Growth (%) of China (Yielded by the Authors of This Paper)

Year Foreign exchange reserves (billion US) Public revenue (million yuan) GDP growth (%)

2008 19,460 61,330 9.6

2009 23,992 68,518 9.2

2010 28,473 83,102 10.4

2011 31,811 103,874 9.3

2012 33,116 117,210 7.7

Correlation coefficient 0.957952 -0.88647

Intersept -22,240

Slope 4.0

The data of the carried out analysis are represented as graphics and regression equation (see Figure 1).

y = 24,684x ‐ 22240

R 2 = 0,9647

y = 54,259x ‐ 22240

R 2 = 0,0057

0

20000

40000

60000

80000

100000

120000

140000

2007 2008 2009 2010 2011 2012 2013

year

foreign exc. reser

foreign exchangeres erves , billion US

public revenue, mlnyuan

L inear (foreignexchange res erves ,billion US )L inear (foreignexchange res erves ,billion US )L inear (foreignexchange res erves ,billion US )

Figure 1. The correlation of foreign exchange reserves and the public revenue.

However, the goal of the research is to identify the influence of increasing number of people over 65 years

6 http://www.imf.org/external/pubs/ft/gfsr/. 7 http://www.rbc.ua/rus/top/show/zolotovalyutnye-rezervy-kitaya-v-2012-g-vdvoe-prevysili-mirovoy-04032013151600.


1067

old on the state of economy of China. The author made the calculations of dependence of increase of the

foreign reserve currency on the different age groups of country’s population (see Table 4).

Thus, the obtained results showed that the amount of foreign exchange reserves of China is directly related

to the level of ageing of population of the country, this is proved by obtained data of the correlation analysis:

The correlation coefficient of foreign exchange reserves and the population over 65 years is 0.870—It is a high

level of correlation. It is possible that it shows that the Chinese authorities in such way prepare for the decision

of retirement policy by increasing foreign currency reserves.

Table 4 The Calculation of Correlation Coefficient of Dependence of Foreign Exchange Reserves on the Age Groups of the Population (From 0-14 and People Older Than 65 Years) (Yielded by the Authors of This Paper)

Year Foreign exchange reserves (billion US) Age from 0-14 (thousand ofpeople)

Age over 65 years (thousand of people)

2008 19,460 - 11,257

2009 23,992 24,663 11,309

2010 28,473 22,245 11,881

2011 31,811 22,164 11,870

2012 33,116 22,341 12,727

-0.88647 0.870807

slope 15.94

intersept -143,146

It should be noted that the problem of ageing of population is not unique to China, it is intensely indicated

by the European Commission, as the population over 65 years in the EU countries—27% is constantly

increasing: in 2008—17.1%, 2009—17.2%, 2010—17.4%, 2011—17.5%, and 2012—17.8%.

The forecasts of the European Commission for the next 50 years represented by the Eurostat are also

disappointing. As you can see from the data given in Table 5, if the number of people over 65 years in 2030 is

42.31% of the working population, then in 2060 this index will grow by 50%, and is more than 60% of all the

population of 28 countries of EU.

Table 5 The Forecast of the European Commission About the Number of People Over 65 Years as a Percentage of the Group From 15–64 Years

Year Population size of the European Union Population size over 65 years (as % of the group 15-64)

2030 522,342,413 42.31

2035 524,536,969 45.52

2040 525,702,440 45.96

2045 525,624,613 51.55

2050 524,052,690 56.06

2055 521,034,357 60.11

2060 516,939,958 60.32

Note. Source: eurostat.ec.europa.eu/tgm/refreshTableAction.do?tab=table&plugin=1&pcode=tps00010&language=en.

It seems interesting to make the forecast of growth of number of people over 65 years in China and by the

paces of the country’s income and foreign exchange reserves. In the calculations used the EXEL program,

where as it is known, the equation for FORECAST is a + bx, where:


1068

xbya xbya (2)

and:

2)(

))((

xx

yyxxb (3)

and where x and y are the sample means AVERAGE (known x’s) and AVERAGE (known y’s).

The calculated data are summarized in Table 6.

Table 6

The Forecast of Growth of Foreign Exchange Reserves, Public Revenue and People Over 65 Years (Yielded by

the Authors of This Paper)

Year Foreign exchange reserves (billion US) Public revenue (million yuan) Age over 65 years (thousand of people)

2013 37,025.5 130,941.6 12,859.1

2014 40,096.5 145,653.2 13,209.2

2015 43,167.5 160,364.8 13,559.3

The made calculations will show that by 2015 exchange reserves of China could be increased by nearly

220% in comparison with 2008, the incomes will increase by 260% in comparison with 2008, respectively, if to

assume that the level of growth will be kept.

According to the calculations, the level of people over 65 years will also increase and will be 13.5 million

of people, undoubtedly, it will be a serious weigh of the budged of the country.

Conclusions

Thus, first of all we should note that the effect of aging of the population is observed in most industrialized

countries, primarily, in Europe, where the number of people over 65 years old is about 20%, although for China

this percentage is almost two times lower—8.9%. It is curious that the level of foreign exchange reserves of

China do not depend on GDP growth as evidenced by the negative coefficient of correlation -0.88647. However,

the amount of China’s reserves affects the number of people over 65 years old, it confirms the correlation

coefficient 0.870. Undoubtedly, the problem of ageing of population is characterized by the increasing number

of elderly people what leads to a volume reduction in medical aid of population of youthful age and leads to the

growth of social security of working population. This usually leads to the simultaneous decrease in health of

population and requires reorientation of capital investments of the state toward the compensation of economic

mechanisms which are designed to maintain the functioning of the social economic sector. Obviously, the made

calculations show that China accumulated foreign exchange reserves are necessary, including maintain social

reforms in the country and for the provision of social security of the population.

References Andersen, G. E., & Regini, M. (2000). Why deregulate labour markets? Oxford: Oxford University Press. Barry, J. N. (2007). The Chinese economy: Transitions and growth. Cambridge: Massachussets Instituts of Technolodgy. Friedman, M., & Friedman, R. (1990). Free to choose: A personal statement. San Diego: Harvest Books. Hayek, F. (1988). The collected works of F. A. Hayek. W. W. Bartley, (Ed.). Chicago: University of Chicago Press. Keynes, J. M. (1956). The world of mathematics (2000 ed.). J. R. Newman, (Ed.). Scotland, Dover: University of St Andrews,

Scotland. Marshall, A. (1920). Encyclopedia Americana (1987 ed.). New York: Marshall Cavendish.


1069

Оrlov, A. I. (2002). Ekonometrika. Мoskow: Eksamen. Pigou, A. C. (1989). Employment and equilibrium. New York: MacMillan. Rawls, J. (1993). Political liberalism. New York: Columbia University Press. Shenkar, O. (2005). The Chinese century: The rising Chinese economy and its impact on the global economy, the balance of

power, and your job. New York: Pearsn Education Inc. Smith, A. (1982). Theory of moral sentiment. In the glasgow edition of the works and correspondence of Adam Smith (Vol. 1) (pp.

184-185). Oxford: Oxford University Press. Stiglitz, J. E., Fitoussi, J. P., & Sen, A. (2010). Mismeasuring our lives: Why GDP doesn’t Add Up. Fort Myers: The New Press.


Transformational Leadership and Organizational Outcomes:

Evidence From Vietnamese Workers

Ngoc-Hong Dao , In-Soo Han

Chungnam National University, Daejeon, South Korea

The purpose of this study was to investigate empirically the impact of transformational leadership on organizational

outcomes (OCB—organizational citizenship behavior, OC—organizational commitment, and job satisfaction), and

the mediating role of trust in the leader in the relationship between transformational leadership and organizational

outcomes in Vietnamese employees. The results showed that, first, transformational leadership had a significant

relationship with organizational citizenship behavior, organizational commitment, and job satisfaction. Second,

there was a positive relationship between transformational leadership and trust in the leader. Third, trust in the

leader was positively and significantly related to OCB, affective organizational commitment, and job satisfaction.

Fourth, a moderating role of trust in the leader was identified in the relationship between transformational

leadership and organizational outcomes. Finally, some practical recommendations for developing leadership

competencies in Vietnamese managers are suggested.

Keywords: Vietnam, transformational leadership, trust in leader, organizational outcomes

On January 11, 2007, Vietnam, one of the world’s fastest growing economies, won formal approval from

the World Trade Organization (WTO) to become its 150th member. This brought not only opportunities but

also challenges to Vietnamese businesses and the economy. As business environments become global, there is a

growing need for them to be more competitive and performance-oriented.

To gain competitive advantage, a variety of managerial effectiveness skills and innovative ideas are

required by Vietnamese companies. Among other matters, much attention has been paid to the leadership issue,

because it is well-known that leadership plays an important role in securing employee motivation and the

behaviors needed to achieve organizational effectiveness. How to find and implement an effective leadership

style in a changing business environment becomes one of the principal challenges to Vietnamese business

management.

Despite its importance, however, there are few studies that have investigated which styles are appropriate

in the Vietnamese context or tested empirically how they affect employee behavior and performance. Thus, in

both theory and practice, there is growing interest in, and demand for, more systematic and empirical research

on effective leadership styles in Vietnam.

Transformational leadership has gained attention in both business and academic fields since the 1980s,

Ngoc-Hong Dao, master, Department of Business Administration, Chungnam National University; research fields: human

resource management, organizational behavior. E-mail: [email protected]. Corresponding author: In-Soo Han, Ph.D., professor, Department of Business Administration, Chungnam National University;

research fields: human resource management, organizational behavior, innovation, business & society. E-mail: [email protected].

D DAVID PUBLISHING

TRANSFORMATIONAL LEADERSHIP AND ORGANIZATIONAL OUTCOMES

1071

when new leadership was needed to deal with fundamental changes in the business world. It was considered an

ideal type of leadership that can invoke the changes organizations need and positive follower behavior. Many

research findings have been reported noting that transformational leadership has a positive effect on required

individual and organizational outcomes (Podsakoff, MacKenzie, Moorman, & Fetter, 1990; Pillai, Schriesheim,

& Williams, 1999; Goodwin, Wofford, & Whittington, 2001).

In this study, the relationship between transformational leadership and organizational outcomes, especially

behavioral outcomes is investigated. The mediating role of trust in leadership between the two variables is also

analyzed. The investigation and analysis are targeted at the particular business environment in Vietnam. Finally,

some practical implications are suggested.

Theoretical Background and Hypotheses

“Transformational leadership” was identified by Burns (1978) and extended by Bass (1985). The origin of

transformational leader theory lies with the work of Burns (1978), who originally proposed two distinct

leadership styles based on his analysis of the behaviors displayed by various political leaders. The first of these,

transactional leadership, characterized many of the traditional leadership theories existing at that time.

According to Burns (1978), transactional leadership was based on an exchange process between leaders and

subordinates, where rewards were administered to employees based on acceptable levels of displayed effort and

performance. Burns also noted that these leaders appeared to obtain an adequate level of performance from

their followers, who worked according to rather strictly defined tenets.

In contrast to transactional leadership, the second type of leadership style, transformational leadership, was

conceptualized as one to encourage followers to transcend their own self-interests and move beyond simple

leader-member transactions for the good of the group or the organization (Burns, 1978; Bass, 1985). According

to Burns (1978), the transformational style creates significant changes in the life of people and organizations. It

redesigns perceptions and values, and changes the expectations and aspirations of employees. Unlike the

transactional style, it is not based on a “give and take” relationship, but on the leader’s personality, traits, and

ability to make change through vision and goals.

Another researcher, Bass (1985), suggested a transformational leadership theory that was added to the

initial concepts of Burns (1978). According to Bass, the extent to which a leader is transformational is

measured first in terms of influence on the followers. Followers of such a leader feel trust, admiration, loyalty,

and respect for the leader and they will do more than they are expected to do. The leader transforms and

motivates followers with charisma, intellectual arousal, and individual consideration. Additionally, this leader

seeks new ways of working while trying to identify new opportunities, as opposed to threats, and tries to break

out of the status quo and alter the environment.

Burns (1978) and Bass (1985) posited that transformational leadership was a paradigm in which the leader

influenced the followers to perform beyond expectations by making them more aware of the importance and

value of goals, influencing them to transcend self-interest for the good of the group or organization, and by

appealing to their higher-order needs. Also, many authors (House & Baetz, 1990; House & Podsakoff, 1996)

have shown that transformational leaders demonstrate symbolic and meaningful leadership behaviors such as

emphasizing the importance of a task, advocating ideological values, and articulating a great vision.

Transformational leaders take these steps as ways of producing affective and cognitive consequences among

the followers. These consequences include emotional attachment and trust in the leader, arousal of intense


1072

motivation, and enhanced self-efficacy in the followers.

The transformational leadership theory was further developed by Bass and Avolio (1995), who claimed

that transformational leadership had four components: idealized influence, individualized consideration,

inspirational motivation, and intellectual stimulation. The first, idealized influence is identified in leaders

who behave in a manner that causes followers to want to emulate them. Originally, Bass (1985; 1999) had

identified this construct as charisma, borrowing the term from Weber (1947). Bass (1985) defined a

charismatic leader (one who exhibits idealized influence) as behaving in a consistent manner, guided by high

moral principles. This leader is noted for his determination and persistence, and the subsequent behavior of

followers who desire to act in a manner similar to the leader. Thus, idealized influence from a leader

functions to transform followers by creating changes in their goals, values, needs, beliefs, and aspirations

(Rowold & Heinitz, 2007; Yukl, 2002).

By individualized consideration, the leader builds a one-to-one relationship with his or her followers,

and understands and considers their differing needs, skills, and aspirations. By inspirational motivation, the

leader articulates an exciting vision of the future, shows the followers how to achieve the goals, and

expresses his or her belief that they can do it. By intellectual stimulation, the leader broadens and elevates the

interests of his or her employees, and stimulates followers to think about old problems in new ways (Bass,

1985).

Transformational Leadership and Organizational Outcomes

A transformational leader is fundamentally an agent for change. The theory of transformational leadership

right from inception (Bass, 1985; Burns, 1978) makes articulation of a vision by the leader an essential

component of the leadership paradigm. The new vision so articulated inspires subordinates to greater efforts,

directed toward bringing about a change in their attitudes, self-concepts, and motives (House & Shamir, 1993).

The combined effects of communicating the new vision by means of inspiring symbols and emotional appeals

at varying levels and, possibly, the forging of emotional ties between the leader and the subordinates, as well as

the modeling of ideal conduct and values by the leader, can lead to performance beyond expectations. Studies

(Judge & Piccolo, 2004; Lowe, Kroeck, & Sivasubramaniam, 1996) have consistently supported the positive

effects of transformational leadership on several organizational and individual outcomes, including

organizational citizenship behavior (OCB), organizational commitment (OC), and job satisfaction.

In this study, we empirically investigate the hypothesis below:

Hypothesis 1. Transformational leadership is positively related to organizational outcomes.

Transformational leadership and organizational citizenship behavior. Organizational citizenship

behavior is generally conceptualized as behaviors related to the work place but which are discretionary; that is,

they are not part of the formal organizational reward system but promote the effective functioning of the

organization (Greenberg, 2005; Organ, 1988; Organ & Konovsky, 1989). It is commonly accepted that

organizations need activities of employees that go beyond role prescriptions.

The fact that transformational leadership behaviors show significant, consistent, and positive relationships

with OCB is not surprising since the heart of transformational leadership is the ability to get employees to

perform above and beyond expectation, and this extra effort may show up in the form of citizenship behaviors.

A review of the leadership literature by Podsakoff et al. (1990) indicates that transformational leaders get

followers to perform above and beyond expectations by articulating a vision, providing an appropriate role


1073

model, fostering the acceptance of group goals, providing individualized support and intellectual stimulation,

and expressing high performance expectations.

It is hypothesized that:

Hypothesis 1-a. Transformational leadership is positively related to the follower’s organizational

citizenship behavior.

Transformational leadership and affective commitment. Affective commitment is the one of three

types of organizational commitment; it is an attitudinal variable that denotes an employee’s level of attachment

to the organization (Meyer & Allen, 1991). Affective commitment refers to an incumbent’s emotional

attachment to the organization; that is, whether his/her expectations are met and he/she wishes to stay with the

organization.

Studies have found that transformational leadership enhances the organizational commitment of followers

(Goodwin et al. 2001; Judge & Bono, 2000). Organizational commitment of followers is influenced by

transformational leadership (Lok & Crawford, 2004). Transformational leadership theory emphasizes the role

of empowerment as a central mechanism of building commitment to the organization’s objectives (Bass, 1999).

Empowered employees are more likely to reciprocate with higher levels of commitment to their organization.

By showing respect and confidence in their followers, transformational leaders are able to develop a high

degree of trust and loyalty in their followers to the extent that followers are willing to identify with the leader

and the organization. As a result, followers trust in and emotionally identify with the leader, such that they are

willing to stay with the organization, even under very difficult circumstances.

These findings can be expressed in the following hypothesis:

Hypothesis 1-b. Transformational leadership is positively related to a follower’s affective commitment.

Transformational leadership and job satisfaction. Job satisfaction is defined as “an overall measure of

the degree to which the employee is satisfied and happy with the job” (Hackman & Oldham, 1975). Many

studies show that transformational leadership is positively correlated with employees’ job satisfaction (Bogler,

2001; Griffith, 2004). Leaders who practice transformational leadership reportedly have more satisfied and

committed followers than do leaders who practice a non-transformational style of leadership. It is plausible that,

through their collective and visionary approach, transformational leaders buffer employee distress and job

dissatisfaction and motivate followers to collaborate and achieve greater results than expected (Bass & Avolio,

1994; Bass, 1999). Thus, in this study, we expect that:

Hypothesis 1-c. Transformational leadership is positively related to a follower’s job satisfaction.

Transformational Leadership and Trust in the Leader

Trust in a leader has been conceptualized as faith in and loyalty to the leader (Nooteboom & Six, 2003;

Podsakoff et al., 1990). Transformational leaders gain trust from followers by maintaining their integrity and

dedication, by being fair in their treatment of followers, by demonstrating their faith in followers, and by

empowering them. It has been suggested that one way that charismatic and transformational leaders can

demonstrate their dedication and build followers’ trust is through self-sacrificial behaviors (Conger & Kanungo,

1998; House & Shamir, 1993). Leaders can self-sacrifice by taking on a proportionately larger workload, by

foregoing the trappings of power, or by postponing rewards, for example. In sum, transformational leadership

behaviors are successful, in part, due to care and concern perceived in the relationship.

Bennis and Nanus (1985), Gillespie and Mann (2004), and Pillai et al. (1999) have demonstrated that there


1074

is a direct relationship between transformational leadership and trust. This is supported by Saracostti (2007)

who demonstrated that trust is social capital to organizations. This would be expected because transformational

leaders would need to work hard to earn the trust of their followers if the leaders intend to achieve their goals.

Thus, it is hypothesized that:

Hypothesis 2. Transformational leadership is positively related to trust in a leader.

Trust in a Leader and Organizational Outcomes

The effect of trust in the leader with regard to organizational outcomes has attracted increasing interest in

recent years (Mayer, Davis, & Schoorman, 1999; Hosmer, 1995). This indicates that researchers and

practitioners continue to recognize trust as an important factor in determining employee behavior and employee

attitude. The consequences of trust include organizational outcomes, such as organizational citizenship

behavior, affective commitment, and job satisfaction.

Thus, it is hypothesized that:

Hypothesis 3. Trust in the leader is positively related to organizational outcomes.

Hypothesis 3-1. Trust in a leader is positively related to the followers’ organizational citizenship

behaviors.

Hypothesis 3-2. Trust in a leader is positively related to the followers’ affective commitment.

Hypothesis 3-3. Trust in a leader is positively related to the followers’ job satisfaction.

Mediating Role of Trust in a Leader Between Transformational Leadership and Organizational

Outcomes

Many studies have shown that transformational leadership is consistently associated with trust in the

leader (Batram & Casimir, 2007; Lowe et al., 1996). Trust in the leader correlates positively with various

outcomes such as organizational citizenship behaviors, performance, and satisfaction (Jung & Avolio, 2000;

Pillai et al., 1999). Thus, it would be expected that trust would play mediating roles in the relationship between

transformational leadership and organizational outcomes.

Organ (1988) and Konovsky and Pugh (1994) demonstrated that organizational citizenship behaviors

occur in a context in which social exchanges, which are involved in transformational leadership, characterize

the quality of leader-subordinate relationships. These authors demonstrated, in particular, that trust plays an

important mediating role in the relationship between transformational leadership and organizational

citizenship behavior. It seems reasonable to think that when transformational leaders motivate employees to

perform above and beyond expectations, this will lead to organizational citizenship behavior on the part of

the subordinates. However, the trust relationship between transformational leadership and OCBs seems to be

a pivotal condition for OCB to occur. This means that without the trust relationship, there is no link between

transformational leadership and organizational citizenship behavior. Thus, in this study, it is supposed that:

Hypothesis 4. Trust in a leader mediates the relationship between transformational leadership and

organizational outcomes.

Hypothesis 4-1. Trust in a leader mediates the relationship between transformational leadership and

organizational citizenship behavior.

Hypothesis 4-2. Trust in a leader mediates the relationship between transformational leadership and

affective commitment.

Hypothesis 4-3. Trust in a leader mediates the relationship between transformational leadership and job


1075

satisfaction.

The hypothesized model of the study is shown in Figure 1.

Figure 1. The hypothesized model.

Method

Sample

Data for this study were obtained from employees of well-known conglomerates, such as the Adidas

Company and Viettel Mobile in Vietnam. The final sample for the study consisted of 200 employees who

worked with their direct supervisor. A cover letter attached to each questionnaire explained the objective of the

survey and assured respondents of the confidentiality of their responses and the voluntary nature of

participation in the survey. Of the 200 questionnaires distributed, 186 were finally returned usable, giving a

response rate of 93% (186/200).

Of these respondents, 49.5% were males and 50.5% were females. The most common ages of the employees

were between 26 and 45: specifically, from 26 to 35 years old (59.1%) and from 36 to 45 years old (37.1%). Most

(79%) of the participants had earned a post-secondary school degree (bachelors or graduate degree).

Measures

The questionnaires were initially prepared in English. To collect information from Vietnamese employees,

the questionnaires are translated from English into Vietnamese by the author, and checked using a

back-translation method (Parameswaran & Yaprak, 1987).

Transformational leadership. Transformational leadership was measured using 20 items of the

Multi-Factor Leadership Questionnaire (MLQ-Form 5X) (Bass & Avolio, 1995). Subjects judged how

frequently their immediate leader engaged in transformational leadership behaviors. Ratings were completed on

a five-point scale with: 1 indicating “Not at all” and 5 indicating “Frequently”. Sample items included: “My

leader goes beyond self-interest for the good of the group”, and “My leader helps me to develop my strengths”.


1076

These items were averaged to form a scale, which had a reliability of 0.96.

Trust in leader. This variable was measured by seven items adapted from Gabarro and Athos (1978). On

a five-point scale, ranging from 1 (“strongly disagree”) to 5 (“strongly agree”), employees indicated the extent

to which they trusted their direct leaders. Sample items included, “I am not sure I fully trust my supervisor”,

and, “I believe my supervisor has great integrity”. These items were averaged to form a scale, with a reliability

of 0.92.

Organizational citizenship behavior. A 10-item scale developed by Organ and Ryan (1995) was used to

measure OCB. Response options ranged from 1, “strongly disagree”, to 5, “strongly agree”. Sample items for

the service-oriented OCB scale are, “I help other employees with their work when they have been absent”, and

“I do not spend a great deal of time in conversation at work”. The alpha reliability of our OCB scale was 0.92.

Affective commitment. Affective commitment was measured by a five-item scale developed by Meyer

and Allen (1991). Participants were asked to rate each item on a five-point Likert scale (1 = strongly disagree, 5

= strongly agree). Sample items from this measure include the following: “I enjoy discussing my organization

with people outside it”, and, “I feel ‘emotionally attached’ to this organization”. The alpha reliability of this

measure was 0.89.

Job satisfaction. A five-item job satisfaction scale developed by Hackman and Oldham (1975) was used

to measure job satisfaction. Participants were asked to rate each item on a five-point Likert scale (1 = strongly

disagree, 5 = strongly agree). A sample item is, “Generally speaking, I am very satisfied with this job”. The

alpha reliability of this scale was 0.88.

Control variables: Demographic variables (age, gender, educational levels, and tenure) were included as

control variables because previous studies have suggested that they may have potential effects on the mediators

and outcome variables in the study (Kammeyer-Mueller & Wanberg, 2003).

Results

Descriptive Statistics and Interrelationships

Table 1 includes means, standard deviations, alpha coefficients, and correlations among the variables. It

shows that transformational leadership has significant positive correlations with trust in the leader (r = 0.90, p <

0.01), organizational citizenship behavior (r = 0.89, p < 0.01), affective commitment (r = 0.86, p < 0.01), and

job satisfaction (r = 0.90, p < 0.01).

Table 1

Descriptive Statistics, Alpha Coefficients, and Correlations

Variables M S. D 1 2 3 4 5 6 7 8 9

1. Age 33.9 1

2. Education 0.24** 1

3. Gender -0.24** -0.13 1

4. Tenure 0.24** -0.01 0.03 1

5.Transformational leadership 3.90 .59 -0.11 -0.20** 0.02 0.12 (0.96)

6. Trust 3.96 .59 -0.03 -0.17* -0.01 0.09 0.90** (0.92)

7. OCB 3.96 .52 0.00 -0.21** -0.01 0.12 0.89** 0.96** (0.92)

8. Affective commitment 3.94 .57 -0.04 -0.22** -0.08 0.09 0.86** 0.89** 0.92** (0.89)

9. Job satisfaction 3.94 .56 -0.01 -0.21** -0.01 0.11 0.90** 0.93** 0.937** 0.948** (0.88)

Notes. * p < 0.05; ** p < 0.01.


1077

It is noteworthy that educational level was negatively related to all measured constructs. The higher the

education the employees had, the lower they rated their leader’s transformational leadership, their

organizational citizenship behavior, affective commitment, and job satisfaction. This result can be interpreted

as indicating that the more educated employees (e.g., university graduates) might have higher aspiration levels

and expect more of their leader and companies than high school graduates.

Validity

Following common practice (Tsui, Pearce, Porter, & Tripoli, 1997), a confirmatory factor analysis (CFA)

was conducted on the 20 items that measured the five constructs in this study. As revealed in Table 2, the

results confirmed a five-factor structure with an adjusted goodness-of-fit index (GFI) of 0.97 and root mean

square error of approximation (RMSEA) of 0.05. If the values of GFI, CFI, and NFI exceed the cut-off value of

0.9, and the value of RMSEA is below the cut-off value of 0.08, then the model is said to be acceptable (Hu &

Bentler, 1999).

Table 2

Validity of Measurement Model

χ2 df RMSEA CFI GFI NFI

310.14 220 0.05 0.97 0.88 0.91

The potential threat of common method bias was checked with Harman’s single-factor test via

confirmatory factor analysis. This test is based on the assumption that common method bias is a serious

problem when a single latent factor accounts for more than 50% of the total variance of the measures (P.

Podsakoff, MacKenzie, Lee, & N. Podsakoff, 2003). The results for the single-factor model were as follows: χ2

= 2364.22, df = 1034, GFI = 0.64, AGFI = 0.61, NFI = 0.74, and RMSEA = 0.083. The chi-squared test

demonstrated that the five-factor model was superior to the single-factor model (310.14 vs. 2364.22).

Consequently, the results were worse than that of a five-factor model and one single-factor model did not

account for the majority of the variance. In short, common method bias was not of importance in this study.

Hypothesis Testing

Hypothesis 1 postulated that a positive relationship would exist between transformational leadership and

organizational outcomes. Table 2, showing the results of multiple regressions on the relationships between

transformational leadership and organizational outcomes, indicates that transformational leadership is

positively and significantly related to organizational citizenship behavior (0.88, p < 0.001), affective

commitment (0.85, p < 0.001), and job satisfaction (0.89, p < 0.001). Thus, Hypothesis 1, 2, 3 are supported.

Hypothesis 2 proposes that transformational leadership is positively related to trust in the leader. This is

confirmed in Table 4 showing that transformational leadership has a positive relationship with trust in the

leader (β = 0.91, p < 0,001). Thus, Hypothesis 2 is supported.

Hypothesis 3 predicts that trust in the leader is positively related to organizational outcomes

(organizational citizenship behavior, affective commitment, and job satisfaction). As shown in Table 4, trust in

the leader had a positive relationship with organizational citizenship behavior (β = 0.88, p < 0.001), affective

commitment (β = 0.85, p < 0.001), and job satisfaction (β = 0.89, p < 0.001). Thus, Hypotheses 3-1, 3-2, and

3-3 are supported, so Hypothesis 3 is fully supported.

Hypothesis 4 proposes that trust mediates the relationships between transformational leadership and


1078

organizational outcomes. To test the mediating role of trust in a leader, the three-steps-regression approach

recommended by Baron and Kenny (1966) was followed. According to them, the three following regression

equations should be estimated to test mediation. First, regressing the mediator on the independent variable;

second, regressing the dependent variable on the independent variable, and third, regressing the dependent

variable on both independent variable and on the mediator.

To establish mediation, the following conditions must hold. First, the independent variable must affect the

mediator in the first equation. Second, the independent variable must be shown to affect the dependent variable

in the second equation. Third, the mediator must affect the dependent variable in the third equation. If these

conditions are all hold in the predicted direction, then the effect of the independent variable on the dependent

variable must be less in the third equation than in the second. Perfect mediation holds if the independent

variable has no effect when the mediator is controlled. Partial mediation holds in the case that the effect is

significantly reduced in the third case.

Hypothesis 4-1 predicts that trust in the leader mediates the relationship between transformational

leadership and organizational citizenship behavior. Table 3 and Table 4 show that the three required conditions

were met. The effects of transformational leadership (independent variable) on the dependent variable are

significantly reduced to 0.14, although it does not reach zero. Thus, the hypothesis is partially supported.

Table 3 Results of Multiple Regression on the Relationships Between Transformational Leadership and Organizational Outcomes

Dependent variable

OCB Affective commitment Job satisfaction

Model 1 Model 2 Model 3 Model 4 Model 5 Model 6

Age 0.03 0.11 -0.13 0.04 0.02 0.10**

Education -0.29*** -029** -0.28*** -0.05 -0.30 -0.06

Gender -0.05 -0.12 -0.13 -0.13 -0.05 -0.01

Tenure 0.05 -0.10 0.10 -0.02 0.10 -0.02 Transformational Leadership

0.88*** 0.85*** 0.89***

R2 0.1 0.79*** 0.08 0.74*** 0.08 0.81***

Notes. * p < 0.05; ** p < 0.01; *** p < 0.001.

Table 4

Regression Results for Hypotheses 3, 4, and 5

Dependent variable

Trust in leader OCB Affective commitment Job satisfaction

Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7 Model 8

Age -0.01 0.07* 0.11** -0.03 0.04 -0.00 0.10** 0.06

Education -0.26** -001 -0.05 -0.04 -0.05 -0.04 -0.06 -0.06

Gender -0.05 -0.01 -0.01 -0.01 -0.10* -0.09 -0.01 -0.01

Tenure 0.09 -0.04 -0.01 0.02 -0.02 0.02 -0.02 0.00

Transformational leadership 0.91*** 0.14** 0.30*** 0.34***

Trust in leader 0.88*** 0.82*** 0.85*** 0.61*** 0.89 0.61***

R2 0.08 0.81*** 0.80*** 0.92*** 0.74*** 0.91*** 0.80** 0.88***

Notes. * p < 0.05; ** p < 0.01; *** p < 0.001.


1079

To solidify the testing results, another more statistically rigorous method, the Sobel test (1982), by which a

mediation hypothesis may be assessed, was also used. It provides a more direct test of an indirect effect. In the

case of simple mediation, the Sobel test is conducted by comparing the strength of the indirect effect of the

independent variable (X) on the dependent variable (Y) to the point null hypothesis, so that it equals zero.

Results from the Sobel tests indicated that the indirect effects of transformational leadership on OCB (z = 14.51,

p < 0.01) is in the anticipated direction and is statistically significant. Thus, Hypothesis 4-1 was supported.

The reduced effect of transformational leadership on affective commitment from 0.85 (p < 0.001) to 0.30

(p <0.001) confirms Hypothesis 4-2. Partial mediation holds in this case, too. Results from the Sobel test also

indicated the mediating role of trust in the leader in the relationship between transformational leadership and

affective commitment. The indirect effects (z = 8.08, p < 0.01) were statistically significant. Thus, Hypothesis

4-1 was supported.

Hypothesis 4-3, proposing that trust in the leader plays a mediating role in the relationship between

transformational leadership and job satisfaction, is confirmed in Tables 3 and 4. It can be seen in the table that

the three conditions for mediation are met, and the effect of transformational leadership on job satisfaction was

reduced from 0.89 (p < 0.001) in equation 2 to 0.34 (p < 0.001) in equation 3. Thus, the results show that

Hypothesis 4-3 is partially supported. The results of the Sobel test also reinforce the mediation role of trust in

the leader. The results indicate that the indirect effect of transformational leadership on job satisfaction (z =

9.61, p < 0.001) is in the anticipated direction and is statistically significant. Thus, Hypothesis 4-3 is supported

too.

Discussions and Conclusions

The purpose of the study was to investigate empirically the impact of transformational leadership on

organizational outcomes (OCB, OC, and job satisfaction), and the mediator role of trust in a leader in the

relationship between transformational leadership and organizational outcomes in Vietnamese employees. The

major findings of the study can be summarized as follows.

First, transformational leadership was found to have a significant relationship with organizational

citizenship behavior, organizational commitment, and job satisfaction. This was consistent with previous

research indicating that there was a positive and significant link between transformational leadership and

organizational outcomes.

Second, there was a positive relationship between transformational leadership and trust in the leader. This

indicates that the more a leader practices transformational leadership behavior, the greater is the possibility that

he or she will be trusted by the followers.

Third, as predicted, trust in the leader was positively significantly related to OCB, affective organizational

commitment, and job satisfaction. These findings suggest that trust in the leader might have a significant effect

on employee organizational outcome.

Fourth, a moderating role of trust in the leader was identified between transformational leadership and

organizational outcomes. This means that transformational leadership could indirectly affect employee’s

organizational outcomes through the mediation of trust in the leader as well as affecting them directly. A

transformational leader can be a precursor to trust in the leader and its impact on positive organizational

outcomes.

This study has several important theoretical and practical implications. Theoretically, the research


1080

framework used in the study may not so new. This study, however, confirms that much previous research on

transformational leadership and trust in Western cultures could also be generalized in the Vietnamese setting.

Regarding practice, research findings indicate that developing transformational leadership and trust is of

great importance in securing OCB, affective commitment, and job satisfaction in Vietnamese workers. The

potential benefits of transformational leadership and trust in leaders in Vietnamese companies have to be

attended to.

For the development of this type of leadership, two management practices can be specifically

recommended. First, the behaviors and competencies a transformational leader must exhibit have to be included

in the performance appraisal of a leader as an evaluation item. Trust in the leader also needs to be evaluated by

both the leader’s superiors and subordinates. To the extent the leaders feel these traits and behavior can be

evaluated by their superiors, and that the results can influence their salary and promotion, they would seek to

develop these positive traits and behaviors for themselves.

Second, official training courses to develop leadership competencies have to be designed and arranged for

supervisors and leaders so that they can learn how to implement transformational leadership and how to elicit

the trust of their subordinates. Regular and mandatory leadership training should be supplied to managers

across all levels, especially those just promoted to a manager position. The 360° feedback process may be a

factor in the effective implementation of the program.

The results of this study must be viewed in light of its limitations. First, most measures in the study used

self-reported ratings. This raises common method bias concerns. The result of Harman’s single-factor test using

confirmatory factor analysis in this study demonstrated that common method bias was not a critical problem.

However, such a technique only evaluates the extent to which common method bias may pose a problem

(Kandemir, Yaprak, & Cavusgil, 2006). Thus, using multiple sources of data is needed to minimize the problem

in future studies. Second, this study is based on cross-sectional data, which limits any causal interpretation

among variables. It should be expanded to a longitudinal study to obtain more concrete results. Third, the

generalizability of the findings may be limited by the Vietnamese sample used.

References Baron, R. M., & Kenny, D. A. (1986). The moderator–mediator variable distinction in social psychological research: Conceptual,

strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173-1182. Bartram, T., & Casimir, G. (2007). The relationship between leadership and follower in-role performance and satisfaction with the

leader: The mediating effects of empowerment and trust in the leader. Leadership & Organization Development Journal, 28(1), 4-19.

Bass, B. M. (1985). Leadership and performance beyond expectations. New York, N.Y.: Free Press. Bass, B. M. (1999). On the taming of charisma: A reply to Janice Beyer. The Leadership Quarterly, 10(4), 541-553. Bass, B. M., & Avolio, B. J. (1994). Improving organizational effectiveness through transformational leadership. Thousand Oaks,

C.A.: Sage. Bass, B. M., & Avolio, B. J. (1995). Transformational leadership development: Manual for the multifactor leadership

questionnaire. Palo Alto, C.A.: Consulting Psychologists Press. Bass, B. M., Avolio, B. J., Jung, D. I., & Berson, Y. (2003). Predicting unit performance by assessing transformational and

transactional leadership. Journal of Applied Psychology, 88(2), 207-218. Bennis, W., & Nanus, B. (1985). Leaders: The strategies for taking charge. New York: Harper & Row. Bogler, R. (2001). The influence of leadership style on teacher job satisfaction. Educational Administration Quarterly, 37(5),

662-683. Burns, J. M. (1978). Leadership. New York: Harper & Row.


1081

Conger, J., & Kanungo, R. (1998). Charismatic leadership in organizations. Thousand Oaks, C.A.: Sage Publications. Conger, J., Kanungo, R., & Menon, S. (2000). Charismatic leadership and follower effects. Journal of Organizational Behavior,

21(7), 747-767. Dvir, T., Eden, D., Avolio, B. J., & Shami, B. (2002). Impact of transformational leadership on follower development and

performance: A field experiment. Academy of Management Journal, 45(4), 735-744. Gabarro, J. J., & Athos, P. (1978). Interpersonal relations and communications. New York: Prentice-Hall. Gillespie, N. A., & Mann, L. (2004). Transformational leadership and shared values: The building blocks of trust. Journal of

Managerial Psychology, 19(6), 588-607. Goodwin, V. L., Wofford, J. C., & Whittington, J. L. (2001). A theoretical and empirical extension to the transformational

leadership construct. Journal of Organizational Behavior, 2(7), 759-774. Greenberg, J. (2005). Managing behavior in organizations. Upper Saddle River, N.J.: Prentice. Griffith, J. (2004). Relation of principal transformational leadership to school staff job satisfaction, staff turnover, and school

performance. Journal of Educational Administration, 42(3), 333-356. Hackman, J. R., & Oldham, G. R. (1975). Development of the job diagnostic survey. Journal of Applied Psychology, 60(2),

159-170. Hosmer, L. T. (1995). Trust: The connecting link between organizational theory and philosophical ethics. Academy of

Management Review, 20(2), 379-403. House, R. J., & Baetz, M. L. (1990). Leadership: Some empirical generalizations and new research directions. In L. L. Cumming,

& B. M. Staw (Eds.), Leadership, participation and group behavior (pp. 1-84). London: JAI Press. House, R. J., & Podsakoff, P. M. (1996). Leadership effectiveness: Past perspectives and future directions for research. In J.

Greenberg (Ed.), Organizational behavior: The state of the science (pp. 45-82). Hillsdale, N.J.: Erlbaum. House, R. J., & Shamir, B. (1993). Toward the integration of transformational, charismatic, and visionary theories. In M. M.

Chemers, & R. Ayman (Eds.), Leadership theory and research: Perspectives and directions (pp. 81-107). San Diego, C.A., US: Academic Press.

Hu, L., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation Modeling: A Multidisciplinary Journal, 69(1), 1-55.

Judge, T. A., & Bono, J. E. (2000). Five-factor model of personality and transformational leadership, Journal of Applied Psychology, 85(5), 751-765.

Judge, T. A., & Piccolo, R. F. (2004). Transformational and transactional leadership: A Meta-analytic test of their relative validity. Journal of Applied Psychology, 89(5), 755-768.

Jung, D. I., & Avolio, B. J. (2000). Opening the black box: An experimental investigation of the mediating effects of trust and value congruence on transformational and transactional leadership. Journal of Organizational Behavior, 21(8), 949-964.

Kammeyer-Mueller, J. D., & Wanberg, C. R. (2003). Unwrapping the organizational entry process: Disentangling multiple antecedents and their pathways to adjustment. Journal of Applied Psychology, 88(5), 779-794.

Kandemir, D., Yaprak, A., & Cavusgil, S. T. (2006). Alliance orientation: Conceptualization, measurement, and impact on market performance. Journal of the Academy of Marketing Science, 34(3), 324-340.

Konovsky, M. A., & Pugh, S. D. (1994). Citizenship behavior and social exchange. The Academy of Management Journal, 37(3), 656-669.

Lok, P., & Crawford, J. (2004). The effect of organizational culture and leadership style on job satisfaction and organizational commitment: A cross-national comparison. Journal of Management Development, 23(4), 321-338.

Lowe, K. B., Kroeck, K. G., & Sivasubramaniam, N. (1996). Effectiveness correlates of transformational and transactional leadership: A meta-analytic review of the MLQ literature. The Leadership Quarterly, 7(3), 385-425.

Mayer, R. C., Davis, J. H., & Schoorman, F. D. (1999). An integrative model of organizational trust. The Academy of Management Review, 20(3), 709-734.

Meyer, J. P., & Allen, N. J. (1991). A three-component conceptualization of organizational commitment. Human Resource Management Review, 1(1), 61-89.

Nooteboom, B., & Six, F. (2003). The trust process in organizations: Empirical studies of the determinants and the process of trust development. Cheltenham, England: Edward Elgar.

Organ, D. W. (1988). Organizational citizenship behavior: The good soldier syndrome. Lexington, M.A.: Lexington Books. Organ, D. W., & Konovsky, M. A. (1989). Cognitive versus affective determinant of organizational citizenship behaviour.

Journal of Applied Psychology, 74(1), 157-164.


1082

Organ, D. W., & Ryan, K. (1995). A meta-analytic review of attitudinal and dispositional predictors of organizational citizenship behavior. Personnel Psychology, 48(4), 775-802.

Parameswaran, R., & Yaprak, A. (1987). A cross-national comparison of consumer research measures. Journal of International Business Studies, 18(1), 35-49.

Pillai, R., Schriesheim, C. A., & Williams, E. S. (1999). Fairness perceptions and trust as mediators for transformational and transactional leadership: A two-sample study. Journal of Management, 25(6), 897-933.

Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879-903.

Podsakoff, P. M., MacKenzie, S. B., Moorman, R. H., & Fetter, R. (1990). Transformational leadership behaviors and their effects on followers’ trust in leader, satisfaction and organizational citizenship behaviors. Leadership Quarterly, 1(2), 107-142.

Rowold, J., & Heinitz, K. (2007). Transformational and charismatic leadership: Assessing the convergent, divergent and criterion validity of the MLQ and the CKS. The Leadership Quarterly, 18(2), 121-133.

Saracostti, M. (2007). Social capital as a strategy to overcome poverty in Latin America: An overview. International Social Works, 50(4), 515-527.

Tsui, A. S., Pearce, J. L., Porter, L. W., & Tripoli, A. M. (1997). Alternative approaches to the employee-organization relationship: Does investment in employees pay off? Academy of Management Journal, 40(5), 1089-1121.

Weber, M. (1947). The theory of social and economic organizations. (M. A. Henderson & T. Parsons, Trans.). New York: The Free Press.

Yukl, G. (2002). Leadership in organizations (5th ed.). Upper Saddle River, N.J.: Prentice Hall.


Bribery Problem in Kuwaiti Public Administration

Yousef Mohammad Al Mutairi, Mohammad Qasem Ahmad Al-Qarioti

Kuwait University, Kuwait, Kuwait

This empirical study examines the bribery problem in Kuwaiti public administration, its conception, magnitude,

reasons, and its consequences. The study is a field research which is based on a random sample consisted of (600)

people from various spheres of life in society. Study findings have shown that bribery in Kuwaiti administration is

widespread and increasing, transcends nationality, gender, position, education level, and agencies in Kuwait which

require paying attention to what kind of measures need to be taken to eradicate it. Recommendations are suggested

on ways how to eradicate this problem in order not to become a phenomenon.

Keywords: corruption, bribery, Kuwait, public administration, organizational behavior

Bribery is a very well-known problem which faces various communities, especially in the developing

countries. The present study examines this problem especially bribery practices of government officials in

providing illegal services and decisions in exchange of personal gains. The main objective of the study is to

identify magnitude, causes, and consequences of bribery in Kuwaiti administration, and what can be done to

eradicate this problem. The study is divided into four main parts: The first part is the introduction; the second part

provides a theoretical framework; the third part outlines the methodology and statistical methods used; the fourth

part states the study results in term of magnitude, forms, reasons, and consequences of bribery in Kuwaiti

administration. And the last part provides conclusions and recommendations.

Theoretical Framework

Bribery as a form of corruption faces many countries in the world regardless of political systems, or

development levels. It is prevalent practice in government departments and private companies, under various

forms to the extent that it is considered by most employees a part of their income (Jain, 2001). Some researchers

estimated bribes 12% of GDP (Gross Domestic Product) in countries like Nigeria, Venezuela, and Kenya

(Nwabuzor, 2005). Bribery takes various forms such as taking/giving someone money or benefit as an exchange

of illegal decisions. With regard to causes of bribery, many factors contribute to bribery such as weak adherence

to religious and social values, ineffective oversight and accountability over government officials, lack of equal

opportunities, poverty, and bad social conditions.

As far as the expected results of bribery, many negative consequences at the individual and social levels

such as (Lambsdorff, 2003; Meon & Weill, 2005; Caselli, 2005):

(1) Disrupting social values: bribery can lead to increasing public tolerance/acceptance of bribery which will

Yousef Mohammad Al Mutairi, Ph.D., Department of Public Administration, Kuwait University; research fields: public administration, public finance, public budgeting, organizational behavior. E-mail: [email protected].

Corresponding author: Mohammad Qasem Ahmad Al-Qarioti, Ph.D., professor, Department of Public Administration, Kuwait University; research fields: public administration, public policy, organizational behavior, human resources management, administrative reform. E-mail: [email protected].

D DAVID PUBLISHING

BRIBERY PROBLEM IN KUWAITI PUBLIC ADMINISTRATION

1084

be at the expense of public interest and can weaken institutional and national loyalty, which is harmful for society;

(2) Corrupting business environment as people will be obliged to pay bribes in order to get access to services

which will be to the detriment of community development;

(3) Wasting public resources through employing unqualified people which can result in losing talented

people, low productivity, and sacrifice public interest for the benefit of some influential groups. It is not hard to

imagine negative consequences when bribery reaches all sectors such as food, public utilities, construction, and

similar areas where wrong administrative decisions can be taken (Aidt, 2003).

Several measures can be taken to reduce the negative expected outcomes of bribery. Some of these measures

are:

(1) Promoting transparency in government as a means to reduce the exacerbation of bribery as transparency

sheds light on illegal practices of influential people and on employees who are involved in bribery. Some efforts

in this regard have been adopted by transparency organizations on the international and national levels which

carried out valuable studies on the problem, and on monitoring bribery-related issues (Transparency International,

and national branches of the organization in many countries, including Kuwait);

(2) Carrying awareness campaigns through various educational institutions, including religious institutions

to eradicate bribery and explain its negative aspects on society;

(3) Enhancing the role of various controlling political and judiciary agencies to oversight and take deterrent

measures against those involved in bribery cases.

Literature Review

Literature review did not find many empirical studies deal with bribery in Kuwait, Gulf Cooperation

Council (GCC) countries, or Arab countries due to the nature of such studies. Most studies were either

theoretical or religion oriented (Madkoor, 1997; Al Ghassab, 2011). This fact makes this study of special

importance as an important pioneer empirical research in this area. Nevertheless, some of the relevant research

in this sphere is mentioned below:

(1) Social Contract Center Study (2011): This study provides theoretical analysis of corruption practices in

Egypt, its direct and indirect causes which constitute a suitable environment cause of corruption in Egypt

before 25th revolution in 2011 and how to combat it;

(2) Al-Jaouni Study (2009): This is a statistical descriptive study of administrative and financial corruption

indexes in Arab countries as an explanation of poverty and underdevelopment in these countries. Study results

show that the highest average of corruption in Arab countries is 3.681 on the 10 points’ corruption index where

(0) refers to the highest point of corruption and (10) refers to the least level of corruption;

(3) Shehatah Study (1992): This psychological study discusses the relationship between bribery and

psychological personality characteristics of people who practice bribery. Study findings reveal that bribed

employees are over emotional, depressed, unable to deal with conflict, and weak;

(4) Aisaway Study (1992): This psychological study discusses reasons for bribery. Study findings show

that people who are involved in bribery are psychopathtic and suffer various kinds of phobia and low morale

and mostly work in services sector such as customs, passports, taxes, and finance departments;

(5) Bell, Peter, Frain, Felicity Marie, and Lauchs, Mark (2013): This paper explores the literature

surrounding the under-researched phenomenon of international bribery. It identifies significant gaps in the


1085

literature, in particular the effectiveness of policy approaches, the prevalence of international bribery, the

occurrence of private-to-private sector international bribery and a clear understanding of how this form of white

collar crime can effectively be detected, investigated, and prevented. Considering the definitions, impacts on

society, the policy approaches and difficulties in controlling white collar crime, and international bribery;

(6) Sabau and Elina Monica (2013): This paper shows the limits of the perception indexes issued by

Transparency International and World Bank Institute in assessing the audit risk or fraud risk at company level

and national economic environment. Instead, it presents an advanced econometric analysis for corruption level

assessment. It demonstrates that using factor analysis by auditors becomes an instrument of major importance

in determining accurate audit risk or fraud risk associated with national economic context;

(7) Zaloznaya and Marina (2012): This article explores the variation in bureaucratic bribery practices of

ordinary Ukrainians. It shows that participation in corruption is closely associated with actors’ exposure to

organizational cultures. Interviews with university-affiliated Ukrainians those students and professors acquire

crime-related definitions through encounters with institutionalized bribery mechanisms, conversations with

peers and colleagues with more substantial experience within specific universities, and observations of other

students and instructors. The article concludes with a brief discussion of the potential synthesis of differential

association and organizational theories as a powerful tool for the study of bureaucratic corruption;

(8) Nell and Mathias (2009): This paper argues from a legal perspective that contracts obtained by means

of bribery should be valid. Nullity and voidability decrease the incentive for voluntary disclosure, assist corrupt

actors with enforcing their bribe agreements, and provide leeway for abuse.

Thus, they run counter to effective anti-corruption. It is argued that other instruments are more suitable for

preventing corruption.

The Field Study

In order to achieve study objectives a random sample consists of (600) people was chosen from Kuwaiti

society which represent government officials, private sector employees, university students, retirees, and

business people. A pilot study on a sample of (30) individuals represent all groups has been conducted at the

outset to make sure of the clarity of the research tool and its consistency. The Cronbach coefficient was (0.78) for

all questions in the questionnaire which is consistent with the statistical standards. The second step which took

place in April 2012, was distributing questionnaires. A total number of (465) of completed questionnaires were

analyzed which represent (77.5%) of the sample size. The distribution of the sample is shown in Table 1 where

males constituted (59.8%), females (40.2%). According to age groups, 25-40 years old were (40.4%), less than

25 years old (30.1%), and (29.1%) 41 years old and more. Government employees constituted (21.7 %) of the

sample, employees in the private sector (22.8%), university students (17%), retirees (22.4%), and self-employed

(16.1%). With regard to nationality (73.1%) of respondents were Kuwaitis and (26.9%) non-Kuwaitis.

In order to analyze study results, the statistical package (SPSS, Version 20) was used to calculate

frequencies, percentages, means, standard deviations, and one Way Analysis of Variance. Besides that,

qualitative analysis of open questions was conducted.

Findings

Table 1


1086

Distribution of the Study Sample

Variable Frequency % 1. Identity

Government employees Private company employees University students Retirees Self-employed (Business People)

101 106 79

104 75

21.7 22.8 17 22 16.1

2. Age group Less than 25 years 25-40 years 41 years and more

140 188 137

30.1 40.4 29.5

3. Education Secondary Two years college First university degree Graduate study

74 97

241 53

15.9 20.9 51.8 41.4

4. Gender Male Female

278 17.8

59.8 40.2

5. Nationality Kuwaiti Non-Kuwaiti

340 215

73.1 26.9

Total 465 100

The Concept of Bribery

The first four questions in the questionnaire focused on the concept of bribery. The analysis shows that an

average statistical mean of responses to the first question if employees asked for or received bribery in

exchange of illegal services was (3.75) points on Likert’s five points scale as shown in Table 2, This result

reflects a high level of consensus among respondents on the conception of bribery.

Magnitude of Bribery

With regard to magnitude of bribery in Kuwaiti administration, responses to questions in this regard indicate

as shown in Table 3 that (32.3%) of respondents believe that bribery is prevalent at a level of 10-20% (26%) more

than 20%, and (24.1%) 10-20%, (13.3%) 1-5%, and (4.3%), less than 1%. These results mean that bribery is a

common practice in Kuwaiti public administration. This conclusion is substantiated by responses to question No.

6 with regard to the bribery practices in the public sector in comparison with the private sector. As Table 4 shows

that means on Likert’s scale with regard to bribery in the government sector is higher than the private sector

(3.91), higher among employees at higher levels (3.54), local business people are more aggressive in giving

bribes (3.55) in comparison with foreigners (3.40). With regard to gender, results show that male employees take

bribes (3.46) more than their female colleagues (2.56). Moreover, study results show that bribery is a common

practice in Kuwaiti administration (3.60), Kuwaitis and non-Kuwaitis take bribes (4.14) and bribery is higher for

non-Kuwaitis (2.56) than the Kuwaitis (2.32), though the mean of their belief that the state is serious in

eradicating bribery is only (2.99) points.

On Likert’s five points scale, means of respondents’ approval that Kuwaiti employees take bribes were

(2.32), non-Kuwaiti employees (2.56), and all employees (4.13). These findings show conclusively public

acceptance of bribery and non-Kuwaitis are more receptive to bribery than Kuwaiti employees. Moreover, it is

obvious that bribery is prevalent in all government agencies with a mean of (3.60). This conclusion is

substantiated as the mean of respondents’ approval that bribery is common in Kuwaiti administration was (2.71)


1087

points. With regard to the seriousness of government in fighting bribery, the study shows a mean of (2.99) which

reflects public skepticism of the seriousness of the state in this regard.

Table 2 Means and Standard Deviations of Responses Regarding Conception of Bribery

Question No. Mean Standard deviation

1 3.75 1.350

2 3.22 1.336

3 3.31 1.361

4 2.96 1.333

General mean 3.31

Table 3 The Level of Involvement in Bribery

% Frequency Degree of Involvement

4.3 20 Less than 1%

13.3 62 1-less than 5%

24.1 112 5-less than 10%

32.3 150 10-less than 20%

26 121 20% and more

100 465 Total

Table 4 Areas and Forms of Bribery Practices

Question No. Means Standard deviation

6 Bribery is practiced more in the public sector than the private sector 3.91 0.986

7 Bribery increases among higher administrative levels rather than lower levels 3.54 1.133

8 Local business people who give bribes to employees 3.55 0.948

9 Foreign business people present bribes to employees 3.40 1.011

10 Male employees receive bribes more than female employees 3.46 1.023

11 Kuwaiti employees receive bribes 2.32 0.993

12 Non Kuwaiti employees receive bribes 2.56 1.149

13 Kuwaiti and non Kuwaiti employees receive bribes 4.13 0.902

14 Bribery is a common practice in government agencies 3.60 1.044

15 Bribery increases in Kuwaiti administration 2.71 1.054

16 Bribery decreases in Kuwaiti administration 3.54 0.980

17 The Kuwaiti State is very serious in eradicating bribery 2.99 1.276

General mean 3.31

Consequences of Bribery

Study results reveal that bribery has many implications and can lead to great negative impacts on society,

which are in a descending order, as shown in Table 5:

(1) Corrupting work environment;

(2) Disrespect of public law;

(3) Hurting the image of government institutions;

(4) Sacrificing people’s rights;

(5) Weakening institutional loyalty;


1088

(6) Poor corporate performance;

(7) Weakening sense of citizenship.

Table 5

Consequences of Bribery Question No.

Consequences Mean Standard deviation

26 Poor corporate performance 4.4989 0.66994

27 Corrupting work environment 4.6215 0.61129

28 Weakening institutional loyalty 4.5075 0.74020

29 Hurting the image of government institutions 4.5699 0.70707

30 Weakening sense of citizenship 4.3957 0.82940

31 Loss of citizens’ rights 4.5570 0.72922

32 Disrespect of public law 4.6172 0.68207

General mean 4.53

High means of respondents’ approval of negative consequences of bribery reflects strong public belief how

harmful bribery can be on society on all fronts which necessitates serious efforts to eradicate this phenomenon.

The above mentioned results with regard to the four researched dimensions of bribery reveal, as shown in Table 6,

are compatible as the overall statistical means were for conception (3.31), magnitude (3.33), reasons (4.00), and

consequences of bribery on Likert’s five points scale (4.53).

Table 6

Means and Standard Deviations of the Various Dimensions of Bribery

Bribery dimensions Conception Magnitude Reasons Consequences

Mean 3.31 3.33 4.00 4.53

S.D. 0.965 0.451 0.568 0.527

Government Employees Engaged in Bribery

Study results show in a descending order public officials who take bribes work, as shown in Table 7, in the

following government agencies:

(1) Customs and Tax Administrations;

(2) Ministry of Interior;

(3) Ministry of Municipality;

(4) Ministry of Finance and related departments;

(5) Department of Prisons;

(6) Departments of Real Estate;

(7) Department of Tenders and Procurement practices;

(8) Ministry of Education and related Institutions;

(9) Judiciary/Prosecution;

(10) Ministry of Information and related Departments.

Admitting Bribery Practices

Study results as shown in Table 8 show that (14.8%) of respondents admit that they paid bribes to employees,

(78.7%) never paid bribes, and (6.5%) did not answer the question. These results indicate that bribery is a


1089

common practice in Kuwaiti administration.

Table 7 Frequencies and Percentages of Respondents Regarding Government Employees Who Take Bribes Rank Government agency Frequency %

1 Customs and tax agencies 367 78.9

2 Ministry of interior 366 78.7

3 Ministry of municipality 365 78.5

4 Departments of purchase, tenders, and practices 360 77.4

5 Ministry of finance 359 77.2

6 Department of prisons 357 76.8

7 Department of real estate registration 354 76.1

8 Ministry of education 351 75.5

9 Judiciary, prosecutors 347 74.6

10 Media institutions 345 74.2

Table 8 Admitting Paying Bribes

% Number Engagements in bribe

14.8 69 Paid bribes

78.7 366 Did not pay bribes

6.5 30 No answer

100 465 Total

Ways of Knowing About Bribery

Study results, as shown in Table 9, indicate that (12.7%) of respondents mention that government officials

demanded bribe, (40.9%) knew about bribes from others, and (3.1%) took the initiative to pay bribes to facilitate

their transactions, and (43%) did not know about bribery.

With regard to the amounts paid as bribes, study results, as shown in Table 10, reveal that (4.5%) of

respondents mentioned that they paid less 10 KD (Kuwaiti Dinar), (1.7%), (10-20 KD), (6.9%) (20-50) KD, and

(7.7%) more than (50) KD. Findings show that (7.7%) of respondents paid more than (50 KD), and (6.9%) paid

(20-50) KD.

Table 9 Ways of Knowing About Bribes

% Number How knew that I have to pay bribes

13.1 61 From employees

40.9 190 From ordinary people

3.0 14 By myself

43.0 200 Did not pay bribe

100 465 Total

With respect to previous knowledge of those who paid bribes that this is unlawful and constitutes a crime,

the study, as shown in Table 11, indicates that (77.8%) of respondents knew that bribery is illegal, (9.9%) did

not know that bribery is illegal, and (12.3%) did not answer the question.

Table 10 Amounts of Bribes

% Number Amount in KD


1090

78.7 366 Did not pay

4.7 22 Less than 10 KDs

1.9 9 10-less than 20 KDs

6.9 32 20-less than 50 KDs

7.7 36 50 KDs or more

100 465 Total

Table 11 Previous Knowledge That Bribe Is Illegal

% Number Knowing that bribe is illegal

77.8 362 Know

9.9 46 Do not know

12.3 57 Not sure

100 465 Total

Study findings show that 77.8% of respondents knew that paying bribe is a crime but nevertheless paid

bribes which reflect social tolerance of bribery.

Reasons for Bribery

With regard to reasons of bribery in Kuwaiti administration, the study identifies as shown in Table 12,

many reasons which are, in a descending order, as follows:

(1) Lack of religious faith;

(2) Weak control;

(3) Greed;

(4) Lack of legal penalties;

(5) Complication of procedures and red tape;

(6) Social tolerance of bribery;

(7) Lack of legal education;

(8) Low income.

Table12 Reasons of Bribery Question No. Reason Mean Standard deviation

18 Weak of control 4.3677 0.80692

19 Lack of legal penalties 4.1355 0.99834

20 Low income 3.6323 1.19095

21 Greed 4.1548 0.88187

22 Social tolerance of bribery 3.6968 1.14681

23 Lack of adherence to religious values 4.4882 0.82287

24 Lack of legal education 3.6946 1.14718

25 Complicated procedures and red tape 3.8860 1.16427

General mean 2.98

Bribery and Personal Characteristics

In order to see relationships between bribery and personal characteristics correlation analysis was conducted.

The analysis revealed as Table 13 shows weak positive relationships between gender, magnitude, reasons and

negative relationships with conception and effect of bribery.


1091

Table 13 Correlation of Concept, Magnitude, Reasons, Effect of Bribery and Personal Characteristics Conception Magnitude Reasons Effect Gender Pearson correlation

-0.120

0.033

.016

-0.003

Significance level. (2-tailed) 0.010* 0.475 .731 0.948

Number of cases 465 465 465 465 Age Pearson correlation

0.094

0.000

-0.011

0.018

Significance level. (2-tailed) 0.042** 0.993 0.814 0.693

Number of Cases 465 465 465 465 Education Pearson correlation

0.118

0.038

0.070

0.133

Significance level. (2-tailed) 0.011** 0.417 0.134 0.004

Number of Cases 465 465 465 465 Workplace Pearson correlation

-0.010

0.030

0.169

0.085

Significance level. (2-tailed) 0.824 0.518 0.000** 0.068

Number of Cases 465 465 465 465 Nationality Pearson correlation

-0.053

-0.049

-0.110

-0.014

Significance level. (2-tailed) 0.252 0.293 0.018** 0.757

Number of Cases 465 465 465 465

Notes. * Correlation is significant at the 0.01 level (2-tailed); ** Correlation is significant at the 0.05 level (2-tailed).

In order to see relationships between administrative levels, gender, and bribery, a correlation analysis was

conducted. The analysis revealed as Table 14 shows, positive relationship (0.100 *) between conception of

bribery and administrative level, and insignificant positive relationship (0.028) between bribery and gender.

To examine whether bribery varies with personal characteristics, ONE WAY ANOVA was conducted. As

shown in Table 15, the conception of bribery only varies at a statistically significant level among respondents

according to gender but not its magnitude, reasons, or consequences.

Table 14 Correlations Between Conception of Bribery, Administrative Level, and Gender

Correlation Coefficient Conception of Bribery

Pearson correlation 0.100*

Significance level. (2-tailed) 0.032

Number of cases 465

Gender

Pearson correlation 0.028

Significance level. (2-tailed) 0.546

Number of cases 465

Note. * Correlation is significant at the 0.05 level (2-tailed).

With regard to respondents’ views toward bribery with regard to age, study results, as shown in Table 16,

reveal no variation at any statistically significant level in conception, magnitude, reasons, or consequences of

bribery.

Table 15


1092

One Way Variance of Perception, Magnitude, Causes, and Consequences of Bribery According to Gender

Sum of squares Df Mean square F Significance level

Conception

Between groups 6.216 1 6.216 6.747 0.010*

Within groups 426.506 463 0.921

Total 432.721 464

Magnitude

Between groups 0.105 1 0.105 0.511 0.475

Within groups 94.661 463 0.204

Total 94.765 464

Causes

Between groups 0.038 1 0.038 0.118 0.731

Within groups 150.033 463 0.324

Total 150.071 464

Consequences

Between groups 0.001 1 0.001 0.004 0.948

Within groups 129.242 463 0.279

Total 129.243 464

Note. * Statistically significant at the level of significance (0.05).

Table 16

One Way Variance of Conception, Magnitude, Causes, and Consequences of Bribery According to Age

Sum of squares Df Mean square F Sig.

Conception

Between groups 3.947 2 1.973 2.126 0.120

Within groups 428.774 462 0.928

Total 432.721 464

Magnitude

Between groups 0.054 2 0.027 0.133 0.876


Total 94.765 464

Causes

Between groups 0.259 2 0.130 0.399 0.671

Within groups 149.812 462 0.324

Total 150.071 464

Consequence

Between groups 0.060 2 0.030 0.107 0.899

Within groups 129.183 462 0.280

Total 129.243 464

As far as respondents’ views of bribery due to level of education, study results, as shown in Table 17,

indicate that responses vary at a statistically significant level with regard to conception and consequences but

not to magnitude and causes of bribery.

With respect to respondents’ views of bribery due to type of agency, study results, as shown in Table 18,

indicate variations at statistically significant levels with regard to conception and causes but not to magnitude and

consequences of bribery.

Table 17

One Way Variance of Conception, Magnitude, Causes, and Consequences of Bribery According to Education


Conception

Between groups 12.570 3 4.190 4.597 0.003*

Within groups 420.151 461 0.911

Total 432.721 464


1093

(Table 17 continued)


Magnitude

Between groups 0.281 3 0.094 0.457 0.712


Total 94.765 464

Reasons

Between groups 1.151 3 0.384 1.188 0.314

Within groups 148.920 461 0.323

Total 150.071 464

Consequences

Between groups 2.427 3 0.809 2.940 0.033*

Within groups 126.817 461 0.275

Total 129.243 464


Table 18 One Way Variance of Conception, Magnitude, Causes, and Consequences of Bribery According to Agency Sum of squares Df Mean square F Sig.

Conception

Between groups 10.003 4 2.501 2.721 0.029*

Within groups 422.718 460 0.919

Total 432.721 464

Magnitude

Between groups 0.211 4 0.053 0.256 0.906


Total 94.765 464

Causes

Between groups 4.816 4 1.204 3.813 0.005*

Within groups 145.255 460 0.316

Total 150.071 464

Consequences

Between groups 2.080 4 0.520 1.881 0.113

Within groups 127.163 460 0.276

Total 129.243 464


With regard to variations in respondents’ views of bribery due to nationality, study results, as shown in

Table 19, show that respondent’s views vary at statistically significant levels only in magnitude but not in

conception, causes, or consequences of bribery.

Table 19 One Way Variance of Perception, Magnitude, Causes, and Consequences of Bribery According to Nationality Sum of squares Df Mean square F Sig.

Conception

Between groups 1.228 1 1.228 1.318 0.252

Within groups 431.493 463 0.932

Total 432.721 464

Magnitude

Between groups 0.227 1 0.227 1.110 0.293


Total 94.765 464

Causes

Between groups 1.813 1 1.813 5.663 0.018*

Within groups 148.258 463 0.320

Total 150.071 464

Consequences

Between groups 0.027 1 0.027 0.096 0.757

Within groups 129.216 463 0.279

Total 129.243 464



1094

Conclusions and Recommendations

Conception and Magnitude of Bribery in Kuwaiti Administration

As shown in Table 6, there is common conception of bribery (3.31), its magnitude (3.33), causes (4.0), and

consequences (4.53). Moreover, 21.3% of respondents agree that bribery as an illegal practice means that

government officials benefit and make personal gains from people in exchange of favors or services they provide

to them.

There is consensus among respondents that bribery is more widespread in the government sector than the

case in the private sector due to the discretionary powers which public servants enjoy which tempt them to use for

personal interests by accepting bribes. Moreover, study results show that bribery is practiced by both local and

foreign businessmen. This conclusion is substantiated by a positive correlation (0.10*) at a statistically

significant level between employees’ administrative level and engagement in bribery.

Study results show that 13.8% of respondents think that bribery is widespread in all government agencies

and 12.2% think it is increasing, 56.6% of think that non Kuwaitis take bribes. Moreover, study results show that

17.6% of respondents think that bribery practices in Kuwaiti society range from 10%-20%, (58.3%) 1—less than

5%, and (24.1%) 5%-10%.

Study findings show that 36.1% of respondents think that the state is not serious enough in fighting bribery,

and 27.1% did not have a clear opinion on the subject.

Causes of Bribery

As far as reasons of bribery in Kuwaiti administration, study findings show in a descending order several

causes which are as follows:

(1) Lack of adherence to religious values;

(2) Weak control;

(3) Greed;

(4) Lack of legal penalties;

(5) Complication of work procedures;

(6) Social tolerance of bribery;

(7) Lack of legal education;

(8) Low income.

Consequences of Bribery

Study results show low level of public awareness in society of the negative consequences of bribery on

society as only 1.1% of respondents think that bribery weakens institutional performance of government

institutions, 1% think that bribery spoils work environment and decrease institutional loyalty, 2.1% bribery

distorts government’s image and weakens sense of national belonging, 2.4% think it sacrifices public interest

and private rights, and 2.1% think its contributes to the dissemination of a culture of disrespect for the law.

Which Government Agencies Are Engaged in Bribery

Study findings show categories of employees which were involved in bribery practices. These categories

which are in different types of government agencies are in a descending order as follows:

(1) Departments of customs and tax;

(2) Ministry of interior;


1095

(3) Ministry of municipality;

(4) Ministry of financial and related departments;

(5) Department of prisons;

(6) Department of real estate;

(7) Department of tenders and procurement practices;

(8) Ministry of education;

(9) Judiciary/Prosecution departments;

(10) Ministry of information and related departments.

Ways of Knowing About Bribery

Study results show that 12.7% of respondents mention that employees asked them directly to pay bribes,

40.9% knew from others that they need to pay bribes, 3.1% reported that they themselves offered employees

bribes to facilitate their transactions, and 43% did not go through the experience of bribery. With regard to

amounts paid as bribes, study results showed that 4.5% of respondents mentioned that they paid less than 10 KD,

1.7% (10-20 KD), 6.9% (20-50 KD), and 7.7% paid more than (50 KD). This shows that the largest percentage of

those who paid a bribe, 7.7% paid more than (50 KD), followed respectively 6.9% by those who paid (20-50 KD).

Knowledge of Illegality of Bribery

Study results show that (77.8%) of respondents mention that they knew that bribery is a crime punishable by

law, (9.9%) did not know that it was a crime, and (12.3%) did not respond. These results show that Kuwaiti

society tolerates bribery and does not see it a serious problem.

Personal Characteristics and Bribery

With regard to the relationships between personal variables and bribery, study findings show that

respondents view on bribery do not vary due to gender but only in its conception. This might be explained by

prevailing cultural norms which make men have more access to bribery practices than women. Likewise,

variations at statistical significant levels were found in respondents’ views only on the conception and

consequences but not on magnitude and causes of bribery according to education level. This can be explained as

highly educated respondents are more aware of bribery practices and its negative results on society than less

educated employee. As far as nationality is concerned, study results show that respondent’s views vary at

statistically significant levels only in their view of magnitude of bribery but not in its conception, causes, or

consequences. This might be explained because Kuwaitis have more access to information regarding bribery

practices than non-Kuwaitis.

In the light of study findings, some recommendations can be suggested. Government agencies have to exert

intensive efforts to raise public awareness of the seriousness of bribery and its negative repercussions on society.

Such efforts are of prime importance at a time where Arab countries face social and political unrest which

represent the most serious manifestations against corruption, injustice, inequity, and bribery which come on top

list of slogans in demonstrations against governments. The roles of media and religious institutions are of prime

importance in this regard as the study shows social tolerance of bribery and lack of adherence to religious values.

It is important to hold a national conference on the problem of bribery in Kuwait to shed light on this

problem them and discuss way to eradicate this serious problem. Conducting training programs, seminars, and

workshops which focus on bribery as a crime and its adverse effects on the image of the government, its

employees, and on society at large are necessary. This is important in view of study findings of positive


1096

relationship between administrative level and bribery, which hold top administration a special responsibility to

address this problem.

It may be important to reconsider salary scales for non-Kuwaitis as study findings show that 56.6%

of respondents mention that non-Kuwaitis take bribe and one reason for this is low income. It is

illogical to discriminate in salaries paid for the same job as this might be taken as justifications for taking

bribes.

Government agencies must simplify procedures, prepare and distribute brochures to service

recipients stating their access rights to services, and specify documents, conditions, and time needed for

getting the service, and what they can do in the event of a delay of service. This would reduce people’s

resort to pay bribes to get services. This is important because study findings show that people’s ignorance

of their rights besides complicated procedures come in the third and fourth ranks as reasons for paying

bribes.

Reconsideration of legislations which relate to the penalties for bribery and tightening sanctions, as study

findings show that despite the majority of employees learned that receiving bribery is illegal but

nevertheless they take bribes. This explains the lack of deterrent penalties which came in fifth place as

one of the reasons of bribery. Tightening internal and external government control and lawful penalties for

employees who take bribes, because study findings show that the weak oversight comes as the sixth cause of

bribery.

References Aidt, T. S. (2003). Economic analysis of corruption: A survey. Economic Journal, 113(491), 632-652.

Aisaway, T. A. M. (1992). The most important factors responsible for bribery behavior (An MA thesis of Psychology). Egypt:

Tanta University.

Al Ghassab, A. B. N. (2011). The Sharia approach in protecting society from financial and administrative corruption. Naïf Arab

University for Security Sciences, Riyadh. Saudi Arabia.

Al-Jaouni, F. K. (2009). A statistical descriptive analytical study of administrative and financial corruption indexes and its effect

on human development index: An empirical study on Arab countries. Damascus University Journal for Economic and Law

Sciences, 25(2), 117-195.

Bell, P., Frain, F. M., & Lauchs, M. (2013). Investigating international bribery and the applicability of routine activity theory: A

literary review. International Journal of Business and Commerce, 2(10), 79-94.

Caselli, F. (2005). Accounting for cross-country income differences. In P. Aghion, & S. Durlauf (Eds.), Handbook of economic

growth. Amsterdam: Elsevier.

Jain, A. K. (2001). Corruption: A review. Journal of Economic Surveys, 15(1), 71-211.

Lambsdorff, J. G. (2003). How corruption affects productivity. Kyklos, 56(4), 457-474.

Madkoor, H. (1997). Bribery crime in Islamic jurisprudence: A comparative study. Alexandria: Alexandria

University.

Meon, P. G., & Weill, L. (2005). Does better governance foster efficiency? An aggregate frontier analysis. Economics of

Governance, 6(1), 75-90.

Nell, M. )2009( . Contracts obtained by means of bribery: Should they be void or valid? European Journal of Law and Economics,

27(2), 159-176.

Nwabuzor, A. (2005). Corruption and development: New, initiatives in economic openness and strengthened rule of law. Journal

of Business Ethics, 59(1-2), 121-138.

Sabau, E. M. (2013). Corruption and bribery assessment: Econometrics algorithms and perception index. Management &

Marketing Challenges for the Knowledge Society, 8(1), 209-227.

Shehatah, M. R. M. (1992). Bribery psychology: A study of personality and social socialization of bribed employees (An MA


1097

thesis of Psychology). Egypt: Ain Shams University.

Social Contract Center. (2011). Reasons of corruption in Egypt before June 25, 2011: Towards a futurist perspective for

preventing and combating bribery. Cairo.

Zaloznaya, M. (2012). Organizational cultures as agents of differential association: Explaining the variation in bribery practices in

Ukrainian universities. Crime Law Social Change, 58, 295-320.


Management Control, Performance Factor in Moroccan

Universities “Case of the University Hassan I of Settat”

Fatima Ouahraoui, Mohamed Makhroute, Nada Soudi, Said Elmezouari

National Business School, Settat, Morocco

University of Hassan I, Settat, Morocco

Laila Loukili Idrissi

University of Hassan I, Settat, Morocco

The reform of higher education and the promulgation of the Law 01-00 in 2000 were a solid foundation of

governance renovated in Moroccan universities. In 2009 the emergency plan has come to supplement and reaffirm

the achievements of this reform. Indeed, following the deployment of the emergency plan and the introduction of an

approach to contracts and projects in public education, Moroccan universities have moved from a logic means to a

logic of results. Faced with this situation, and in order to ensure effective control, effective and efficient emergency

plan, management control is then the “backbone” to meet the challenge of all reforms and make successful its

deployment.

Keywords: emergency plan, university reform, contracting, management control

Moroccan universities are now facing a number of changes that affect their missions and modes of

operation, whether in economic, social, or cultural levels. Their environment has become increasingly

competitive and demanding both in terms of quality of basic services as their modes of governance.

Indeed, the reflection and the desire to renovate the university governance in Morocco and implement a

modern management in the university are not new.

Several innovative projects have translated this willingness. On one hand the Law 01-00 enacted by Dahir

No. 1-00-199 of 19 May 2000, on the organization of higher education, through the Law 69-00 promulgated by

Dahir No. 1-03-195 of 11 November 2003 organizing the financial control procedures of the state owned

enterprises (including universities). On the other hand the 2009 emergency plan with an approach to

management by objective.

Fatima Ouahraoui, Ph.D. candidate in National Business School (University of Hassan I); research fields: management control

in public organizations, new public management, university governance. E-mail: [email protected]. Corresponding author: Mohamed Makhroute, Ph.D. candidate in National Business School (University of Hassan I); research

field: financing of private organizations. E-mail: [email protected]. Nada Soudi, Ph.D. candidate in National Business School (University of Hassan I); research field: innovation in organizations.

E-mail: [email protected]. Said Elmezouari, Ph.D., professor in National Business School (University of Hassan I); research fields: financial, accounting

and management control. E-mail: [email protected]. Laila Loukili Idrissi, project officer to the president of University of Hassan I; research field: university governance. E-mail:

[email protected].

D DAVID PUBLISHING

CASE OF THE UNIVERSITY HASSAN I OF SETTAT

1099

Establishing a contractual logic of development in Moroccan universities, the emergency plan is

project-based contracts under the plan.

From this perspective, the emergency plan came with a management approach that allows the university a

management by objectives, whose achievement is sanctioned by the budgets allocated by the Ministry of

Higher Education, negotiated with the Ministry of Finance and disbursed according to the objectives achieved.

To this end, the Moroccan university has grown from a logic of means to a logic of results, based on a

particular performance management to promote a dialogue management.

Face looking proclaimed performance, university presidents are thus led to set up a government renovated.

Management control appears as the “spearhead” of all reforms.

This communication describes an experience in a Moroccan university. These are mainly:

(1) Describing one’s experience with the new approach to management by objectives, in terms of budget

execution, and monitoring qualitative and quantitative performance indicators;

(2) Show through the constraints faced by the university, the usefulness of setting up a management

control system that meets current needs and future of good university governance as part of the logic of contract

brought by the plan emergency.

Our research was conducted at the University of Hassan I, one of the youngest Moroccan universities

hosting more than 11,000 students and public institutions including six multidisciplinary namely:

(1) Faculty of Science and Technology (FST) in Settat;

(2) The National School of Business and Management (ENCG) in Settat;

(3) The Faculty of Law Economics and Social science (FSJES) in Settat;

(4) Faculty polydisciplinary (FPK) in Khouribga;

(5) The National School of Applied Science (ENSA) in Khouribga;

(6) The Higher School of Technology (EST) at Berrchid.

On the theoretical level, it is proposing a reflection on a model of management control in terms of the

levers of control model developed by Simons (1995), as part of a process of diagnostic and interactive control

of a new university governance.

Methodologically, the research is based on a constructivist approach, in which the model is not given a

priori, but is subject to a process of social construction, for all the actors involved in the project. It fit also as

part of a research intervention referred transformative. The tools used are the literature review, interviews with

stakeholders of the university and the department, and working sessions with project coordinators involved in

the emergency plan.

After having discussed the Moroccan university governance, the forms of its organization of monitoring

and evaluation as well as the contribution of the emergency plan as a new mode of governance, It will show the

issues of management control through the case of the University of Hassan I, the results will take it back to

provide a reflection on a model of management control adapted to the strategic stakes of the university.

The University Governance in Morocco: The Organizational Arrangements and Methods of Control

In practical terms, the notion of governance refers to the idea of operating a management style. This mode

of management has progressed from private to public company expected to improve results.

However, the adoption of a management style requires an organization in the structure of decisions and


1100

actions as well as a monitoring and evaluation devices.

The organizational arrangements of universities: the provision of the Law 01-00.

The promulgated Law 01-00 by the Dahir No. 1-00-199 of 19 May 2000, has a principal objective, that of

organizing the higher education in Morocco.

In the Article 4 of Law 01-00, the universities are established by law in accordance with Article 46 of the

Constitution. They are public institutions with legal personality and administrative and financial autonomy.

They are placed under the guardianship of the state.

The Missions of the University

In addition to their academic training missions and scientific research, the law of 01-00 has strengthened

the role of the university by reforming the Moroccan system of higher education, to be adaptabe to the

international standards of quality and relevance of performance.

The law has extended the missions of the university, giving it more flexibility and action to develop,

allowing them to:

(1) Ensure the provision of services for consideration;

(2) Create innovative business incubators operating in patents and licensing and marketing the products of

their activities;

(3) Make investments in public and privat;

(4) Create subsidiary companies in the economic, scientific, and Cultural domaines (Article 7 of Law

01-00).

The Management Bodies of the University

Universities are managed by a board of the university governing body on all matters relating to missions

and the functioning of the university (Section 12).

It consists of several members and is chaired by the university president and a board management that is

responsible for administrative and financial affairs of the university.

The Staff of Universities

Section 17 of the Act provides that the personal status of universities and their benefits system are fixed by

decree, which limits the autonomy of universities in human resource management.

The Accounting and Financial Management of Universities

The Moroccan university as a public organism, is submitted to the rules of the public accounting under the

provisions of Royal Decree No. 330-66 of 21 April 1967, which states that financial obligations to public

officers and public accountants.

The authorizing public revenue and expenses, being the president of the university, has the capacity to

initiate, record, liquidate, or order the recovery of a debt or the payment of a debt. The public accountant, is a

civil servant with the quality to execute on behalf of the university operations revenues, expenses, or handling

of securities.

The higher education institutions belonging to the university do not have moral personality, they are not

competent to order or to see the revenue or expenses, the university president has to delegate his signature to

the heads of institutions as sub-officers.

However, the revenues of universities are composed mainly of government grants, fees collected under


1101

continuing education, products and profits from the work of research and services, including the work of

expertise, products and profits from its operations and its heritage. While expenses include salaries and

allowances treatments served to staff, capital expenditure and operating (Article 18 of Law 01-00).

The Arrangements for Monitoring and Evaluation of Universities

The Law 69-00 of the Dahir No. 1-03-195 of 11 November 2003 concerning the financial control of the

state-owned enterprises and other organizations, has come to:

(1) Ensure regular monitoring of the management of organizations subject to financial control;

(2) Ensure the consistency of its economic and financial operations in terms of legal;

(3) Assess the quality of their management of economic and financial performance and compliance of their

management missions and objectives assigned to them;

(4) Work to improve their information systems and management.

The Moroccan university, a public institution with legal personality and financial autonomy is vested with

a public mission of serving the public purse.

Since universities do not have eligibility criteria which are an information system and management

performance1 including: a status of personnel, an organizational chart, a manual procedure and organization,

proper accounting, sincere and a certified Rules markets, a Multi-Year Plan and an annual management report

or a plan contract, it is subject to due diligence performed by the management of public enterprises and

privatization. This implies that a controller of the state, under the Ministry of Finance controls the operations,

while a paymaster validates spending and approval of strategic documents of the institution is given broadly to

the ministry.

The Emergency Plan: Toward a Renovated Governance of the Moroccan University

The emergency plan is the result of an inventory that reflects the mismanagement and misconduct of the

missions of the university.

The Context of Developing the Emergency Plan

Being on a number of evaluation reports, including the report of the Board of Higher Education in 2008

(CSE2), the education sector in Morocco is considered more difficult to know:

(1) A mismatch between the university and the labor market, the unemployment rate for graduates of higher

education is the highest compared to other categories of graduates. The average rate of 26% between 1999 and

2006 (43.6% for holders of advanced degrees) Report of the CSE 2008;

(2) An inconsistency between the private sector and mass selective studies in guidance from the high school

degree (baccalaureat). Seventy eight percent of graduates of the academic year 2006/2007 are branches of

literary and social science (CSE Report 2008);

(3) Insufficient infrastructure, the local university and training materials and human resources.

Given these facts, a royal decision was made to develop an emergency plan aimed at accelerating the

implementation of the reform over the next four years.

In response to the royal speech, the Ministry of National Education of Higher Education and Vocational

1 Abdelaziz Talbi: Ex-Director of public entreprises and privatization “meeting MENA-OCDE on corporate governance in public enterprises Rabat, September 14-15, 2005”. 2 National body to evaluate the system of education and training; chaired by Majesty King Mohammed VI.


1102

Training have initiated the development of a strategic review of education sector, through a consulting firm.

The said firm gave a report on strategic diagnosis of school education, higher education and vocational

training, which after approval of all concerned, namely the universities and the ministry, were the subject of a

plan action four-year plan called emergency.

The Emergency Plan was presented as organized around four areas of action each containing a set of

projects. Moreover, the adoption of a method of working out with those previously declined proved crucial.

The approach sat well on key levers:

(1) The definition of an ambitious plan outlined in great detail: areas of intervention, projects, action plans,

planning, resources;

(2) The adoption of a logical process, which has to involve all major players in the system of Education and

Training in the development of the Emergency Plan;

(3) The involvement of field actors to ensure declination “proximity” of each measure identified and ensures

the practical feasibility;

(4) The development of a tracking device that will close the best possible control of the implementation of

actions.

Emergency Plan Introduces the Logic of Contracting at the University

Following on the guiding principles and objectives set by the 2008 report of the CSE, 12 projects have

been identified for higher education and scientific research and this through three areas of intervention:

Area 1: To stimulate the initiative and excellence in high school and university:

Project 12: Promoting excellence;

Project 13: The development of the supply of higher education;

Project 14: Promotion of Scientific Research.

Area 2: Addressing cross-cutting issues of the system:

Project 15: Capacity building of staff of the University;

Project 16: Improving the governance of the University and strengthening its autonomy;

Project 17: Optimization of human resources management.

Area 3: Providing the means to succeed:

Project 18: Completion of the implementation of devolution/decentralization and optimizing the

organization of the Ministry;

Project 19: Planning and Management System of Education and Training;

Project 20: Language skills;

Project 21: Establishment of a system of efficient information and guidance monitoring and evaluation of

staff;

Project 22: Optimization and sustainability of financial resources;

Project 23: Mobilization and communication around the university.

For each project identified a form of operationalization was developed defining measures, strategic

objectives, indicators and resource mobilization.

Three fundamental principles of autonomy, professionalism and contracts were used as a guideline for

the design and articulation of the goals of the plan to meet the real needs of universities in terms of

infrastructure, diversification of training, promotion excellence, governance and openness to the


1103

socio-economic environment.

The universities have developed their plans for facilities in accordance with the principles, aims,

objectives, and measures of the Emergency Plan. These projects have been translated into concrete actions,

budgeted and which were planned in the period 2009-2012. They are subject to a four-year contract between

the State and the Universities.

To this end, the new contracting approach will strengthen the role of universities in the training of skills

for socio-economic development and position in the devices support the major projects of reform and sectoral

development conducted by the state.

The commitments of the universities as part of their contracts for the period 2009/2012 focused in

particular:

(1) The extension and upgrade university infrastructures;

(2) The development and diversification of the supply of training and orientation to the scientific, technical and

professional making sure this effort contributes to economic and social development at regional and national levels;

(3) Improving the quality of university education and the effectiveness of the university education system in

terms of internal and external efficiency;

(4) Promotion of scientific research and improving its governance and visibility of its performance;

(5) Optimizing the use of resources and institutional capacity building of governance of the University to

consolidate its independence.

In part against the state is committed to making available university the necessary means to achieve the

fixed objectives which include 12.6 billion Dirhams and 2,400 budget items over four years.

The implementation of these contractual commitments is accompanied by a monitoring and evaluation

built around the following axes:

(1) Monitoring committees of evaluation:

a. An internal committee at the University;

b. A central committee at the Ministry.

(2) Periodic reporting:

a. A progress report on the progress;

b. An annual report on the review of achievements.

(3) A set of indicators for monitoring (frequency biannual).

(4) An annual action plan.

(5) A process central to assessing the degree of achievement of objectives, proposals for improving

performance and direction of budgetary subsidies.

The Emergency Plan: Situation Case of University Hassan I

University Hassan I, one of the 15 universities that have signed the development contract with the

government represented by the Ministry of Higher Education Professional Training and Scientific Research and

the Ministry of Finance and privatization.

In addition to national objectives, development contracts reflect the university mission and strategy of

universities in the short to medium term, each according to his own vision of development that takes into

account the specific economic and social environment.

For this reason, the achievement of contract on which they are incurred directly translates into achieving


1104

their missions and their successful development strategy.

In our case it will try to highlight the experience of the University Hassan I, and it will try to show through

an example project, the Derg in achieving its objectives, commitment of budgets and monitoring its indicators.

The contract management tool case of the University Hassan I. The establishment of contracts is an act

of participatory management, which empowers the signatories and associates to the level of implementation

decisions.

University Hassan I in the person of its president signed a four-year plan beginning in 2009, with the

Ministry of Economy and Finance which is aimed at large development and upgrade University Hassan I.

The contract is for defining the commitments of the signatories for the implementation of the 2009-2012

development plan, integrating the project specific Emergency Plan at the University Hassan 1 of Settat. The

contract also defines the means required for this implementation and the monitoring and evaluation.

1. The commitments of the University.

The University will implement its development plan in order to achieve the targets of the emergency plan

details, by year, with a special focus:

(1) The development of the supply of higher education;

(2) Improved internal and external efficiency of the system;

(3) Promotion of scientific research;

(4) Capacity building of staff of the University through the implementation of a continuing education plan;

(5) Improving the governance of the University and strengthening its independence.

Thus, these goals are translated into targets, their translation appears as follows:

2. The commitments of the State.

The State undertakes to allocate at the University grants and capital and operating budget items necessary

for the implementation of the objectives of this contract. The commitments of the state subsidy and budget

items are stopped as follows (see Table 1 and Table 2):

Table 1

Grants Budget (in Millions of Dirhams)

2009 2010 2011 2012

Investissement 55 49 27 32

Fonctionnement 30 36 43 51

Total 86 85 70 84

Table 2

Budget Items

2009 2010 2011 2012

Postes budgétaires annuels 19 31 27 26

To achieve these projects, a resource team made up of vice presidents of the university and heads of

institutions under the university and coordinated by the university president, was set up in addition to an ad hoc

after the university council has been formed to monitor and review the various proposed projects (see Table 3).

The diagnosis of the situation after two years of signing the contract will enable the university to know the

strengths and weaknesses, and the foreseeable difficulties.

It will provide the information necessary for the establishment of a system of management control.


1105

Table 3

Details of Contractual Objectives 2009-2012 Year

Objectives and measurement indicators

Target values

2008-2009 2009-2010 2010-2011 2011-2012 2012-2013

1. Registration of students per school:

-Number of new students:

Institutions with open access (BAC):

Faculty of law, economics and social 1,021 1,550 1,688 1,750 1,815

Faculty polydisciplinary Khouribga 685 560 736 706 698

Subtotal 1 1,706 2,110 2,424 2,456 2,513

Institutions with regulated access

National school of business and management

With BAC Parallel track

90 0

180 20

180 30

200 40

240 40

National school of applied sciences


42 0

120 10

120 10

120 10

120 10

Higher school of technology


50 0

70 0

210 0

390 0

390 0

Faculty of science and technology


500 0

580 80

680 164

820 160

1,000 192

Subtotal 2 682 1,060 1,394 1,740 1,992

Total 2,388 3,170 3,818 4,196 4,505

-% Of new entrants in the professional courses open accessinstitutions

12.55 37.11 46.29 45.59 44.41

-% Of students enrolled in master degree 41.17 59.36 74.04 72.88 72.88

2. -Emulation of excellence

-Number of students awarded prizes 72 76 85 93

-% Of students awarded prizes 1 1 1 1

3. -Fight against repetition and dropout

-Dropout rate in the first year license 25 20 16.5 12

-Graduation rate

Any number of years 60 70 80 90 90

On the statutory degree 20 45 55 60 70

-Number of students with a tutor 1,176 1,130 1,162 1,219

-% Of student in first and second semesters license with a tutor 0 100 100 100 100

4. -Improved external efficiency

-Number of students license key chains have benefited fromprofessional modules in S5 and S63

801 1,894 3,363 4,338 4,502

-% Of undergraduate students who received basicvocational modules in S5 and S6

30 60 80 100 100

-Insertion rate

After six months 10 15 20 30

After 12 months 30 40 45 50

3 S5 and S6 means semester 5 & Semester 6.


1106

(Table 3 continued) Year

Objectives and measurement indicators

Target values

2008-2009 2009-2010 2010-2011 2011-2012 2012-2013

After 24 months 40 50 55 65

5. -Promotion of scientific research

-Number of publications in international journals indexed 32 40 50 60 100

-Number of publications with co-signature Moroccan 16 20 30 40 50

-Number of theses 4 10 15 30 50

-Number of applied research projects conducted with companies

-Number of patents 1 2 6 9

-% Of research units accredited 80 100 100 100 100

6. -Capacity building of staff through ongoing training

-Number of teachers who received training abroad 81 90 98 106

-% Of teachers who received training abroad 30 30 30 30

-Number of new teachers who received teacher training 12 30 24 30

-% Of new teachers who received teacher training 100 100 100 100

-Number of teachers who received teacher training 68 75 81 89

-% Of teachers who have benefited from teacher training 25 25 25 25

-Number of administrative and technicians who have received training

112 117 123 132

-% Of administrative and technicians who have received training

50 50 50 50

The realization of the diagnosis is based on the literature review, the collection of individual points of

view, particularly through interviews and by group work sessions.

The diagnosis will focus on two main components: the objectives of the contract (contractual indicators as

available data) and availability of resources for their implementation (budget execution).

Based on the table below, it is clear that the university comes to exceed its targets in comparison to the

situation in 2008 (base year), and against targets in respect of 2010. However negative differences are also

significant compared to targets (see Table 4).

What is noteworthy is that the rise of these indicators is a bottom-up, each institution as

these achievements and all these data are consolidated by the central coordinator of projects at the

university.

Among the difficulties encountered on the ascent and the calculation of these indicators, we can cite4:

(1) The lack of functional organization “fixed” and those responsible for systematic reporting and

information feedback. It means that coordinators at school level are not systematic and are not affected 100% to

the reporting and monitoring indicators;

(2) The frequency of back information is not systematic (monthly for example), it is usually in

connection with the preparation of progress reports or annual report, that institutions are beginning to send

their canvas;

(3) Poor communication about the indicators, explains the quality of indicators and the differences between

the assessment and evaluation.

The following is a summary table of actions Investment Project 13 and 14 which were the subject of

4 Based on work sessions with the project coordinators.


1107

contract at the University Hassan I: The quantities produced are expressed in square meters for construction,

development, maintenance and repair for building and related studies (see Table 5).

At work on these observations, it is clear that the establishment of a system of management control and

budget monitoring is essential (see Table 6).

After schematizing the process and segmenting activities around the university’s strategic objectives and

particularly empowering actors in relation to their missions, the university is required to develop monitoring

tools and evaluation of its activities.

Table 4 Based on the Annual Report of 2010, the Analysis of Indicators Related to the University Hassan I Contract

Targets Contract Hassan I University

2008 (base year )

2009 2010 2011 2012 2010 results

Gap/ 2008

Gap/ Target 2010

1. The develop ment of the supply of higher education

Student enrollment by institution:

Number of new students: 2,388 3,170 3,818 4,196 4,505

% Of new entrants in the professional courses open access institutions

12.55 37.11 46.29 45.59 44.41 29 +131% -37%

% Of students enrolled in master degree 41.17 59.36 74.04 72.88 72.88 54 +31% -27%

Emulation of excellence

Number of students awarded prizes 72 76 85 93

% Of students awarded prizes 1 1 1 1 0.8 -20%

Fight against repetition and dropout

Dropout rate in the first year license 25 20 16.5 12 17 -15%

Graduation rate regardless of the number of years

60 70 80 90 90 95 +58% +19%

Number of students with a tutor 1,176 1,130 1,162 1,219 12,169.3

+977%

% Of students in first and second semesters license with a tutor

0 100 100 100 100

2. Improving external efficiency

Number of students license key chains have benefited from professional modules in S5 and S6

801 1,894 3,363 4,338 4,502

% Of undergraduate students who received basic vocational modules in S5 and S6

30 60 80 100 100 100 +233% +25%

3. Promotion of scientific research

Number of publications in international journals indexed

32 40 50 60 100 24 -25% -52%

Number of publications with co-signature Moroccan

16 20 30 40 50

Number of theses 4 10 15 30 50 8 +100% -47%

Number of applied research projects conducted with companies

Number of patents 1 2 6 9 2 +0%

% Of research units accredited 80 100 100 100 100

4. Strengthening of staff skills through continuing education

Number of teachers who received training abroad

81 90 98 106

% Of teachers who received training abroad 30 30 30 30 26 -13%

Number of new teachers who received teacher training

12 30 24 30

% Of new teachers who received teacher training

100 100 100 100 50 -50%

Number of teachers who received teacher training

68 75 81 89

% Of teachers who have benefited from teacher training

25 25 25 25 60 +140%

Number of administrative and technicians who have received training

112 117 123 132

% Of administrative and technicians who have received training

50 50 50 50 31 -38%


1108

Table 5 Canvas of Chart Budget Execution for Each Establishment Project Measures Actions Investments

Project 13: Improved supply of higher

Rehabilitation, maintenance and equipment of universities

Common actions to all institutions

1. Planning of the presidency 2. Buy a car 3. Equipment from the presidency 4. Structuring of communication service 5. Optimization of information system for planning optimisation 6. Establishment of a process of internal evaluation within the university 7. Documentation center 8. Setting up a recycling center and transfer of technology 9. Extension of the car park of the university

Project 14: Promotion of research

Home capacity development

Specific actions to an academic institution

1. Equipment chains 2. Commercial vehicle 3. Offshoring 4. Establishment of a gravity irrigation

Common actions to all institutions

1. Setting up a system of guidance and information 2. Structure services human resource management 3. Language Resource Centerc 4. Construction of the club at the University

Specific actions to an academic institution

1. External relations services 2. Strengthening of research institutions 3. Cold Room

Table 6

Example of Constraints Related to Budget Execution According to the Assessment Report of the Ministry

Establishment Inconsistances budget

Case of ENSA

1. The construction project of the National School of Applied Sciences Khouribga at a cost of 55 MDHin Sheet Monitoring and 58 MDH in the tables of budget execution. Similarly, the physical and expenseare not reported in the Tracker, whereas the table of budget execution in May 2010 has issued a credit of5.025 MDH for this action. 2. The information in the monitoring form requested in the table: State of implementation of the action,have not been filled.

Case of EST

1. The construction project of the School of Technology Berrechid at a cost of 29 million dirhams in the tracking sheet and 40 million dirhams in the tables of budget execution. 2. The information in the Tracking Sheet requested in the table: State of implementation of the action, have not been filled.

Case of FPK

1. The proposed construction and equipment of the polydisciplinary Faculty of Khouribga at a cost of 125 million dirhams in the tracking sheet and 127 million dirhams in the tables of budget execution. 2. The information in the Tracking Sheet requested in the table: State of implementation of the action, were not informed.

Case of FST

1. For the mechanical center, the cost of equipment replacement is 570 KDH in Sheet and 1.4 MDH Monitoring in the table of budget execution. 2. The cost of equipment replacement is the 3.552 MDH in Sheet and 11.854 MDH Monitoring in the table of budget execution. 3. For courses of action equipment, the cost in the monitoring form is 9.945 MDH and the picture of budget execution of 14.714 MDH. For the same action, the information contained in sheet of % on acquisition of equipment (30%) is not consistent with the rate of the expenditure (91.5%).


1109

Issues of Management Control in the Moroccan Public Universities

The Control Levers of Simons, a Conceptual Framework for a Model of Management Control

In France, the adoption of the organic law on finance laws in August 2001, aims to guide the management

of public spending toward more efficiency by introducing management by objectives instead of management by

the means. The adoption of a management control directly inspired by the managerial emergency plan,

universities are encouraged by their supervisory authorities to acquire management control devices. Indeed, the

emergency plan reported in addition to tracing the project practices of private companies is central to its

implementation.

For this reason the interministerial circular of 21 June 2001 was to “the development of management

control in government”. Circular also provides a definition of management control:

Management control is a control system implemented by an official in his field assignment, to improve the relationship between the resources committed, including resources Human activity and either developed or the results obtained in the framework determined by a strategic advance with established guidelines. It ensures at the same time, management of services on the basis of objectives and commitment to service and knowledge of costs, activities and results.

In Morocco, through the implementation of the objectives and the means encrypted and quantified projects

including the proposed 16 which fits in the space 3 of the emergency plan, the key lever is to “cross-cutting

issues facing the system”. Its objective is to improve the governance of the University and strengthening its

autonomy.

However, the improvement of university governance and the strengthening of its autonomy, are through5:

(1) The optimization and rationalization of human resources;

(2) The management of financial resources (optimization, rationalization, the rate of budget execution,

diversification of resources);

(3) The establishment of an internal control system within the university;

(4) Strengthening institutional capacity.

From this, it is clear that the emergency plan combines the logic of the contract that is based on the

objectives and means the logic of monitoring and evaluation. The adoption of an internal control and

management control is one of the clear recommendations of the emergency plan.

The question in this context is to know in which theoretical framework can we write the model of

management control to set up in Moroccan universities.

To do this, we propose to work the levers of control of Simons (1995) which operate a dual distinction

between on the one hand, control systems focused on the attention opposed to systems-oriented research to

opportunities and learning and on the other hand, systems to oversee strategic areas opposed to systems

responsible for formulating and implementing the strategy (see Figure 1).

The figure of R. Simons, distinguishes four levers of control that can be used in a complementary and do

system within a comprehensive management control:

(1) Belief systems, which focus on an explicit set of organizational values that managers communicate

formally and reinforce systematically, to develop a culture and organizational goals, likely to create meaning and

provide a common direction;

5 Monitoring-evaluation: Progress Report 2010: feedback workshops project 16 and 18.


1110

Figure 1. Levels of control. Source: Simons (1995).

(2) Systems that address the boundary delimitation of strategic and focused the attention of the risks to be

avoided;

(3) Diagnostic control systems, which focus on the control of critical variables and critical success factors

and represent the most classic of management control based on the subsequent verification of results,

comparisons to their goals or standards, and the adoption of corrective measures;

(4) Interactive control systems, focusing on the strategic uncertainties and research oriented opportunities

and the emergence of new strategies.

The common thread between the various systems is that they are formal mechanisms of control by Simons

(1995).

The latter defines management control systems as “the procedures and processes based on information used

by managers to maintain or change the configurations of the activities of the organization” (Simons, 1995, p. 5).

Beyond belief systems and boundaries, it focuses particularly on the control diagnostic and interactive control.

Control systems are diagnostic of “formal information systems that managers use to monitor

organizational outcomes and correct deviations from preset standards of performance” (Simons, 1995, p. 59).

These feedback systems are the basis of traditional control systems according to Simons, their

characteristics are three:

(1) The ability to measure the results of a process;

(2) The existence of predefined standards to which the results can be compared;

(3) The ability to correct deviations from standards.

These three characteristics correspond to those of control cybernetics and his three conditions for the

validity of Hofstede (1978). While the interactive control systems are defined as “formal information systems

used by managers to engage regularly and personally in the decision-making activities of subordinates”

Systems to develop research and learning opportunities

Systems to focus research and attention

Systems to guide the strategic area

Systems to formulate and implement strategy

Stratégie

Fundamental values

Risks to avoid

Strategic uncertainties

Critical variables of

Belief Systems Boundary Systems

Interactive control Systems Diagnostic control Systems


1111

(Simons, 1995, p. 95).

Indeed, through the interactive control levers, Simons proposes to reverse the traditional relationship

between strategy and management control, that the control occurs at the stage of implementation of the strategy,

he said the top management must foster a interactive dialogue within the organization “through dialogue,

debate and learning around the interactive process, new strategies are emerging” (Simons, 1995, p. 102).

In concrete terms, the diagnostic control systems rely on power devices management control are: The

calculation of costs, plans, budgets, dashboards, management reporting systems, etc.

However, the interactive control systems are based on participatory management schemes, encouraging

interaction, information sharing and learning through processes of “bottom up” or cross, it uses eg. committees,

meetings, groups of progress, or performance reviews.

These systems do not exclude the diagnosis control, to the extent Simons recommended to use together the

two levers of control with different purposes: diagnosis of control levers to control the implementation of

deliberate strategies, the key factors driving success in strategic business areas of the existing company, the

control levers to encourage interactive learning, innovation and the emergence of new strategies. Provided that

“if the organization has no control systems (...), one of these systems will be used interactively and (n-1)

systems will be used in a diagnostic” (Simons, 1995, p. 103).

As part of the emergency plan, universities are encouraged to develop systems of management control.

The question is what are the levers of control available to these universities?

Clearly, monitoring of project indicators of the emergency plan and reporting to the ministry, as the

development of budget systems refer them to a diagnostic monitoring system.

This is clearly the same, referring to the French example. Indeed due to the organic law on finance laws

(August 2001), a methodological guide (D.I.R.E, 2002)6, was written at the request of the group “Improvement

of Public Management” mandated to coordinate the development of control management. The stated objectives

are forward about:

Enhancing the understanding of management control in government departments, to educate managers on the possible contribution of management control, to provide common references to the actors of management control public environment, enhance the experiences in management control in the public sector.

Overall this paper provides a fairly standard overview of the concepts, methods, tools, and controls

management.

The Tools of Management Control: Reflection on a Model to Develop Within the University

As part of the control levers of Simons, the tools of management control are distinguished:

(1) Conventional diagnostic tools of control: plans, budgets, dashboards, reporting systems, and

monitoring of cost, etc.;

(2) Interactive control tools: The Balanced Scorecard7.

In a context such as the university, the performance management is necessary for the implementation of its

strategy and achieving its objectives, while the dialogue management is also needed at all levels, to promote the

ideas of development and strategies in the short and long run.

6 The inter-ministerial delegation to the state reform. 7 Communication Gérald Naro and Denis Travallé “in search of conceptual and methodological foundations of balanced scorecard: The model of Kaplan and Norton revisited through the conceptual framework of the levers of control”.


1112

For this reason, the combination of the two types of controls proposed by Simons is useful for the proper

control of the university.

In the same sense, the methodological guide (Simons, 2002), presents a practical tool to provide answers

to the questions of organization, development, and implementation of any aspect of management control. It

favors an approach issues.

The issues are grouped into generic categories (Simons, 2002):

(1) Those who are finalizing the management control system, that is to say, the control system design and

management be structured around the strategic directions;

(2) Those concerning the major stages of structuring management cycle (planning and forecasting,

management and performance monitoring, performance measurement and animation).

The guide has proposed a matrix (see Figure 2) whose goal is to cross the management issues raised by the

organization, e.g., developing or preparing a budget, “measure performance” with the tools of management

control (diagnostic and interactive).

issues tools

Preparation and budget monitoring

Indicators and scorecards

Cost analysis A comparative analysis (benchmarking)

Segmentation

com

plet

ion Design of the

management control and accountability of the actors

Set the latitudes management Responsibility centre

Define the elements subjected to comparisons

A comparative analysis

Define the key points to put under control

Performance indicators scorecards report and information balanced scorecard

Strategic cos t management ABC method

Strategic segmentation

Man

agem

ent c

ycle

: pla

nnin

g, c

ontr

ol a

nd a

nim

atio

n

Planning and forecasting

Translate strategy into decline and action programs

Scorecards balanced scorecard

Management accounting forecast costs

Responsibility centre strategic segmentation

Develop and prepare a budget

Elaboration of a budget ratios budget budgeting in the first euro

Performance indicators

Management accounting forecast costs

Responsibility centre

Piloting performance

Control the budget execution Elaboration of a budget ratios budget

Performance indicators

Piloting activity

Performance indicators scorecards report and information


Pilot the implementation of the strategy

Performance indicators scorecards report and information balanced scorecard

Strategic cost management


Performance Measurement

Measuring performance ratios budget Scorecards balanced scorecard

Management accountingclassification of costs full cost variance analysis ABC method

A Comparative analysis


Animation Animating the dialogue of management

Elaboration of a budget ratios budget

Scorecards report and information Balanced Scorecard

Variance analysis strategic cost management Internal transfer price

A Comparative analysis


Figure 2. Crossing the table issues to be resolved by the manager and tools of management control. Source: Methodological guide of the inter-ministerial delegation to the state reform (D.I.R.E, 2002).


1113

Conclusions

The emergency plan as it was initiated at the University of Morocco, has translated an overall strategic

vision of the Moroccan state to modernize and upgrade the education sector.

The contractual logic of results he brought to clearly strengthen the role of universities in the development

of their missions, and to better support this approach and help them improve their performance and achieve

their goals effectively and efficiently, it is imperative that each university develops its tools for managing and

modernizing its governance.

To this end, this paper was to describe the new logic of contracting in which the Moroccan university

enrolled since 2009 and show through a case study of the need to develop a system of management control in

terms of the control levers of Simon (1995).

The extension of this work will consist of a research intervention in the University Hassan I. Its objective

is the establishment of a system of management control as a connection of steps.

The approach consists firstly in a segmentation of activities around the university’s strategic

objectives, and secondly as part of the control levers diagnosis, presenting the tools of management

control with a conventional system for tracking costs, budget planning, periodic reporting, and

dashboards.

Finally, depending on the degree of the university autonomy, implementing a balanced scorecard

within the interactive control levers developed by Simons may be considered. The aim is to involve all

stakeholders of the university about its objectives and missions to other strategies to emerge much more

innovative.

However, it is clear that all this requires above all the empowerment of budget management and human

resources of the University of Morocco.

It is not enough to commit budgets and line items to achieving goals, without changing the current budget

and accounting rules8. This is to increase the leeway of personnel services, mainly stage of preparing their

annual budgets and also the management of their resources during the year9.

It is not enough also to set targets and performance indicators without empowering and motivating the

university personnel. To accomplish this, it will require a clear and more flexible status10 to give more

autonomy to the university human resource management.

References Analytical Report. (2008). State and prospects of education and training system. Kingdom of Morocco: Higher Education

Council.

Annual Report. (2010). Development contract university 2009-2012. Royaume of Morocco: Department of Higher Education, Staff

Training and Scientific Research (2011).

Chtouki, H. (2006). University governance: The concept and context. Moroccan Audit Review and Development, 22,

253-258.

Henri, S., & Véronique, Z. (2004). Science research management: Approach qualimetric, observing the complex object.

Paris.

8 The Moroccan university work always with a public accounting dating back to 1967. 9 Heaviness in the public procurement procedure fact that the monitoring of budgets and commitment is not systematic. 10 Limits of Article 17 of Law 01-00 on the organization of higher education.


1114

Hofstede, G. (1978). The poverty of management control philosophy. Academy of Management Review, 3(3),

450-461.

Kaplan, R. S., & Norton, D. P. (2001). How to use the balanced scorecard. Paris: Eyrolles, Editions

d’organisation.

Kaplan, R. S., & Norton, D. P. (1998). The balanced scorecard. Paris: Editions d’Organisation.

Michel, G. (2009). Management control (9th ed.). Paris.

Simons, R. L. (1995). Levers of control: How managers use innovative control system to drive strategic reneval (p. 217). Boston,

Massachustts: Harvard Business School Press.


Model for Management of Public Funds Transfers in SICONV

Luiz Lustosa Vieira

University of Brasilia, Brasilia, Brazil

Ministry of Planning, Brasilia, Brazil

Ilka Massue Sabino Kawashita

Ministry of Planning, Brasilia, Brazil

This article consolidates the efforts of the Information Systems Research Group for the construction of a reference

model for the management of agreements celebrated based on the Brazilian federal government’s voluntary funds

transfers. It presents the Reference Model for covenants’ processes, which is the product of the third phase of this

research project. This model will be used as reference in the fourth phase of this project, when it will be applied to a

sample of covenants. Experience gained in this step will allow the consolidation of the Reference Model. An

important contribution of this work is to facilitate the understanding of proposals, so processes analyzed can be

improved and redesigned. Processes information, from organization to details of each activity, can then be

disseminated to all interested parties. Results here presented are not final. They will serve as input to the next stage

of the project, which is the Assessment of the Reference Model by selected Stadual and municipal governments.

Each entity will contribute with its own perspective to improving the idealized model.

Keywords: transparency in government, new technologies and public policies, government, information systems,

e-government, governance

Ministry of Planning aiming at facilitating the access to the resources available in the Union’s General

Budget by means of voluntary funds transfers highlighted, based on previous studies related to the topic, that

determinant success factors of those interested in accessing these funds are the capacity and organization of

their agents in executing activities required for future covenants qualification. The more prepared and

organized the agent is, the greater the amount of resources he has access to.

In this regard, a policy of more adequate distribution and with less risk of failure in the results necessarily

passes through agents’ improvement both in terms of procedures for the acquisition of resources and their

project management capacity.

The strategy of the Ministry in this segment is based on the following guidelines:

(1) Consolidation of successful experiences in a model of voluntary funds transfer process that will serve

as reference; 1 Covenants system of the Federal Government.

Corresponding author: Luiz Lustosa Vieira, Ph.D. in Information Systems from the University of Toulouse, France, Post Ph.D. in Government Information Systems from the University of Grenoble, France and graduated in Public Administration Institute at Methodist Bennett Rio de Janeiro; professor at the University of Brasilia, Brazil; planning analyst at the Ministry of Planning in Brazil; research fields: information technology strategic planning and government. E-mail: [email protected].

Ilka Massue Sabino Kawashita, Master in Computer Science from University of Montreal, Canada and graduated in Mechanical Engineering at University of Brasilia, Brazil; a project manager practitioner, PMP certified since 2006, with more than 20 years of experience in project management, systems analysis, and software development with focus on object-oriented software development methodologies and adoption of best practices such as PMBOK and COBIT; planning analyst at the Ministry of Planning in Brazil; research field: information technology strategic planning and government. E-mail: [email protected].

D DAVID PUBLISHING

MODEL FOR MANAGEMENT OF PUBLIC FUNDS TRANSFERS IN SICONV

1116

(2) Production of a methodology that allows the concerned agents the comprehensive and objective

identification of their capabilities, deficiencies, and priority points for improvement;

(3) Survey to gather data about a sample of agents’ working with voluntary funds transfers processes using

the referred methodology and comparative analysis in relation to the Reference Model, both cited above;

(4) Based on these surveys, determine the necessary guidelines and potential cooperation plans between

the Ministry of Planning, States, and Municipalities, aiming at processes improvement within the State or

Municipality.

Objective

This article describes the results obtained in the idealization of a model for the process of voluntary funds

transfers that will be adopted as reference for evaluation of practices adopted by covenants, as described in

guideline 1.

This work sought to consolidate the group’s understanding, with the collaboration of the Ministries of

Tourism, Social Development, and Planning in the role of grantors, as well as the Government of the State of

Pernambuco in the role of covenant, on what the best practices that should be observed in the voluntary funds

transfers processes are. Thus, the construction of the Idealized Reference Model is the result of the third phase

of the project (Construction of a Reference Model for Management of Agreements).

Therefore, the objective of the Idealized Reference Model is to serve as a parameter to guide the work

that will be developed in phase four of the project (Assessment of the Reference Model). At that moment,

three States and five Municipalities will be visited to check the effectiveness of the idealized model as a

parameter for the evaluation of covenants’ practices related to voluntary funds transfers. For this reason, the

level of detail shown in Idealized Reference Model is deemed sufficient for carrying out the work of this

project’s phase four.

At the end of phase four, the project team will have collected enough information and feedback to evolve

the Idealized Reference Model to a higher level of maturity, which is called the Consolidated Reference Model.

This is the project’s final product that will be made available for covenants. The consolidated model will

present processes’ activities that compose it in greater level of detail.

The methodology Business Process Improvement (BPI) (Harrington, 1991), chosen by its conformity to

the adopted platform of mapping process, and recognized quality, was applied to the project. BPI was also

customized for the Guide of Simplification of the National Program of Public Administration and

Bureaucracy (GESPUBLICA), which, in addition to the documentation of processes, guides a set of actions

relating to the management and improvement of such processes, making the creation of a corporate database

of improved processes documentation possible. The aforementioned methodology warrants the accurate

portrait of the process and consequent consensus about reality represented, by gathering information, about

current situation (as is), as well as the definition of the future situation (to be), through work sessions using

Joint Application Design (JAD)2 technique (Wood & Silver, 1989). The adherence of the process modeling

2 Joint Application Design (JAD)—is a software specification method created by IBM in the 1970s, whose goal was to reduce the time spent with the specification of systems, by the elimination of costly rework obtained by carrying out of specification with groups of interviewees formed by all the people who were involved directly or indirectly with the process. This method ensures a better vision of the whole and dispenses the consolidation work later. The meetings are characterized by objectivity, having a coordinator, whose role is to lead the group into a logical sequence of topics, avoiding the deviations of subject. Data obtained are being placed at the sight of all, in order to avoid different understandings related to the same theme.


1117

methodology to GESPUBLICA is ensured by the Manual of Process Modeling Standards, created and

maintained by the Process Management Office of the Coordination of Administrative Modernization

(COMOR/MP).

Methodology Applied

The software Architecture of Integrated Information Systems (ARIS) (Davis & Brabander, 2007) was used

as a tool for documentation and information management. The adoption of ARIS Products in conjunction with

the methodology for modeling the Reference Model allows jobs to be structured with high degree of detail and

information, which will enable the use of such documentation in futures initiatives.

Methodology for Modeling the Reference Model

As mentioned, the work of drawing up the Idealized Reference Model for voluntary funds transfers

processes was developed mainly using JAD methodology, which consists in meeting with people directly or

indirectly involved in the processes:

(1) Suppliers—who provide inputs for the implementation of the process;

(2) Performers—who perform the activities of the processes;

(3) Customers—who receive the processes’ products.

Meetings occur to allow these actors to discuss the activities according to their own perspectives, reaching

a consensus on the implementation of the process and generating a homogeneous and accorded view of the

process. The adoption of JAD for processes’ documentation allowed:

(1) Adopt a method for decisions that require interagency involvement;

(2) Allow participants to view the big picture;

(3) Reduce requirements gathering time, as future validations were not required, as traditionally occured in

conventional methods;

(4) Reduce decision-making time;

(5) Take advantage of the synergy of the group meetings—a void loss of information or detail;

(6) Information is gathered, clarified, aggregated, and documented during work sessions;

(7) Results are immediately presented, which allows uniform understanding of all participants.

At the end of each modeling meeting, participants identified best practices and improvement

recommendations that, at that moment, should guide the evaluation of practices adopted by covenants.

Manual of Process Modeling Standards

To ensure that process modeling activities executed at the Ministry of Planning are standardized and in

accordance with the Ministry’s needs, the Manual of Process Modeling Standards was developed and is

maintained by the COMOR/MP.

For the elaboration of the Idealized Reference Model, the research Group used the Manual and the Term

of Reference considering the following aspects of:

(1) Graphical representation, by means of diagrams and/or flowcharts;

(2) Resulting products/services and their requirements—final event of the process flow;

(3) Logical paths and interdependencies—processes’ interfaces;

(4) Customers and suppliers—initial interface (suppliers) and end of the flow (customers);

(5) Inputs required—input event to initiate process activities.


1118

Process Modeling

Process modeling is the term used to work relating to:

(1) Mapping—process identification and diagramming as it is performed (as is). Mapping is understood as

the identification of the workflows with well determined beginning, middle, and end; with clearly defined

inputs and products/services; and with activities that follow a logical sequence allowing an integrated and

chained vision the work;

(2) Redesign—process optimization (proposed or to be). Redesign is understood as the improvements

made through the rationalization of the workflow. Generates a base reference that allows, among other

applications, to create conditions for the construction of the organizational structure; definition and evaluation

of internal and/or institutional performance indicators; formulation of information systems plans; application of

the Plan Do Check Action (PDCA) Cycle (Shewhart, 1939).

Diagrams

Diagrams are graphical representations elaborated to present a certain reality in simplified form, thus

enabling a better understanding. Diagrams are primarily composed of symbols and attributes, which are

text-based information that complements the representation.

Value Added Chain (VAC) diagram. Model that represents the systemic vision of the organizational

processes, as it presents a macro vision of interconnection and/or chaining of macro processes, processes,

threads, and tasks, following their execution sequence.

Process flow diagram. Model that represents the detailed overview of sub-process/process in a logical

sequence and shows its integration with the other VAC processes. ARIS represents processes as a string of

events and activities, as shown in the Process Flow Diagram.

An activity is the action performed that is intended to support the organization’s objectives. Activities correspond to “what” is done and “how” it is done during the process. “What” is done is described by activity’s attribute “name” and “how” it is done by attribute “description”. Activity’s description naming should follow the rule: verb in the infinitive tense, i.e.: Meet Demands.

Events are the results of some activity/action or are used to represent temporal events (Example of temporal events: at the end of the year, every six months, daily). These objects control or influence the sequence of process activities, by triggering the execution of one or more of them. Events obey the following naming rule: verb in past tense, i.e.: Demands Met.

The modeling of a process always starts with the object “Interface Process” or the symbol “Event” and ends in the same way.

Standardization and Modeling

Work performed for the mapping and optimization of the voluntary funds transfer process to States and

Municipalities was based and focused on covenants views. Representation of processes was guided by the

Manual of Process Modeling Standards and used ARIS as modeling tool solution. The experience of the

technical staff of SLTI/MPOG3; and best practices identified between grantor and covenant contributed to

guiding the structuring, organization, and interaction are reflected in the proposed Idealized Reference Model.

Information and graphical representation of redesigned voluntary funds transfer process are consolidated

into ARIS database, which among other applications, allowed the generation of this documentation, considering

the following aspects of processes: 3 Secretariat of Logistics and Information Technology/Ministry of Planning, Budget and Management.


1119

(1) Models of processes of the Value Added Chain related to the Management of Voluntary Funds

Transfers Programs with the graphical representation of the processes in relation to the PDCA cycle, as well as

the representation of the inputs and outputs in the whole process life cycle;

(2) Models containing diagrams of inherent Voluntary Funds Transfers processes, with graphical

representation of their activities, events, process’ logical path and interfaces with other processes.

The Idealized Reference Model included in this article is structured in two levels, which allow the

understanding from processes to the activities flow of each one of the processes that compose the Model of

Reference. It is worth mentioning that only covenants’ processes were detailed into activities’ flows, as this is

the scope of this work. Grantors’ processes were only represented in Value Added Chain models, with their

respective inputs and outputs, to demonstrate complementarity between grantors and covenants actions.

The logic that guided process structuring and organization is detailed below:

(1) Level 1. Value Added Chain (VAC): on which are represented voluntary funds transfers processes,

contemplating the whole life-cycle of each process, from the identification of needs to the assessment of the

agreement’s general results. The processes are arranged in order to highlight the performances that fit to

grantors and drafted. Two VAC representations are used: The first highlights the VAC within the PDCA cycle;

the second details the inputs and outputs that promote integration between VAC’s processes (see Figure 1);

(2) Level 2. Process Elements: presents the decomposition of the processes identified in level 1 into their

respective activities flow. As previously mentioned, this level does not show grantor’s processes, only

covenant’s processes are represented.

It is important to emphasize that the sequence adopted for representation of processes in this article

follows the flow of the PDCA model, i.e., the first are presented processes that compose the Planning phase,

after those of the Implementation phase, followed by Control and, finally, processes of Evaluation phase are

presented.

Gerir programas paraTranferências Voluntárias

Divulgação dasações Transferência

VoluntáriaRelatório finalde prestação

de contas

Resultadosdos programas

Instrumentos detransferência

voluntária Divulgação das

Ações

Propostas

Elaborar propostade projeto

Parecer daproposta

(Técnico/Jurídico)

Analisar PrestaçãoContas Convênio

Formalizar Processode Transferência

Voluntária

ExecutarConvênios

AcompanharConvênios

Avaliar resultadosgerais dos Convênios

Planejar programasde governo

Diretrizes dosprogramas

AçõesOrçamentárias

Previsao de dotaçãoorçamentária

Regras das ações detransferência

voluntária

PPA

Diretrizesde governo

Demandasda sociedade

Relatóriosde fiscalização

Registrosda execução

Relatórios deanálise de registros

de execução

Documentação paraprestação de contas

Elaborar prestaçãode contas de convênio

Relatório dealcance dos

objetivos

PPADiretrizes

de governo

Demandasda sociedade

Levantarnecessidades

Lista denecessidades

Identificarrecursos

Fontede recursos

Cronogramado convênio

OB

Acompanharexecução

Liberar recursos

Relatório final

Cronogramado convênio

Relatório deacompanhamento

Relatório finalde execução

Relatório doacompanhamento

Instrumentos detransferência

voluntária

LIberaçãode recurso

Bloqueio derecurso

Instauração deTCE

LDO

LOA

Figure 1. Value Added Chain (VAC)—Management of Voluntary Funds Transfers Programs (representation of processes inputs and outputs).

Conclusions

Ministry of Planning in order to facilitate access to resources made available in the Union’s General

Budget by means of voluntary funds transfers determined, based on previous studies related to the topic, that a


1120

key success factor of interested parties in their pursuit of accessing these resources is the agents capacity and

organization in the execution of activities required for proponents qualification. The more prepared and

organized the agent is, the greater the amount of resources he has access to.

In this regard, a policy of more adequate distribution and with less risk of failure in the results necessarily

passes through agents’ improvement, both, in procedures for acquisition of resources and in their project

management capacity.

The strategy of the Ministry in this segment is based on the following guidelines:

(1) Consolidation of successful experiences in a model of the voluntary funds transfer process that will

serve as reference;

(2) Production of a methodology that allows interested agents the comprehensive and objective

identification of their capabilities, deficiencies and priority points for improvement;

(3) Conduct a survey, with a sample of agents, to gather data about their way of working with regard to the

voluntary funds transfer process, using the methodology and comparative analysis in relation to the Reference

Model, both cited above;

(4) Determination based on these surveys of the necessary guidelines, possible plans of cooperation

between MPOG4 with States and/or Municipalities, aiming at the improvement of the process in the context of

the Municipality or State.

The implementation of the BPI methodology mentioned in item (2), above, to obtain a Model for the

voluntary funds transfer process is complete. The software ARIS was used as tool for documentation and

information management, for identification of capabilities, deficiencies, and priority points for improvement of

the voluntary funds transfer process. Item (3) highlights the work performed for the mapping and optimization

of voluntary funds transfer process to States and Municipalities with focus on covenants views. It is important

to note that the sequence adopted for representation of processes in this article follows PDCA model flow, i.e.,

first are presented the processes that compose the Planning phase, after those of the Implementation phase,

followed by Control and, finally, assessment phase processes are presented.

References Brathwaite, K. S. (1991). Informations engineering: Analysis and administration. USA: CRC Press. Davis, R. (2001). Business process modeling with ARIS: A practical guide. London: Springer-Verlag. Davis, R., & Brabander, E. (2007). ARIS design platform: Getting started with BPM. London: Springer-Verlag. Harrington, H. J. (1991). Business process improvement: The breakthrough strategy for total quality, productivity, and

competitiveness. USA: McGraw-Hill. Scheer, A. W. (2000). ARIS—Business process modeling. USA: Springer. Shewhart, W. A. (1931). Controle econômico da qualidade do produto fabricado (Economic control of quality of manufactured).

New York: D. Van Nostrand Company. Shewhart, W. A. (1939). Método estatístico do ponto de vista do controle de qualidade (Statistical method from the viewpoint of

quality control). Washington, D.C.: The Graduate School, the Department of Agriculture. SICONV (Covenants system of the Federal Government). (2009). Sistema de Convênios do Governo Federal (Covenants system

of the Federal Government). Retrieved from http://www.siconv.gov.br Vieira, L. L. (2007). Comparative study of the management of government information systems projects—Proposal A-IV

international conference on systems integration-Brasília-DF 2 a December 5, 2007. Vieira, L. L. (2008). Management of government information systems projects—A comparative study—I InfoBrasil IT & Telecon

_ Fortaleza-Ceará-Brazil-May 2008.

4 Ministry of Planning, Budget and Management.


1121

Vieira, L. L. (2013a). Public policy—The reality in the practice of management covenants. Proceedings from the 4th International Workshop Advances in Cleaner Production, São Paulo.

Vieira, L. L. (2013b). Evaluation of procedures of the party in SICONV. Proceedings from the 4th International Workshop Advances in Cleaner Production, São Paulo.

Vieira, L. L., & Aguiar, N. J. A. (2011). Public politics—The reality in the practice of management agreements. Proceedings from 8th CONTECSI International Conference on Information Systems and Technology, São Paulo.

Wainwright, E. (2009). Convergence, information and records management: Observations from an Australian government information management perspective. Retrieved from http://www.nla.gov.au/

Weinstein, P. C. (1998). Ontology-based metadata: Transforming the MARC legacy. Pittsburg: Digital Libraries. Whitten, J. (1994). Systems analysis and design. USA: McGraw-Hill. Wood, J., & Silver, D. (1989). Joint application design. USA: Wiley. Zweers, K., & Planque, K. (2001). Electronic government from an organizational based perspective towards a client oriented

approach. In J. E. J. Prins (Ed.), Designing e-government (p. 92). Kluwer Law International.

Jucpa volume 10 number 11 november 2013

Documents

Transcript of Jucpa volume 10 number 11 november 2013