TRANSILVANIA UNIVERSITY OF BRAŞOV - unitbv.rowebbut.unitbv.ro/BU2013/2014/Series_V/BULETIN V...

ISSN 2065-2194

TRANSILVANIA UNIVERSITY OF BRAŞOV

BULLETIN

OF THE

TRANSILVANIA UNIVERSITY OF

BRAŞOV

VOL. 7 (56) NO.1 – 2014

SERIES V ECONOMIC SCIENCES

Published by Transilvania University Press

Braşov, Romania 2014

EDITORIAL BOARD Editor in Chief Ioan Vasile ABRUDAN, PhD., Professor Co-editors: Ion VIŞA, PhD., Professor, Director of PRO-DD Research Institute Liliana ROGOZEA, PhD., Professor Senior editor Series V Gabriel BRĂTUCU, PhD., Professor Editors, Series V Ileana TACHE, PhD., Professor Cristina NEESHAM, PhD, Professor, Monash University, Melbourne, Australia Tiberiu FORIŞ, PhD., Professor Ana ISPAS, PhD., Professor Dana BOŞCOR, PhD., Associate Professor Nicolae MARINESCU, PhD., Associate Professor Marius DINCĂ, PhD., Associate Professor Silvia SUMEDREA, PhD., Associate Professor Secretary, Series V Angela REPANOVICI, PhD., Professor Ioana CHIŢU, PhD., Associate Professor Final Technical Supervision Lavinia DOVLEAC, PhD., Scientific Researcher Alexandra PALADE, PhD. Candidate Mădălina OPRIŞ, PhD. Candidate Timea DEMETER, PhD. Candidate English language supervision Tania MUŞINĂ, PhD., Lecturer Anca MAICAN, PhD., Lecturer Web-site: http://webbut.unitbv.ro/Bulletin/ Webmaster: Corina POP, Eng. Address: 29, Eroilor st., 500036, Braşov, Romania Phone: +40–268–410525 E-mail: [email protected]

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SCIENTIFIC COMMITTEE Laurenţiu-Dan ANGHEL, PhD, Prof., Academy of Economic Studies, Bucharest,

Romania Niculaie ANTONOAIE, PhD, Prof., Transilvania University of Braşov, Romania Oscar BAJO-RUBIO, PhD, Prof., Universidad de Castilla – La Mancha, Spain Carmen BĂLAN, PhD, Prof., Academy of Economic Studies, Bucharest, Romania Paolo BISOGNI, PhD, Prof., Sogenet SRL, AILOG, Italy Constantin BRĂTIANU, PhD, Prof., Academy of Economic Studies, Bucharest, Romania Gabriel BRĂTUCU, PhD, Prof., Transilvania University of Braşov, Romania Javier Leon DE LEDESMA, PhD, Prof., Universidad de Las Palmas de Gran Canaria,

Spain Constantin DUGULEANĂ, PhD, Prof., Transilvania University of Braşov, Romania Liliana DUGULEANĂ, PhD, Prof., Transilvania University of Braşov, Romania Sergio Moreno GIL, PhD, Prof., Universidad de Las Palmas de Gran Canaria, Spain Dorin LIXĂNDROIU, PhD, Prof., Transilvania University of Braşov, Romania James KEARNS, PhD, Prof., Letterkenny Institute of Tecnology, Romania Pavel NĂSTASE, PhD, Prof., Academy of Economic Studies, Bucharest, Romania Cristina NEESHAM, PhD, Prof., Monash University, Melbourne, Australia George Arana PADILLA, PhD, Prof., Universidad de Las Palmas de Gran Canaria,

Spain Ivor PERRY, PhD, Prof., De Montfort University, UK Nicolae Al. POP, PhD, Prof., Academy of Economic Studies, Bucharest, Romania Vasile RĂILEANU, PhD, Prof., Academy of Economic Studies, Bucharest, Romania Ilie ROTARU, PhD, Prof., Lucian Blaga University of Sibiu, Romania Aurelia-Felicia STĂNCIOIU, PhD, Prof., Academy of Economic Studies, Bucharest,

Romania Ioan TALPOŞ, PhD, Prof., West University of Timişoara, Romania Adriana TIRON TUDOR, PhD, Prof., Babeş-Bolyai University, Cluj-Napoca, Romania Peter VAN DER HOEK, PhD, Prof., Academy of Economic Studies, Bucharest, Romania;

Erasmus University, Rotterdam, Netherlands Nicolae VOICULESCU, PhD, Prof., Titu Maiorescu University, Bucharest, Romania Răzvan ZAHARIA, PhD, Prof., Academy of Economic Studies, Bucharest, Romania

CONTENTS

• MARKETING ........................................................................................................... 7 Bălăşeşcu, M: Methodological and Practical Issues of Scientific Research on the Retail Market ....................................................................................................................... 9 Bălăşescu, S.: Contributions to the Foundation of the Marketing Mix for Retail

Companies .............................................................................................................. 17 Chiţu, I.B., Tecău A.S.: Aspects of the Romanian Food Retail Market ........................... 25 Constantin, C.: Using the Importance – Satisfaction Matrix in Designing Relationship

Marketing Strategies .............................................................................................. 31 Dovleac, L.: Pricing Policy and Strategies for Consumer High-Tech Products .............. 37 Duguleană, L., Duguleană, C.: Brand Valuation Methodologies and Practices .............. 43 Funaru, M.: Attitudes, Opinions and Behavior of Managers on Application of Ecological

Marketing in their Business - Testing Hypotheses - Case Study:Braşov County ... 53 Neacşu, N.A., Madar, A.: Artificial Sweeteners versus Natural Sweeteners .................... 59

• MANAGEMENT..................................................................................................... 65 Antonoaie, N., Antonoaie, C.: Learning Organization [reviewed article] ....................... 67 Antonoaie, V.: The Auction Behavior of Felling Companies in the Forest Sector. Case

Study: the Companies in the Central Region of Romania…................................... 71 Ivan, M., Albu, R.G.: A new Model of Vocational Education and Training in Braşov

County .................................................................................................................... 77 Guga, L.: Research on Investment Estimation when Deciding to Start a new Business. ...... 85 Madar, A., Neacşu, N.A.: Qualification of Staff as a Quality Strategy for

S.C. Schaeffler Romania..........................................................................................89 Popescu, M., Beleaua, I.C.: Improving Management of Sustainable Development in

Universities ............................................................................................................ 97 Sumedrea, S.: Assessing the Quality of Students’ Acquired Competencies in a Master

Programme ........................................................................................................... 107

• TOURISM ............................................................................................................. 113 Demeter, T., Brătucu, G.: Typologies of Youth Tourism ................................................ 115 Ispas, A., Rada, D., Sava, A.: The Role of Information Centres in Promoting Tourist

Destinations. Case Study: Tourist Information Centre Braşov ........................... 123 Popa, B.: Possible Scenarios of Ecotourism Evolution in Republic of Moldova from

the Perspective of Ecosystem Services ………………………………................. 131

Bulletin of the Transilvania University of Braşov • Series V • Vol. 7 (56) No. 1 - 2014 6

• INTERNATIONAL BUSINESS ........................................................................... 139 Armăsar, P.I.: Motivational Issues Related to the Business Foreign Language Class

in Higher Education............................................................................................. .141 Boşcor, D., Băltescu, C.: Romania’s Competitive Advantages on the Global

Outsourcing Market ............................................................................................. 149 Constantin, S.: Cereals Production Influence over the Trade Balance in Romania

and in the European Union ................................................................................. .155 Falola, H.O., Osibanjo, A.O., Ojo, S.I.: Effectiveness of Training and Development

on Employees’ Performance and Organisation Competitiveness in the Nigerian Banking Industry ................................................................................................. 161

Pop-Radu, I.: The European Welfare Model. Is Romania a Welfare State?!.................. 171 Romih, D.: Economic Diplomacy – The Case of Slovenia ............................................. 179 Sirkova, M., Ali Taha, V., Ferencova, M.: Continuing Education and Development

of Employees in Enterprises ................................................................................. 185 Tescaşiu, B.: Managing Business in Europe. Specific Issues in the Eastern and

Central European Countries................................................................................. 193 • ECONOMIC DATA PROCESSING ................................................................... 199

Opriş (Stănilă), M., Demeter, T., Palade, A.: Statistical Evaluation of the EU

Countries using Economic Indicators................................................................... 201 Palade, A., Brătucu, G., Opriş, M.: Factors that Influence the Number of Students

Enrolled in Higher Education Systems in Romania ............................................. 209 Authors Index ................................................................................................................. 217

MANAGEMENT

Bulletin of the Transilvania University of Braşov Series V: Economic Sciences • Vol. 7 (56) No. 1 - 2014

METHODOLOGICAL AND PRACTICAL ISSUES OF SCIENTIFIC RESEARCH ON

THE RETAIL MARKET

Marius BĂLĂŞESCU1

Abstract: This paper highlights the role and importance of marketing research in a dynamic and complex sector such as retail. The paper approaches the theoretical issues related to the methods and instruments of marketing research appropriate for the retail market. The theory about qualitative and quantitative research methods is supported by relevant examples which lead to a better understanding of the marketing research process and of its effectiveness on retail activities. Key words: retail, marketing research, consumer behaviour.

1 Dept. of Marketing, Tourism-Services and International Business, Transilvania University of Braşov.

1. Introduction The functional involvement of scientific

research in developing trade policies is possible due to the complexity of the processes taking place in the movement of goods and to the continuous improvement of trade. Private sector development, restructuring trade and social protection of consumers are just a few items of critical importance for scientific research, seen as a fundamental element of trade policy. Scientific research currently involves an operational involvement through studies, analyses and trade predictions to ensure proper diagnosis and solution of retail firms’ problems.

The main objective of this paper is to determine the role of scientific research in retail businesses. 2. Scientific research of retail market

From our perspective, the study of the

retail market should be conducted under two dimensions: the general coordinates of studying the consumer market and the practical research of the retail market [2].

2.1. General coordinates of studying the

consumer market Studying consumer goods market represents

a process of structural-qualitative and quantitative analysis of the present and future supply and demand on the consumer goods market. Market research, using statistical data and secondary information collected directly from the market, is grouped as follows [11]:

A. Study of market size - conducting preliminary measurements by parameters such as: actual market capacity (volume of goods sales, number of buyers, supply volume etc.) or potential market capacity (maximum volume of sales that can be achieved based on potential demand, the number and structure of relative non-consumers); market share; spatial distribution of the market (the degree of


market concentration, trade network density, average sales per capita in different cities, commercial gravity.

B. Research on the market structure allows the identification and measurement of the different market compartments and of the dynamic relationships between them. Market segmentation is one of the main marketing techniques used to approach the complex structure of the market.

C. Study of consumer demand - is achieved by a combination of methods including: methods of analysis (analysis and forecasting of goods sales, stock analysis, family budgets analysis); indirect estimation methods that approach demand as a result of economic phenomena (level of income, price index, inflation rate, interest rate, GDP per capita and its growth rate), demographic phenomena (population size, socio-professional structure, age, gender, urban, rural etc.) or other phenomena; direct study methods for gathering information directly from consumers (inside stores, at exhibitions, at home, in the street etc.) using empirical observation and (or) selective research.

D. Study of goods and services supply in both the static and dynamic profile, a domain involving: a) research of supply structure, b) research of supply dynamics that seeks to determine quantitative and qualitative variations, diversification and assortment renewal; c) research of supply localization that provides information about the disposal, territorial dispersion of the offer; d) research on the supply lifecycle.

E. Prices study. The research objectives may relate to: a) the absolute size of price: the wholesale price, the retail price, individual prices, prices in different seasons etc.; b) relationships between the prices of various products (from distribution links: manufacturer-wholesaler-retailer-consumer); c) price dynamics.

F. Study of the market situation - aims at the periodic research of factors influencing the market and establishing the main guidelines

and market trends. For example, because of the global financial and economic crisis, companies have a concern in finding information for understanding what changes occur in market components (size, structure, supply and demand, prices etc.)

2.2. Practical research of the trade market

In particular, the study of trade activities can

be achieved by the following research categories [13]:

- Studies among wholesalers, for evaluating distribution channels;

- Studies among retailers generally seeking to evaluate consumer attitudes toward prices, brands and assortments offered;

- Studies to assess logistical aspects on the supplier-retailer-consumer relationship;

- Ad hoc studies in-store (mainly shops) for knowing consumer specific behaviour.

In projecting a market study in commerce, there are some defining issues taken into account, such as: sampling, data collection and reporting, and the costs of obtaining information.

There are two categories of samples generally used by research firms: samples containing a particular type of trade or shops, with a relatively broad spectrum (e.g.: food, cosmetics, paper etc.), relatively specialized samples, which try to reflect the distribution characteristics of a single class of products (such as sweets or cigarettes).

The collection of information from traders is delicate and difficult. Correct identification of the right person for such interviews is not always easy because the decision makers are not necessarily from the shop. Moreover, most of the times such decisions (which focus on interviews) are not taken by one person, but by several, and, thus, it becomes necessary to conduct several interviews in the same trade firm. The information can be collected daily or weekly, and processing and research reports may be made monthly or every two months.

M. BĂLĂŞESCU: Methodological and Practical Issues of Scientific Research on Retail... 11

A feature of market research in retail is the cost of obtaining information and their sales prices. In this case, research companies produce information with a certain frequency, and then they must find the interested clients. The effective functioning of a panel of stores must be provided no matter the number of customers who buy the information gathered, which induces certain financial risks. The management of trading activities studies is somewhat a unique sector in the market research landscape, so they are conducted by specialized providers as compared to other market studies [13].

3. The market research process The marketing research process requires a database and its analysis in relation to certain matters regarding the retailer. In some companies, this kind of research is one of the elements that make up the data system, for others it may be the only type of data available. Market research involves the development of certain activities [3]: defining the research theme, examining secondary data, generating primary data (if needed), analysing data, making recommendations, implementing solutions.

Defining the research theme involves a clear and precise formulation. The aim is to obtain the necessary information for the retailer decisions. Without knowing which information is required, there is a risk of gathering irrelevant and confusing data.

Inside the process of obtaining marketing information, the trader must pay most attention to the advantages and disadvantages of the two broad categories of data: secondary data and primary data. Secondary data may come from internal or external sources. The most important internal sources [5] for secondary data refer to sales, costs, ongoing marketing activities, information on distribution and consumers. External secondary data is

provided by organizations, associations, institutions etc.

Of particular importance are standardized marketing data (or secondary syndicated data), which is information obtained by specialized agencies from surveys or panels consisting of consumers, retailers or both categories [1].

In developed countries there is a high demand of electronic scanning services that are based on the electronic interconnection of supermarkets and other types of consumer goods stores, where information is collected by scanning special labels attached to products (bar code). This way, detailed information is provided about sales, market shares, distribution, pricing and promotion.

Marketing researchers use qualitative and quantitative methods and techniques to obtain primary data.

In our opinion [2], retailers, considering their financial, human and organizational means, can use the following qualitative methods and investigation techniques: exploratory research, independent qualitative research, projective research, observations. 3.1. Qualitative research methods and

techniques a) Exploratory research - the most important methods used in exploratory research are: exploratory surveys among potential consumers, exploratory surveys among experts, secondary data, and case studies. a.1. Exploratory surveys among potential consumers There are times when traders choose to sell new products, to introduce on the market new services or to open new stores. Their interest is to know the possible reactions of potential customers in these situations. There are other types of exploratory surveys among consumers,


such as those which require a diagnosis of the current situation of a product or service on the market, or testing a product or service concept.

Situation diagnosis [7,] is an analysis of a given marketing context, in order to highlight the dimension of the problems and the priorities of a future research project, for new marketing activities. For example, a retail firm is interested in the introduction and expansion of a new service: the temporary supervision of children inside the store, as long as parents are doing their shopping. Before engaging in such an activity, the firm initiated a diagnosis of the current situation based on an exploratory investigation, and the result was that the majority of potentially interested families had not heard or known what this service meant.

In exploratory research, an important role in terms of marketing decision is held by the concept testing. This is a general name for different research methods when consumers express their attitudes, preference and intention to purchase a new idea of product or service, or a new idea of revision or repositioning of a good or service [14]. Testing concepts refer to how new ideas can be evaluated based on their benefits for consumers. Based on results, the firm can decide rejection or acceptance of new ideas. a.2. Exploratory surveys among experts - is a technique based on questioning highly qualified competent persons, with relevant experience in the field related to the topic under investigation [7]. When company management concludes that a new idea deserves to be considered, as a first step, marketing researchers can conduct a survey based on direct informal personal interviews among experts and specialists. a.3. Secondary data - is existing data stored in different forms. These data can be found in various magazines and books, publications, reports, scientific papers etc.

In marketing research, particularly important are the statistics that take into account the production and sales of goods and services, price levels and their evolution, the evolution of wages, taxes, interest rates, the volume of international transactions, demographic evolution etc. a.4. Case studies - are another exploratory technique that aims to deeply explore one or more situations similar to the considered problem. In retail marketing, the case study is used for analysing relationships such as manufacturers - wholesalers, wholesalers - retailers, or for analysing sales force management, the performance of the marketing mix etc. b. Independent qualitative research

Among many qualitative research methods, this paper brings forth individual techniques and group techniques, due to their applicability in retail. b.1. Individual techniques include direct communication, unstructured techniques [7] as: • informal discussions - involve gathering useful information from the researcher’s discussions with friends, colleagues, neighbours, or listening to consumer comments or complaints on different occasions. Such information may explain or facilitate the understanding of research phenomena or processes. • the in-depth interview method; depending on the structure, this method can be found under three forms: nondirective in-depth interviews (unstructured), semi-directive in-depth interviews (semi-structured), paper plus pencil interviews (involving a high level of structure) [7]. Nondirective in-depth interviews are used when the researcher wants a detailed examination of consumer buying behaviour, especially for high value products or services, when the information is related to sensitive issues (personal investment, personal hygiene).


• the verbal protocol method [7] - serves to marketing decision making and focuses on knowledge of consumer thinking process when he is involved in an act of purchasing. Basically, the researcher asks the buyer to think by speaking loudly. This method can be applied, for example in retail to points of sale. It can be done simultaneously with the process of buying or after the buying process. In the last situation, the purchasing process is video recorded and the consumer will explain his thinking on watching his own behaviour. To the point of sale, for example, the researcher seeks to know buyer reactions related to the price, advertising, point of sale promotion, goods labelling etc. b.2. Group techniques are considered useful in the study of trading processes: • the group discussion method - considers the exposure of participants opinions and feelings, the reasons and the restrictive factors, about a pre-set theme. It can be used to formulate hypotheses or to know the vocabulary which will be found in the questionnaire. • the Reflection Group method [7] - It is believed that a small group is a set of interrelated individuals who have strong interactions. This form of investigation is known as focus group in the Anglo-Saxon space. In practice, this method is used for: - generating ideas and assumptions; identifying opinions, attitudes, images, perceptions and representations of consumers; finding ideas for new products and services; studying purchase and consumption behaviour; testing new products and services concepts and names; positioning a product or store on the market; pre-testing a means of communication; determining the size and content of the questionnaire. • the nominal group method - is highly structured, based on a special questionnaire. Its main objective is to produce a large number of ideas and opinions.

• the Delphi method - brings together a group of 8-10 experts, which ultimately leads to some consensus regarding medium and long-term forecasts in technology, demand evolution, new products adoption etc. The investigation is highly structured and requires several steps. c. Projective research

Projective methods are indirect ways of obtaining information through the projection of beliefs, desires and feelings of a person on another person. So, the subjects have to interpret the behaviour of others and this way they indirectly project their own beliefs and feelings. Projective methods are based on association techniques, completion techniques, construction techniques and techniques of expression, which we will further analyse [7]. c.1. As association techniques, we mention (free) association words tests: the subject receives a list of words and he has to find a word associated to each word found in the list. It is used to test potential brand names for different products and stores, to pre-test keyword or identify consumers’ criteria for choosing a product or store. c.2. The most important completion techniques are: sentences completion test and story continuing test. • the sentence completion test is based on the principle of free association. The subject is asked to complete a number of unfinished sentences, with the first word or phrase that comes into his mind [7]. The consumers’ answers are generally larger than those used for the word association test. • the story continuing test – the subject is given the opportunity to continue a story that has a given beginning. For example, we have the situation of a couple who has to decide on buying a durable commodity, and the subjects have to imagine how things will evolve, what can happen.


c.3. A distinct category of projective methods gives the subject the possibility to build a dialogue, a script, a description starting from a given stimulus. As construction techniques, one can mention [7]: the thematic apperception test, the comics technique, the photographic portrait, the third person technique, the Chinese portrait technique. c.4. A meaningful expression technique is the technique of role playing. It assumes that a subject interprets a role or acts based on the behaviour of other people on a given situation. This method can reveal real opinions of subjects about a store, product, packaging, advertising etc. d. Observations Observation means the systematic process of recording the behaviour of people, objects and events without the observer communicating in any way with those who have these behaviours [12]. The object of observation can be: in-store purchasing behaviour (moving, products research, purchased quantity etc.); verbal behaviour (discussions with vendors); nonverbal behaviour (facial expression, gesture, posture etc.); subjects activities (watching TV., radio listening); spatial and localization ratios (traffic count of visitors, shoppers and pedestrians, shelf space); temporal behaviour (the time spent on purchase, in a restaurant, watching TV channels, listening to a radio station); physical objects (the availability of a product on shelf, brands in consumers household, recycled newspapers); audio – video recording and ways of encoding (commercials content, bar codes for prices, the contents of the press releases etc.).

Observation, in general, is an alternative research method used simultaneously as a complement to other methods of obtaining primary data such as: surveys, marketing experiments, individual or group interviews, case studies [5].

3.2. Quantitative research methods and techniques

To obtain primary data, retail managers

may require researchers to perform quantitative investigations which enable results extrapolation to the entire population. So, researchers can conduct surveys or marketing experiments usually found in market tests. a. Surveys aim to describe purchase and consumption behaviour, to know opinions and attitudes, to identify the reasons underlying marketing actions, to find the values shared by buyers or consumers. In this respect, in an investigation, the main information needed for decision-making in retail firm, are the following [10]: a.1. Knowing the buyer and consumer behaviour - it may concern: knowledge about the stores visited by consumers; knowledge on the products and the brands owned by consumers; durable goods possessed; ways to get informed; purchasing behaviour (who bought, quantity purchased, brand, frequency of purchase, time of purchase, type of store, store brand loyalty and/ or products loyalty); circumstances of use: by whom? when? where?. a.2. Knowing the attitudes and purchase reasons [13]. The most important aspects that can be considered are: knowledge of the needs and desires; knowledge of the reasons for buying the product or service; identify the reasons related to habits; knowledge of the restrictive factors that influence purchase; existing attitudes towards the store, product, service, brand; selection criteria; purchase intentions of a product, service, brand. a.3. Knowing the opinions and values shared by the subjects - the preference shown for a certain type of store, product or brand; satisfaction or dissatisfaction related to purchasing from a particular


store, to the consumption of a product or service; the involvement in the purchase process; knowledge of shared values of subjects; knowledge of lifestyle. a.4. Knowing consumer characteristics - this includes: knowledge of demographic characteristics: gender, age, nationality; living environment; economic characteristics: income, savings; socio-professional category: profession, occupation, position; education; household type; membership of various associations: cultural, sports ones etc.

Surveys are structured ways of collecting primary data based on a questionnaire. Conducting a survey involves more opportunities to communicate with subjects who are part of the sample. The main communication methods, depending on data collection, are: face to face survey; survey by mail; survey by telephone; Computer-aided investigation; Internet survey [7]. b. Marketing experiment in retail

The basic feature of the experiment in marketing research is to analyse the cause-effect relationships between two or more variables [7]. Any experiment assumes that changing experimental factors generates certain effects or results that can be measured. This means that in an experiment, an independent variable is subject to change, and the effect of this treatment on the dependent variable is measured and then analysed while the other variables remain the same. The marketing experiment requires the existence of experimental units or groups and control groups. The experimental unit or group are subjects undergoing experimental treatment. For each treatment a different experimental group is required. The control group comprises the subjects who supervise all experimental conditions. The marketing experiment requires the selection of test units, i.e. that entity (person, family, trade firm) whose

response to experimental treatments can be observed and measured. An essential aspect of the experiment is to control external variables. By external variables we understand those influence sources that are not taken into account in the experiment, but whose influence on the dependent variable can distort the results of the experiment. Because the experimenter does not want any external variables that influence the outcome, he must control the results and be able to know their influence or eliminate them. Retail managers and researchers must handle two main problems when they have to choose an experimental project or to evaluate it: internal validity and external validity problems [4].

The Marketing Test is a controlled experiment that offers the possibility of sales measurement, potential profit for new products or other marketing actions in the context of marketing real conditions [14]. The marketing test range is wide and includes: market tests, product tests, tests of promotional activities, tests on distribution etc. Marketing tests for retailers when opening new stores include: testing new point of sale location, acceptance tests of the new store, price test, private brand names tests, tests on advertising, sales promotion, merchandising tests etc. Simulation is a type of experiment where a computer is used for handling the strategy elements [3, 238]. There are two types of simulations: simulation which uses mathematical elements and simulation using "virtual reality". The first type builds the model of a controllable and uncontrollable retail environment. There is no need of consumer cooperation. This format is gaining popularity especially due to software performance. The second type of simulation uses interactive software which allows participants to simulate the behaviour in a realist manner, but there is a restricted supply of such software.


4. Conclusions

The content of the trade activity is complex. Besides the intermediary activity, trade includes other activities such as: market research, public information, consumer education, advertising, promotion, creation of the necessary environment for the sale act etc. Marketing research in retail can be defined as all the means that enable the collection, analysis, presentation and measurement of all information useful to the marketing approach. Retail managers or marketing specialists are constantly in contact with the client, but their action requires perfect knowledge of other sale agents who perform the market activity. Marketing research can be considered the starting point in marketing actions for any trade firm. They are a means to define new products or redefine existing ones, in order to adapt them to the consumer needs; a way for choosing the best marketing strategy or tactics. References 1. Aaker, D., Day, G.: Marketing

Research, 4th ed. New York. John Wiley, 1990.

2. Bălăşescu, S., Bălăşescu, M.: Marketingul în comerţul cu amănuntul (Marketing in retail). Braşov. Editura Universităţii Transilvania din Braşov, 2010.

3. Berman, B., Evans, J.: Retail Management. A Strategic Approach, Pearson-Prentice Hall, USA, 2007.

4. Campbel, T., Stanlez, C.: Experimental and Quasi - Experimental Designs for Research. Chicago. Rand Mc.Nally, 1963.

5. Evrard, Y., Pras, B., Roux, E. : Market. Études et recherches en marketing. Paris. NATHAN, 1993.

6. Fournis, Y. : Les Etudes de Marche. Techniques d’enquête, sondages, interprétation des résultats, 3e edition. Paris. Dunod, 1995.

7. Giannelloni, J., Vernet, E. : Etudes de marché. Paris. Vuibert Gestion, 1996.

8. Lefter, C., (coord.), Brătucu, G., Bălăşescu, M., Chiţu, I., Răuţă, C., Tecău, A.: Marketing, vol.I, vol II. Braşov. Editura Universităţii Transilvania din Braşov, 2006.

9. Lefter, C.: Cercetarea de marketing (Marketing research). Braşov. Editura Infomarket, 2006.

10. Moscorola, J.: Enquête et analyse des données. Paris. Vuibert Gestion, 1990.

11. Putz, E.: Studiu de piaţă (Market study). In: Marketing-Dicţionar Explicativ (Marketing – Expanatory Dictionary), Florescu, C., Mâlcomete, P., Pop, N. AL. (coord.). Editura Economică Bucureşti, 2003.

12. Selltiz, C., Wrightsman, L. S., Cook, Stuart, W.: Research Methods in Social Relations. New York. Holt, Rinehart and Winstonn, 1976.

13. Teodorescu, N.: Modalităţi practice de studiere a pieţei. Abordare sistemică (Practical ways for market research. Systemic approach). In: Marketing, Balaure,V. (coord.). Bucureşti. Editura Uranus, 2000.

14. Zikmund, G. W.: Exploring Marketing Research, 5th edition. New York. The Dryden Press, 1994.


CONTRIBUTIONS TO THE FOUNDATION OF THE MARKETING MIX FOR RETAIL

COMPANIES

Simona BĂLĂŞESCU1

Abstract: This paper highlights the particularities of the marketing mix for a company from the retail sector. In this sector there are some specific activities which influence the marketing approach, in terms of decisions regarding the policies and strategies. New elements are added to the traditional marketing mix, specific to the retail activity, and this triggers the marketing mix for the retail company. All the elements are extensively presented in the paper, with emphasis on their importance and relevant examples. Key words: retail, marketing mix, strategies, point-of-sale.

1 Dep. of Marketing, Tourism-Services and International Business, Transilvania University of Braşov.

1. Introduction There are many approaches of the

marketing mix in literature. Without the claim of creating an entirely new concept in terms of the marketing mix for retail companies, the present paper still tries to raise the issues that lead to the idea that there are many features of marketing decisions being taken by retail firms.

Through this paper we try to deliver the best solution to the following question: What is better for a retail company manager? The traditional approach leads the retail manager to make decisions close to the four classic elements of the marketing mix (product, price, placement, promotion). Our approach is different from the traditional view. It suggests the retail manager to better understand and then approach the variables specific to the retail company activities. These elements which are added to the 4P of traditional marketing mix might lead to better marketing decisions appropriate for the retail sector.

2. Marketing mix for retail companies

Marketing mix is a concept created by N. Borden in 1957, which included at the time 12 elements: product, packaging, price, brand, distribution channels, personal selling, advertising, sales promotion, display, service (post-sale), logistics, information gathering and analysis. Subsequently, E.J. Carthy summarized these variables around four pillars: product, price, place (distribution) and promotion.

For retail companies, due to the specific nature of the activities and especially due to the fact that they come in direct contact with the end consumer, we can identify six fundamental elements that compose the marketing mix [5]: the spatial location of the retail unit; the store (point of sale) as an image, ambient and atmosphere; product; price; distribution; promotion.


2.1. Spatial location of the retail unit If for the production units the decisions on the production sites are taken almost exclusively in relation to various aspects of logistics (proximity to suppliers of raw materials, paths, routes and transport means, storage capacity etc.), for the retail businesses the decision of store location or point of sale has a totally different meaning.

“Retailers often believe that the success of their business depends on three factors: location, location and location again!” [12]

Some authors consider that the store location selection is the most important marketing decision for a retailer [22].

Location appears to be the least flexible element of the retailer's business strategy. Advertising, price, assortment can be changed relatively quickly if the economic and social environment changes, and therefore requires a different implementation of the marketing mix of the store, but the location cannot be adapted so easily to these changes.

According to W. Applebaum, theoretician of space economy, a market area is defined as the geographic area from which a store draws its customers [4]. So, the market is seen as a surface limited by obstacles related to population mobility (the buyers). The market area is considered the territory where the trader establishes a special relationship with its customers. Also, the cost that consumers have to pay to buy the products they want is the first criterion to be taken into account in selecting the store location. This cost, physical, economic, psychological is too difficult to calculate and therefore an accurate determination of the market area of a retail store remains a delicate operation.

2.2. The store as an image, ambient and atmosphere

“The image” refers to how a retail store

is seen and perceived by customers, competitors, the public etc. To succeed, a retailer must communicate a distinctive image, clear and consistent. Marketing decisions for creating an image of the retailer must consider, first, the correlation of the image with the expectations and demands of the target market.

If, for example, the target market consists of high-income and demanding consumers, then all aspects that contribute to creating an image of the retailer (location, assortment, services, physical facilities, parking, playgrounds, prices, promotion etc.) must be according to the expectation of the target markets. We refer in this case to the stores with an image of high class establishment such as commercial establishments that sell luxury brands inside the malls or department stores located in major city centres that sell high quality products and brands. If the retail company targets consumer segments with a lower income, then it will be positioned in the market as a discount store or hard discount store. Clearly, all aspects that contribute to the creation of that image will have to be correlated properly (location - a neighbourhood area, low customer service, lower prices, sales promotion etc.) Creating and maintaining a retailer’s image is a complex process that takes place in several stages and is permanent. This process is more than the meaning given to the concept of store atmosphere. An expert in retail commerce, Lisanti, states that “A consumer should be able to determine in three seconds the following things from a store: name, type, fame, price ranking and personality”, adding that “Those who need what you sell will find you. All others must be attracted to enter

S. BĂLĂŞESCU: Contribution to the Foundation of Marketing Mix for Retail Companies 19

your store. Without a distinct image, you have no chance to be seen or heard in all the chaos that defines retail” [15]. A major objective of chain stores and small retailers is to maintain a consistent image in all the stores they own. But there are some factors that can affect the image. These factors are connected to management and employee performance, consumers profile, competition, location, parking, safety, merchandise ease of finding, language and linguistics, and cultural diversity of clients from different countries and surrounding area qualities. 2.3. Product policy for retail companies Retailers must have the right assortment of products and sell them in a manner compatible with their marketing view [7]. We consider that the explanations given by the specialist Stanley Marcus, former Chief Executive of Neiman Marcus, are enlightening in the sense stated above. He states: “I think the retail system of selling goods is actually very simple, it consists of two factors: customers and products. If you pay attention to buying the products, customers do not come back, but if you pay attention to your customers, they return” [18]. At retailer level, the decisions about the consumer goods selling are related to the science of merchandising. In our opinion, merchandising and marketing are closely connected. Merchandising enhances the methods and techniques that allow the products presentation at the point of sale in order to ensure the contact optimization with the material offer or services existing to the location [21]. This way, merchandising fulfils two main functions: a commercial function intended to ensure and stimulate the sale of goods, and a communication function designed to inform consumers and to act in the same direction of disposing goods to consumers.

Given the above, we share the opinion of many specialists who describe merchandising as being part of store marketing. Moreover, the French school considers merchandising as “... a part of marketing which includes commercial techniques that allow for the best material and psychological conditions for the presentation of the product or service subject to sale” (Commercial Sciences Academy in France) [19]. The selling function is found in what is called retail merchandising. Retail merchandising thinking determines all decisions on each product. So, it is considered that "retailers must decide on the number of assortments in the store and the number of products in each range. In addition, they must select the quality of the articles within each category, decide on pricing policy. Finally, retailers must determine if the assortments should generally be stable over time, or if they have to be surprising, special or by order” [9]. From the perspective of strategic marketing and operational marketing, a retailer should base its product strategies correctly. We believe that the most important types of marketing decisions meant to outline the product strategies are:

A. Decisions on predicting the expected level of sales for a certain period of time. The forecast process should include measurements such as: enterprise-wide sales expectations, anticipations in each store (if it is a chain of stores), expectations about product categories and expectations in each article.

B. Decisions on new products assimilation. There are several factors to be taken into account when conducting the planning at the level of merchandise novelty, such as: sales growth potential, fashion trends, company image, competition etc.


2.4. Pricing policy for a retail company In our opinion [1], when it comes to

pricing policies and strategies as marketing mix variable, it must be remarked that retail firms have far larger action margins in setting prices than the production firms.

A price strategy should reflect the company's own objectives and be related to the sales and profit. The goals to be achieved can be established as income and / or volume units.

a) Market penetration pricing strategy is used when the retailer wishes to acquire revenue by setting a low price and selling a large number of product units. Profit per unit is small but the total profit is higher if the desired goal has been achieved. This strategy is favourable for cost-sensitive customers and if the cost does not increase much [24].

b) High price strategy is used by the company to attract customers who are not concerned about the price, but the service and prestige. Usually the strategy does not maximize sales, but brings great profit per unit.

c) Cost-oriented pricing strategy - The retailer sets the price, adding the operating expenses and desired profit to the cost per unit. The difference between the merchandise cost and the selling price is the trade margin. With a variable margin policy, retailers adjust the margins on merchandise categories. One way of planning the variable margin is the direct profitability of products, a technique that allows each retailer to find any category of merchandise profits calculating marginal costs and direct costs of products for storage, transport, handling and sales. After this, the margin is established according to each category. This technique is used by supermarkets, discount stores and other retailers. The main problem is the complexity of cost sharing [4].

Cost oriented prices are often used by retailers. It is simple because a retailer can apply a standard margin for some product categories much easier than estimating the demand for different products at different prices. When retailers have established similar margins, pricing competition is reduced [8].

d) The strategy of prices adjustment to market conditions. The retailer may adjust prices according to the demand or market segment. The best example of adapting the retailer prices from Romania to the market demand are represented by some food prices (oil, sugar, flour) and durable goods prices (electronics, appliances, cars) in 2008, until the financial and economic crisis (end of 2008) and the beginning of 2009. So, 2009 started with significant discounts on many products. In our opinion, cooking oil was even 40 - 50% cheaper, and cars had an average reduction of 10-30%. The conclusion is clear, namely, many retailers have chosen to adopt this strategy of adaptation to the market conditions.

e) Competition-oriented price strategy - A retailer can use competition prices as a guide. A company may not modify prices if there have been changes in demand or costs, if they are not modified by competition. Similarly, a firm may change its prices if the competition changes them, even if there have not been changes in demand or costs. A firm with a good location, superior service, favourable image and exclusive brands can set higher prices than competitors. However, prices above the market average do not go with a store that has an inappropriate location, rely on self-service, is not innovative and does not offer separate products.[14] Competition oriented prices do not require calculation of demand curves and price elasticity. The average market price is assumed to be correct for both the buyer and the seller.


f) Promotional price strategy In some circumstances, companies will temporarily fix a price below wholesale price, sometimes even below goods cost. According to Kotler, promotional prices can be found in the following forms [11]:

Loss Sales - supermarkets reduce the price of goods belonging to famous brands to boost their sales. But usually, producers do not agree with their brands being subject to such operations because it can lead to worsening the brand image or to discontent among retailers that practice wholesale price of the supplier. Therefore, producers have tried to force intermediaries to renounce these practices, imposing the maintenance of the retail price by law, but the laws were repealed.

Special pricing – Retailers use special pricing at certain times of the year, in order to attract more customers. Thus, every year, in January, the prices of certain products fall, with a view to attracting more consumers who seek for bargains and in such conditions do more shopping.

Discount for immediate payment –It is used to stimulate consumers to purchase a product in a given period of time. They stimulate their sales without requiring large expenditures, as if the price was reduced.

Low interest credit purchases - Instead of lowering the price, the company can offer the financing of their own purchases at a low interest. To attract customers, traders generally announce that low interest loans are granted for purchases. It seems that this is a very well accepted method by buyers, because many of them use it when they want to buy a good. Thus, many retailers have developed partnerships with financial institutions so that together they can offer various loans adapted to customer requirements.

Warranties and service contracts – the company can promote sales by offering free assistance and service. Instead of charging fees for assistance or service contracts, it offers its customers these facilities for free or at a reduced price, which is another way to reduce the price.

Psychological discounts - they involve artificial setting of a high price for a product at the beginning and selling it later at a much lower price. Therefore, in the US, the Federal Trade Commission and Business Improvement Agencies were established against illegal tactics to reduce prices. On the other hand, price reductions are considered normal practices used for promoting sales.

g) Value-oriented pricing strategy - During the recession recorded in the 90s, when the growth was low, many companies adjusted prices to the economic conditions and fundamental changes subsequently occurred in the consumers’ attitude about quality and value. Increasingly more marketers adopted value oriented prices - offering the most advantageous combination of quality and prompt service at the best prices. In many cases, this has involved the introduction of cheaper versions of famous brands. In other cases, the value oriented prices involved redesigning existing brands to offer better quality at a fixed price or identical quality for low prices.

In the current global financial and economic crisis, marketers need to reinvent the concept of "value". In this sense, it can be said that the value-oriented pricing strategy offering more value for a lower amount of money, making this by underestimating the quality of the product and highlighting its price, has grown strongly in recent years and will further develop [13].


2.5. Distribution policy for a retail company

Some specialists substituted in the literature the term "distribution channel" with "marketing channel" [16]. This change aims to emphasize the role of intermediaries in the distribution process, to create value for users or consumers, adding the utility of form, possession, time and place [3]. In addition, the role of marketing channels is not only to participate in demand satisfaction by offering goods and services, but it also requires active participation to stimulate demand through information, creating proximity and promotion developed by members of the economic units network that form the channel [20]. Given the above considerations, we can define the marketing channel as a set of independent organizations involved in the process of ensuring product availability for use or consumption [23]. We consider that the retailer’s decision to integrate in a marketing channel is very important and influences all the other marketing decisions (concerning location, image, atmosphere and ambient, products, price and promotion) and the market success for the company. Inside the indirect marketing channel, the parties involved in creating added value -producers and intermediaries - have different needs and goals, as reflected in the criteria used by each side in choosing the other party. Thus, for the producer, the key criteria in selecting intermediaries, including retailers, are their relationships with customers in target markets, reputation and performance in sales, financial and managerial performance. The main factor for the selection of the intermediaries is the value added they generate along the marketing channel. This value represents the contribution of intermediaries to the end of the changes with final consumers [10].

For traders, the most important criteria underlying the selection of producers are: product and/or manufacturer's brand image, credit / financing, promotional support and assistance. 2.6. Promotional policy for a retail

company Some specialists considers that the role of the promotion policy in the retail business is to attract potential consumers (creating traffic in store) to convert visitors into consumers and to retain buyers [17]. Whatever the nature of the promotional activities, the homogeneity or heterogeneity of techniques, their action in time, the economic effects entailed etc., modern retail companies must always bear in mind their complementarity; an active and efficient market policy supposes their inclusion in a coherent and operational promotional policy [2]. The most used variables of a retailer’s promotional mix are: advertising, public relations, personal selling and sales promotion [6]. Next, we will analyse only personal sales as part of the promotional mix, but also as a possible approach of this element, as the 7th variable of the marketing mix specific to retail companies. Personal selling can be defined as a form of communication from one person to another, in which a seller tries to convince potential customers to purchase the company’s products and services. It is therefore a process in which salesmen try to inform and persuade customers to purchase a product or service. Personal sales are the most expensive component of the promotional mix and the most effective one, as it provides entrepreneurs the freedom of action to adjust a message to satisfy the customer’s needs for information. So, it gives the fastest feedback of all promotional activities due to direct communication.


Personal sales promotion success lies in the ability of staff to adapt to different situations that may occur, these situations requiring a certain degree of flexibility and adaptability. However, the behaviour of the sales staff must generate credibility. Because the sales force is the largest expense for marketing communications, it needs proper management and it should have a different type of management than the other areas of promotion [14]. This argument leads to the idea that personal selling can be treated separately, as the 7th variable of the marketing mix specific to retail companies.

3. Conclusions

We can conclude that retail companies - the closest entities to the consumer - which are in a state of fierce competition with other traders, need to combine and apply different marketing strategies related to marketing mix variables in a more innovative way and, at the same time, in accordance with the legislation and the consumer demands,.

The contribution this work aimed at was to identify the six variables of the marketing mix for retail companies.

As it can be seen, besides the 4 traditional pillars of the marketing mix, in the retail sector there are two more: the spatial location of the business unit and the store (point of sale) as image, ambient and atmosphere. These two elements are very complex due to their characteristics. The store location selection is the most important marketing decision for a retailer because the location appears to be the least flexible element of the retailer's business strategy. Regarding the second element, creating and maintaining a retailer’s image is a complex process that takes place in several stages and is permanent. Then, the product policy is based on the idea that retailers must have the right assortment of

products and sell them in a manner compatible with their marketing view. Speaking about price, the value-oriented pricing strategy offering more value for a lower amount of money has grown strongly in recent years and will further develop. Distribution has a particularity related to the retailer decision to integrate in a marketing channel. This decision influences all other marketing decisions (concerning the location, image, atmosphere and ambient, products, price and promotion) and the market success for the company.

A special situation that must be discussed is the situation of including the personal selling as the 7th element of the marketing mix. This could be seen not only as a component of the promotional mix, but can be approached through the importance of the sales force which is an essential variable in retail. Personal sales provide entrepreneurs the freedom of action to adjust a message to satisfy the customer’s needs for information. Therefore, personal sales deserve a special attention from managers when they take marketing decisions. References

1. Applebaum, W., Cohen, S.: The

Dinamics of Store Trading Areas and Market Eqilibrium. In: Annals of Association of American Geographers, nr. 51/1, 1966.

2. Balaure, V.: Politica Promoţională în Marketing (Communication Policy in Marketing). Bucureşti. Uranus, 2002, p. 432.

3. Bălan, C.: Canale de marketing (Marketing Channels). In: Marketing, coord: Balaure, V., Editura Uranus, Bucureşti, 2002, p. 387.

4. Bălăşescu, S., Bălăşescu, M.: Dezvoltarea Strategiei de Comerţul cu Amănuntul (Developing a Pricing


Strategy in Retail Trade). In: Convorbiri Economice, nr.1, Ianuarie 2007, p. 29-30.

5. Bălăşescu, S., Bălăşescu, M.: Marketingul în Comerţul cu Amănuntul (Marketing in Retail Trade). Braşov. Editura Universităţii Transilvania din Braşov, 2010.

6. Dunne, M., Lusch, F., R., Griffith, D.A.: Retailing. South-Western, USA. Thomson Learning, 2002.

7. Dupuis, M.: Les strategies du distributeur. In: Encyclopedie Vente et Distribution, Bloch, A., Macquin, A. (coord.). Editura Economica, Paris, 2001, p. 46-48.

8. Felsenthal, E.: Manufacturers Allowed to Cap Retail Prices. In: Wall Strett Journal, November 5, 1997, p. 3-8.

9. Kahn, B.: Introduction to the Special Issue: Assortment Planning. In: Journal of Retailing, Vol.75, 1999, p. 289.

10. Kim, K., Frazier, G. I.: A typology of distribution channel systems: a contextual approach. In: International Marketing Review, 13(1), 1996, p.19-32.

11. Kotler, Ph.: Marketing Management: Analysis, Planning, Implementation and Control, ninth edition. Prentice-Hall International, 1997.

12. Kotler, Ph., Armstrong, G., Saunders, J., Wong, V.: Principiile marketingului (Marketing Principles). Bucureşti. Teora, 1998.

13. Kotler, Ph.: Kotler despre Marketing (Kotler about Marketing). Bucureşti. Curier Marketing, 2003.

14. Lefter, C., (coord.), Brătucu, G., Bălăşescu, M., Chiţu, I., Răuţă, C.,

Tecău, A.: Marketing. Braşov. Editura Universităţii Transilvania din Braşov, vol. II, 2006.

15. Lisanti, T.: Retailers, Too, Need to Build a Brand Image. In: Drug Store News, June 2002, p. 27.

16. Lusch, R. F.: Erase Distribution Channels from your Vocabulary and add Marketing Channels. In: Marketing News 1979, 27 July, p. 12.

17. Mace, S.: Promotional Techniques and Development of Point-of-Sale. In: Sales and Distribution Encyclopedy, Bloch, A., Macquin (coord.). Paris. Editura Economică, 2001.

18. Marcus, S.: Reflections on Retailing, Retailing Issues Letter, July 2002, p. 2.

19. Niţă, V., Corodeanu, D.: Merchandising. Iaşi. Tehnopres, 2006.

20. Patriche, I.: Canale de Distribuţie şi Logistică (Distribution Channels and Logistics). Bucureşti. Pro Universitaria, 2006.

21. Popescu, I. C.: Merchandising. In: Marketing – Dicţionar Explicativ (Marketing - Explanatory Dictionary), Florescu, C., Mâlcomete, P., Pop, N. Al. (coord.). Editura Economică, Bucureşti, 2003, p. 450.

22. Stanley, Th., Sewall, M.: Image Inputs to a Probabilistic Model: Predicting Retail Potential. In: Journal of Marketing July 1976 vol. 40, p. 48-53.

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Bulletin of the Transilvania University of Braşov Series V: Economic Sciences • Vol. 7 (56) • No. 1 - 2014

ASPECTS OF THE ROMANIAN FOOD

RETAIL MARKET

I.B. CHIŢU1 A.S. TECĂU2

Abstract: Starting from the strategic importance of trade in the development of any society, the paper aims at highlighting a series of aspects, typical to the Romanian market, in terms of commercial activity. This way, we will first submit an overview of the evolution, followed by inland trade in Romania; then we analyze retail in the food industry, as a significant part of the Romanians’ consumption expenditure is still targeted towards this type of consumption.

Key words: retail trade, consumption expenditures, store chain.

1 Dept. of Marketing, Tourism and Business Administration, Transilvania University of Braşov. 2 Dept. of Economic Sciences and Business Administration, Transilvania University of Braşov.

1. Introduction According to the concept of sustainable

societal development, trade has strategic importance for the balanced and viable development of the economic-social systems in any country, it represents one of the most important sides of modern economy and it has thereby turned into the main element of market economy, regardless of its form [2].

In addition to rendering available a great variety of goods for the population, which leads to increased wellness and living standards, trade significantly contributes to the formation of the Gross Domestic Product, and is one of the greatest employers in the Romanian economy; for instance, the first 10 retailers on the Romanian market had 50.000 employees in 2012, 12,5% more than the previous year [7].

The Green Paper of the European Trade specified that, “as major decisive factor of the social and cultural styles, of lifestyles and of spatial planning, trade constitutes

the cornerstone of the European socio-economic model” [6]. The activities conducted throughout the European Union have already been influencing commercial life in many ways, the trade indirectly benefiting from the politics it promotes in fields such as regional development, environment protection, consumer protection, research, labour force qualification [1]. The retail trade throughout the European Union underwent a monitoring exercise launched in early 2009. This sector was chosen due to its importance in the economic-social life, as it represented (year 2009) 4,2% of the European Union’s Gross Domestic product, 17,4 million persons, 20% of the European Small and Medium Enterprises and influenced numerous economic activities both upstream and downhill. The conclusions of this monitoring were used in order to sketch the measures that might be adopted for a better functioning of the inland market in this sector. These measures aim


at enabling the companies in this sector to optimally use the home market liberties, at stimulating commercial services, at favouring innovation and at enforcing the objectives related to economic, social and territorial protection, and likewise related to labourer, consumer and environment protection. It is considered that “intelligent, sustainable and inclusion-friendly trade and distribution directly contribute to the success of Europa 2020 strategy [8]. 2. Commercial activity in Romania

The inland trade is a sector of significant weight for the national economy, a dynamic sector with consequential positioning within the Gross Domestic Product. After 1990, the Romanian trade has undergone constant change, the types of stores have diversified, in terms of specialization, forms of sale, payment methods etc., each store network having its own marketing and expansion strategy [5].

Nevertheless, in 2012, the Romanian retail market stood at the level of 21,5 billion euros, which is not much, if this figure is related to the population’s size and is compared to other European Union countries (table 1)[9].

Table 1

Country Population (mil)

Retail (bn. euro)

Poland 38.5 85.4 The Czech Republic

10.5 28.7

Romania 20,2 21.5 Hungary 9,9 18.7 Slovakia 5.41 16.4

Albeit these figures are suggestive,

Romania is allegedly a market of high potentiality, as significant mutations are conspicuous with reference to the types of operators that are active in commerce and to the range of products offered to

consumers. The competition of the foreign and multinational trade companies broke through more timidly and difficultly in Romania, as compared to other countries, but it became significant and currently represents a real challenge to the autochthonous entrepreneurs acting in the retail trade.

Important structural modifications have occurred in the Romanian trade by the development of new logistic structures, adapted to the current market requirements, structures which resort to cutting-edge marketing techniques. The Romanian market has seen the entry of great distribution network forms, retail or wholesale, the development of trade in supermarkets and department stores.

The fragmented character is another defining feature of the Romanian retail trade, a feature which derives both from the dimension of the existing units (a great number of small units still existing) and also from the concentration of ownership (which is low, as there is a relatively small number of store chains).

This feature can be likewise proved with the data provided by the National Institute of Statistics for the year 2011 [10]; thus, throughout the country, 124407 retail outlets existed, whereof only 54 (0,04%) had a surface of over 10000 m².

According to a study conducted by GFK Romania, in December 2013, for the first time after 1990, the weight of modern trade surpassed the weight of traditional trade within the overall commercial activity (figure 1) [11].

Fig. 1. Weight of modern trade

I.B. CHIŢU et al: Aspects of the Romanian Food Retail Market 27

According to the same study, the greatest share of modern trade is held by hypermarkets (28%), followed by supermarkets (13%), discount stores (9%), proximity stores (2%) and cash&carry (1%).

The low value of the investment necessary for establishing a small commercial unit became, after 1990, an attractive alternative for the excess of labour force, especially in the context of the dramatic reduction of the occupational weight in industry. Note however that the quantitative development was not accompanied by a proportional rise of service quality, business enhancement and market concentration, at macroeconomic level [4]. Since 1993, the retail trade has been strongly influenced by the apparition of store chains owned by foreign investors. They determined, among others, the diminution of the kiosks and mixed shops, which dropped significantly. If, in 2001, only 9% of the 6896-million-$-turnover from foodstuff-retail sales was yielded by supermarkets and hypermarkets, as compared to other States (for instance Poland 39%, Hungary 58%, Czech Republic 63%), nowadays, as previously

shown, modern trade occupies 53% of the sales volume. The great retailers in Germany and Austria benefited from their proximity to East-European markets and were the first to enter therein, acquiring a temporary advantage over other competitors. Other international networks from Belgium, England and France began thereafter to invest in Romania. 3. Food retail on the Romanian market At present, the weight of the food consumption within the total household consumption in our country is significant, being the main component of the gross domestic product (61% in 2012); hence, it is interesting to analyze what happened on the food retail market and which are the perspectives of this market. According to the Statistical Yearbook for 2012 [12], the highest weight of the total consumption expenditures of households was held by food and soft-drink expenditures (figure 2). The data show that agrifood products, alcoholic beverages, alcoholic products and tobacco cumulatively represent half of the consumption expenditures of the Romanian population.

Fig.2. Consumption expenditures of the Romanian population.

0 5 10 15 20 25 30 35 40 45

Food&non-alcoholic beveragesAcoholic beverages&tabacco

Clothing&footwearUtilities

Furnishings, household equipmentHealth

TransportCommunications

CultureEducation

Hotels&RestaurantsMiscellaneous goods


This situation much differs from the one at European Union level–27; where, by the year 2010, almost one quarter of household consumption was assigned to utilities

(water, electricity, gas and other fuels), whereas the expenditures on food and soft drinks only represented 12,9% [13].

Fig. 3. Consumption expenditures of the EU-27 (2010) Source:http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/File:Consumption_expenditure _of_households, accessed: 8.04.2014

Starting from these considerations, one

can explain the expansion of the great food retail chains on the Romanian market, which has always been reckoned as rich in potential. Next, we propose an overview of the development of the main commercial operators of the food retail market. On the hypermarket segment, Carrefour, a consequential player on the World Trade Market, the first European distribution group and the second worldwide, was also the first retail chain to have opened such a store on the Romanian market and to have developed on several levels, the market holding, in 2013, a number of 25 hypermarkets Carrefour, 78 supermarkets Carrefour Market, 58 convenience franchise-type stores, Carrefour Express Angst and an eCommerce website.

The next store chain to have applied this store concept on the Romanian market was Cora; which, since 2003 has developed, being on constant rise and reaching, in 2013, a number of 12 stores. Auchan, the French distribution group, ranking second worldwide (after Carrefour), is also the tenth food distribution group worldwide,

whichtook over 20 stores from Real network in 2013, which it was to re-brand, investing 40 million euros. This way, in Romania, Auchan has 31 stores opened and 2 under construction [14].

Kaufland, the German retailer, with a fairly extensive network on the Romanian market and throughout East-European countries, has been on constant increase since 2005, when it entered the Romanian market, reaching 89 units, and it intends to exceed 100, by late 2014.

The supermarket segment afferent to the Romanian market is dominated by two chains; the former, an Austrian one, Billa, dominated the market in the 2000s, reaching 80 commercial units, and it intends to continue its expansion by opening new stores and by modernizing the existing ones. The latter, a Belgian one, Mega Image, exceeded in number the chain Billa, being the most active commercial operator on the Romanian market, as it opened 168 stores (holding, besides, 127 stores Shop&Go and a branded store AB Cool Food) [15].

I.B. CHIŢU et al: Aspects of the Romanian Food Retail Market 29

The time of crisis has stopped neither the expansion, nor even the breakthrough (Lidl) on the Romanian market, of the discount retailers, the studies showing that, during this time, the Romanians appreciated (and still appreciate) the offer of such commercial units. This way, Profi, which was the modern retail chain with the most aggressive expansion throughout Romania, in 2011 (according to Ziarul financiar newspaper), reached 191 stores in 2013 and intends to reach 300 units and 6000 employees by late 2014. In 2013, Penny Market opened 15 new stores and reached 149 commercial units [16].

One of the most aggressive entrants in the Romanian market, yet with a very well planned strategy, was the German chain store Lidl, which is one of the greatest discount stores throughout Europe, as it renders available stores in over 20 European countries and ranks among the first 10 grocers worldwide. At present, Lidl holds approximately 10.000 stores and over 170.000 employees. Lidl started on the Romanian market in 2011 by re-branding the 107 stores Plus. By late 2013, it had 3800 employees and 174 stores in Romania.

3.Conclusions and discussions

The data previously presented prove that the year 2013 was characterized by a fairly large expansion of the international commercial operators, as, for the first time, modern trade, practiced through civilized commercial units, exceeded traditional trade, in terms of sales volume. This expansion, even if not made amid population expenditure increase, is beneficial, because it leads to competition intensification on the food retail market.. Nevertheless, owing to the still high weight of the stable rural population (46%) and to the still changing shopping and consumption habits, our country is behind

other European Union States. As regards the types of open commercial units, the small business units prevailed, such as supermarkets and discount stores, which have smaller surfaces, require lower investment and are adequate as proximity (convenience, neighbourhood) stores or are ideal for the towns with a smaller population, to the detriment of the hypermarkets. An aspect that cannot be overlooked and that is worth mentioning is eCommerce, and its expansion respectively. With an Internet penetration rate in Romania of over 48%, with more than 9 million users in 2012 (according to Internet Word Stat), it stands to reason that great food retailers also follow this trend and avail themselves of this opportunity, Carrefour and Cora making the first steps by creating the home-order store (carrefour-online) or the portal Cora Drive. Studies show that the weight of the Romanians who buy foodstuff online rose from 4,8% in 2011 to 7,2% in 2013 [17]. Therefore, the rapid expansion of the online stores on the non-food segment (4000 online stores) will probably be a characterization element of the Romanian retail, in parallel with the further territorial development of the great store chains.

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6. ***Carta verde a comerţului european (Green Paper of yhe European trade). In: Probleme economice, nr. 1/1998, p. 32.

7. http://www.retail-fmcg.ro/wp-content/uploads/2014/03/Raportul-2013-Evolu%C5%A3ia-concuren% C5%A3ei-%C3%AEn-sectoare-cheie.pdf. Accessed: 8.04.2014.

8. http://ec.europa.eu/internal_market/retail/docs/monitoring_report_ro.pdf „Către o piaţă internă a comerţului şi distribuţiei mai eficace şi mai echitabilă până în 2020”, p2. Accessed: 6.04.2014.

9. http://www.businesscover.ro/19-03-2012-piata-de-retail-din-romania-

aduna-215-miliarde-de-euro-suntem-piticii-europei/. Accessed: 2.04.2014

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13. http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/File:Consumption_expenditure_of_households,_EU-27,_2011_%281%29_%28%25_of_total_household_consumption_expenditure%29.png#filelinks. Accessed: 8.04.2014.

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USING THE IMPORTANCE -SATISFACTION MATRIX IN DESIGNING RELATIONSHIP MARKETING STRATEGIES

Cristinel CONSTANTIN1

Abstract: This paper is about an instrumental research conducted in order to identify the strong points and the weaknesses of a marketing tool used to identify the relationship between the customer satisfaction regarding certain product features and the importance given by customers to these characteristics. The results of this research reveal the necessity to pay special attention to the questionnaire designing in order to avoid some biases given by the hallo effect or by using improper measurement scales. Even if such a phenomenon may occur, the researcher should operate a transformation that could help to a better discrimination in the importance given to different product features. Key words: IS matrix, relationship marketing, marketing research.

1 Faculty of Economic Sciences and Business Administration, Transilvania University of Braşov.

1. Introduction The increasing competition and the

changing of the marketing paradigm in the last years have faced companies with the necessity to design new strategies focused on strong relationships with their customers.

In order to find the best strategies and the main product characteristics that should be emphasised in the communication process, companies have to put into practice proper research meant to identify the correlations between the importance of certain product features and the customer satisfaction regarding these ones.

We consider that the Importance –Satisfaction matrix is a strong tool which could be used to develop those relationship marketing strategies with a high impact on the target market of a company.

2. Literature review

Relationship marketing should be defined in terms of customer satisfaction, which is the main goal of every company. In short, this one could be defined as a range of marketing, sales, communication, service and customer care approaches to identify a company’s individual customers in order to create a long term relationship meant to obtain repetitive transactions to the benefit of both parties [1].

Generally, the literature underlines the shifting in the marketing paradigm from transactions to relationships, which is associated with the return of direct marketing both in business-to-business and business-to-consumer markets. When producers and consumers directly deal with each other, they can understand and


appreciate each other’s needs and constraints better and are more inclined to cooperate with one another, and thus, become more relationship oriented [2].

A model of relationship marketing developed in 1985 by Dwyer et al. identifies four phases of the relationship between buyers and sellers. The first phase is “awareness”, when a party recognizes the other party as a feasible partner for a certain exchange. The second phase is “exploration”, which refers to the search and trial actions in relational exchange. In this phase the potential partners first consider obligations, benefits and burdens, and the possibility of exchange. If the buyer trusts the seller, he could make a trial purchase. These two phases are patterns of transactional marketing. In order to reach superior levels in performing relationship marketing, other two phases should be followed: expansion and commitment. “Expansion” refers to the continual increase in the benefits obtained by exchange partners and to their increasing interdependence. “Commitment” refers to an implicit or explicit pledge of relational continuity between exchange partners. They have achieved a certain level of satisfaction from the exchange process and the relationship is considered a real benefit by both parties. But the dissolution of the relationship has also to be considered on the long run [3].

Other models include more phases in the relationship, the highest level identified in these models being “the partnership”. This level involves a high satisfaction of both partners, who act together in order to achieve the same goal [4].

As it results from the above models, customer satisfaction is the key word that describes the core of relationship marketing. Ph. Kotler defines customer satisfaction as a person's feelings of pleasure or disappointment resulting from comparing a product's perceived

performance (or outcome) in relation to his or her expectations. If the performance falls short of expectations, the customer is dissatisfied. If the performance matches the expectations, the customer is satisfied. If the performance exceeds expectations, the customer is highly satisfied or delighted [5].

In this context, a relationship marketing strategy is designed to enhance the consumer’s chances of satisfaction, loyalty and repeated business through the development of interpersonal ties with the company [6].

The impact of psychographic and/or personality traits could be also important in relationship strength, such issues being prerequisites used to identify consumers who have a greater propensity to form strong relationships [7].

Taking into consideration the main issues discussed in literature, we can conclude that the relationship marketing strategy has to be based on some research that could reveal detailed information regarding the importance given by customers to some aspects related to the product and additional services. Such research should also measure the performance of the company in delivering those products which meet or exceed the customers’ expectations. For this purpose, the “Importance Satisfaction Model” could be a strong tool which can be used by companies in their effort to measure customer satisfaction and to design proper strategies for relationship marketing implementation.

3. Importance-Satisfaction model

The Importance-Satisfaction (IS) model

is a matrix with four quadrants which suggest the proper strategy that a company should to follow.

The IS model known also as “Importance – Performance Analysis (IPA)”, originally introduced by Martilla and James (1977), yields insights into which product or

C. CONSTANTIN: Using the Importance-Satisfaction Matrix in Designing Relationship … 33

service attributes a firm should focus on to achieve customer satisfaction. This analysis uses data collected in satisfaction surveys with a view to measuring the importance of certain items, on the one hand, and customer satisfaction regarding these items, on the other hand. A two-dimensioned matrix results, where importance is depicted along the x-axis and performance (satisfaction) along the y-

axes. Customers are asked to rate each attribute on its performance according to their perceived satisfaction. Attribute importance is measured using some form of self-stated importance (e.g. rating scales, constant sums scales etc.) or derived importance (multiple regression weights) [8]. The general IS model is presented in Figure 1:

Fig. 1. Importance – performance matrix

Source: Matzlera, K, et. al.: The asymmetric relationship between attribute-level performance and overall customer satisfaction: a reconsideration of the importance – performance analysis. In: Industrial Marketing Management (2004), 33. p. 271– 277.

According to this matrix, the items

situated in Quadrant 2 are the most important items for further strategies, as far as the company has to focus its efforts on assuring a higher satisfaction for those items that did not perform very well in the customers’ opinions.

The use of the above matrix has the goal to support two of the most important criteria for decision making: to target resources toward goods/services of highest importance for customers; and to target resources toward those goods/services where customers are the least satisfied [9].


4. Research objectives and methodology The main objective of our research was to

test several ways of using the Importance – Satisfaction matrix in order to find the most appropriate methods that could help decision makers to choose the best relationship marketing strategies. To achieve this objective, we put into practice an instrumental research study. This kind of research is used for the testing and validation of the methods and instruments used in marketing research [10].

The research was made using a database resulted from marketing research conducted among car owners, whose main aim was to identify the customer

satisfaction regarding different car brands. In this respect, the questionnaire comprised 2 sets of questions using rating scales with 5 levels for measuring the importance of some features of cars and the level of satisfaction towards these features. The data was processed in different ways in order to identify some shortcomings or strong points in designing the IS matrix.

5. Research results

The results obtained based on the mean score of every variable show a great importance given by respondents to all the features analysed (see fig.2).

Fig. 2. IS matrix for cars’ features

Such a situation could be erroneous for

the decision factors as long as all the product features could be considered very important, without having a proper ranking of their real importance for customers. This situation could derive from the

people’s tendency to overload the importance of all measured factors or from an improper using of rating scales, which leads to a strong hallo effect.

In such cases, it is recommended to make a good hierarchy of the factor importance,

C. CONSTANTIN: Using the Importance-Satisfaction Matrix in Designing Relationship … 35

which can avoid the overcrowding of all variables in the right part of the matrix. This issue could be solved by using a simple ranking scale or a constant sum scale. Still, if we have used a rating scale and we met the phenomenon present in fig. 2, the best decision is to transform the

variable concerning the importance into a ranking order. Thus, the variable with the highest mean score regarding the importance will receive the highest rank and so on, till reaching the variable with the lower mean score, which will receive the rank 1 (see fig. 3).

Fig. 3. IS matrix for cars’ features revisited In fig. 3, we have a new picture of the

importance satisfaction matrix, which reveals the importance of the analysed features and the strategies that should be put into practice from the point of view of relationship marketing. The information comprised in figure 3 reveals that the price of the analysed cars is a good one and the users are satisfied with these prices. In this case, the strategies should not be focused on the prices due to a possible overkill. The maintenance costs should be considered in future strategies due to a low

level of satisfaction, but with a low priority. The highest importance has to be given to car safety and to maintaining the existing satisfaction regarding fuel consumption. 6. Conclusions

The IS matrix could help decision makers to use the data collected in satisfaction research with a view to establishing proper strategies meant to build strong relationships with customers.

Keep up the good work

Concentrate here

Low priority

Possible overkill


But the utilization of such a matrix could be biased by a weak designing of the questionnaire or by a pour relevance of the answers, due to the “hallo effect”.

In order to avoid the above mentioned problems, the researcher has to avoid the use of the same scale (e.g. rating scale) for a large number of items, because respondents tend to give the same answer to all these items, without a careful reading of every question. In such a case, the results could show that all items have the same importance and there is a poor discrimination between these ones. It is recommended to use a ranking scale or a constant sum scale. In the case of using rating scales, the researcher has to establish the final order based on the mean scores and to classify the items placed under the median value in the low importance category and the rest of items in the high importance category.

Thus, the IS matrix could better help decision makers in the prioritisation of the relationship marketing strategies that should be put into practice. References

1. Claycomb, C., Martin, C.L.: Building

customer relationships: an inventory of service providers’ objectives and practices. In: Journal of Service Marketing 2002, 16 (7), p. 615-635. See [6].

2. Dwyer, R., Schurr, P., Oh, S.: Developing buyer-seller relationship. In: Journal of Marketing 1987, vol. 51, p 11-27. See [3].

3. Hollensen, S., Opresnik, M. O.: Marketing. A relationship perspective. Munchen. Verlag Franz Vahlen, 2010. See [4].

4. Kotler, P., Keller, K. L.: Marketing management. 12th edition. Pearson Prentice Hall, 2006. See [5].

5. Lefter, C.: Cercetarea de marketing (Marketing research). Braşov. Infomarket, 2004. See [10]

6. Matzlera, K., Bailomb, F., Hinterhubera, H., Renzla, B., Pichlerb, J.: The asymmetric relationship between attribute-level performance and overall customer satisfaction: a reconsideration of the importance – performance analysis. In: Industrial Marketing Management 2004, No. 33, p. 271– 277. See [8].

7. Sheth, J., Parvatiyar, A.: The evolution of relationship marketing. In: International Business Review 1995, 4 (4), p. 397-418. See [2].

8. Stone, M., Woodcock, N., Machtynger, L.: Customer Relationship Marketing. Get to know your customers and win their loyalty. Kogan Page Limited, 2000. See [1].

9. Ward, T., Dagger, T.: The complexity of relationship marketing for service customers. In: Journal of services marketing 2007, 21( 4), p. 281-290. See [7].

10. ETC Institute: Importance-Satisfaction Analysis. In: Blue Springs 2010 Direction Finder Survey. See [9].


PRICING POLICY AND STRATEGIES FOR

CONSUMER HIGH-TECH PRODUCTS

Lavinia DOVLEAC1

Abstract: This paper highlights the complex process of price setting for consumer high-tech products. These prices are highly influenced by some external factors from the economic and social environment. The main objective of this paper is to establish the most effective pricing policies and strategies used by high-tech companies of various sizes. Decisions about price fixing for consumer high-technology products are largely influenced by consumer behaviour, too. Key words: high-technology market, price policy, marketing mix.

1 Centre of Economic Research, Faculty of Economic Sciences and Business Administration, Transilvania

University of Braşov.

1. Introduction

By developing an effective marketing mix are created, promoted and delivered innovative products and services that provide benefits to consumers, business partners and generally, to the entire society. Marketing mix planning begins with formulating an offer that brings value to target customers. This offer becomes the basis on which the organization develops its profitable customer relationships.

First, the paper captures those multiple factors influencing price fixing for high-tech products. Then the attention focuses on establishing price policy which is a complex process in marketing of high technology products. Price is a very important strategic tool for companies in high-tech industry. Pricing decisions should be consumer oriented.

In the paper last part are analysed specific pricing strategies for high technology products. An effective and consumer-orientated pricing strategy

means that marketing specialists understand how much values have the benefits provided by the product for consumers. Then they have to set a price appropriate to this value. Usually, in high-tech industry pricing strategies change, being different for each life cycle stage of the product. 2. Factors influencing the price setting

for consumer high-tech products

Every producer would like to set a high price for its high technology products to cover the investments in research and development or to prove the high quality of products. But there are some internal and external factors that put pressure on price diminishing.

Forces affecting the price are varied and very strong: volatile short life cycle of the product, the rapidly changing market, big investments in research and development, compatibility with existing products, the Internet, competition, external networks,


the cost of the first produced unit, price / performance ratio, consumers' perception of the cost/benefits ratio for new technologies.

A key feature of advanced technology is the rapid changing rhythm which leads to a shortened product life cycle and the need for rapid decisions for the moment.

Pressures on the price/performance ratio are explained in a clear manner by Moore's Law: Every 18 months, technology improvements double the product performance without a price increase. In other words, this type of improvement reduces the price by half for the same level of performance [10].

Consumer perception about the cost – benefits ratio affects pricing strategy. Internet offers to the individual and organizational consumers the possibility of comparing prices and negotiating lower prices. There is a cost transparency that allows buyers to more easily find information about producers and their prices [10].

Compatibility issues (with products older versions), existing products support, domain standards changes, prices for products peripherals - all these are factors to be taken into account in developing pricing strategy.

The unit cost in high-tech industry is influenced by the paradox of technology [7] which states that a business can grow while prices fall. This helps the company to sell more product units and these increasing amounts allow price cuts [10]. This situation requires an exponential increase in the market, evidenced by increased quantities produced and sold more quickly than prices decrease.

Developing pricing policy is a complex process in marketing of high technology products. Main factors influencing the companies in price fixing are: costs, competition, customers and the existing economic context.

Companies that set their pricing policy focusing on a low cost level must have a strong and inimitable cost advantage especially sustainable (which should not disappear with the development of future technology generations). A cost advantage based on economies of scale (large volume) for an existing technology may not maintain in the conditions of the appearance of a new generation technology.

A cost-oriented company ignores the impact of market factors (competition, demand) on profitability. This can be a fatal mistake on high tech market.

A high-tech company also can let its competitors to set prices, and then establish its lower, equal or higher price, depending on the market positioning intention. A company that introduces a radical innovation on the market often believes (wrongly) that it has no competition. But a customer can always choose not to adopt the innovation.

Consumer perception of value provides an upper limit for the price charged by retailers for high-tech products. Sometimes, retailers have difficulties to understand consumer perception of costs and benefits. The company may consider that the new sophisticated and innovative product offers obvious benefits to users.

In high-tech industry, a specific feature is the total cost of the ownership [10] (life cycle costing) reflecting the total amount spent by a customer for possession and use of the product or service. It includes the initial price (including taxes) plus shipping and installation costs, maintenance and repair costs, and other operational costs throughout the product life cycle. Using the total cost of ownership in developing the pricing strategy can help the company to position the product on the market.

So the company can show to the customers that if he buys the cheapest

L. DOVLEAC: Pricing Policy and Strategies for Consumer High-Tech Products 39

product available without considering the auxiliary, he may buy the most expensive product.

3. Pricing policy for consumer high-tech

products Price is the only marketing mix variable

that leads to profit, all other variables only generating expenses. Also, the price is a highly flexible item of the mix, it can be changed rapidly, in contrast to the product features or distribution [9].

Price setting for a high-tech product is a complex process that requires consideration of the product cost, product quality and value, product position on the market, brand image, competitive environment, organization's objectives etc.

Price setting can be done from the producer perspective or the customer's perspective. Price setting from the producer perspective depends on internal issues, as: product costs, sales cost, general expenses, capital cost, return on investment and any other factors. This orientation is the most inappropriate basis for making price decisions when the product crosses the chasm from the adoption cycle of high-tech products.

From the consumers’ perspective, the influencing factors for selecting products are: product features, the consequences of using the products, the way how consumption experience how consumption fits to the consumer values [6].

For the customer-oriented price setting, the company must pay attention to 3 aspects:

Accurate understanding of how consumers will use the products - it may be necessary a consumer segmentation by the occasion of using the product (end-use segments);

A focus on the benefits received by consumers by using the products because they buy benefits not features. This case

may require a customer segmentation through benefit which involves that the consumer segments are formed according to the benefits they expect from the products [8];

Need for calculating consumer cost. An important segmentation criterion is the purchasing power of potential consumers. Launching price of new products is sometimes considered so high that only high-income categories of consumers can afford to buy them.

There are many implications of compliance with these three requirements. First, it causes the producer to realize that pricing considerations should not be thought after the product has been developed and is ready for sale, but early in the design process [12]. Second, the analysis shows that different clients in different segments will appreciate the same product in different ways.

Customer-oriented prices require the company manage their customers based on profits, not just sales [11].

Price setting may vary according to the stage of the product adoption cycle. Early adopters are relatively insensitive to price, convinced that any immediate cost is insignificant compared with the final result. This is the case of value-based setting price. For early majority the price is set based on competition. Late majority, instead, will pursue a low price. They will not gain a competitive advantage, but will keep their external costs quite low and the price is cost-based.

The price policy for a high-tech company is developed according to the organization's marketing objectives, marketing mix strategy, costs and organizational considerations. Before setting a price, the firm must choose the strategy related to the target market and product positioning.

For example, Samsung has repositioned the products as top products with high


requirements, and therefore increased their prices. The high price has brought more brand credibility and an increased business profitability. [3]

4. Price strategy for consumer high-tech

products

Consumer is who will decide if a product price is the right one. Pricing decisions should be consumer oriented. An effective and consumer-oriented pricing strategy involves that marketers understand the value of product benefits for the consumer and set a price corresponding to this value [4]. Product benefits as perceived by customers might include the following categories [12]: functional benefits, operational benefits, financial benefits and personal benefits.

Often, organizations have difficulties in quantifying the products value for customers. If their perception of price exceeds the product value, consumers will not be willing to pay that price.

In high-tech industry, consumers don’t seek to buy cheap products but products whose price reflects their value [1]. Usually, consumers weigh what can the product provide and compare it with the price. iPhone 4G, made by Apple, has a manufacturing cost of about $ 187.51, but the end user pays in the store a price three times bigger. Although aware of this, consumers are willing to pay the price for the exceptional technical product characteristics (visible and palpable), and they pay for the benefits of using it.

For prestige goods such as high-tech products, consumers find that a high price points a certain quality and any decrease in the price level leads to a reluctance of consumers in making purchasing decision.

One aspect that companies must consider in developing and selling high-tech products is that customers can use the technology with some limitation. Most

high-tech products have features that the consumers never use and so, these products become only reflections of aesthetic aspirations and not of the functional needs. This perspective may give some to some companies the opportunity to offer cheaper products, but sufficiently advanced to a significant number of consumers. After Apple launched the iPad, high-tech companies react quickly launching similar products with features insignificantly different at different prices to different consumer segments. Romanian products (AllDro and EvoTab) have more modest technical characteristics, but they have a good level of applicability and functionality [13]. These characteristics influence the price whose level is much lower compared to the big producers’ products.

Pricing strategies change, usually as the product cross its life cycle stages. Launch phase is challenging for organizations bringing to market a new product, because they have to set the prices for the first time.

Many high-tech companies apply in the launching phase a skimming strategy, and then the prices are adjusted to a lower level. Then, companies apply the market advantage strategy that involves setting high prices for high-tech products. A company that is a technology leader can afford to maintain a high price for a certain period of time, such as Sony, Samsung and LG. One of this strategy advantages is that it recovers quickly enough research and development costs of the new product. Setting a high price, the company can create a good image for the product. This strategy can be very effective in market segmentation. Company may divide the market into several segments and then reduce the price to a level corresponding to each segment, while maximizing its profit.

Other companies, like Dell Computers, Panasonic and Nokia have adopted the penetration price strategy that involves

L. DOVLEAC: Pricing Policy and Strategies for Consumer High-Tech Products 41

setting a low initial price to attract quickly a large number of buyers. Dell has used this strategy to penetrate the PC market and sell high quality products through direct channels with low cost. For successful implementation of this strategy, the market must be price sensitive, so that a low price to spur market development.

Because the high-tech companies diversify the product range in a very short time, it is essential that they adopt a pricing strategy for the product mix. When the product in question is part of a product mix, the company seeks to set a price that maximizes the profit of total product. This work is difficult because it have to consider the following issues:

Product line - setting different prices for different models of the same product lines or for different characteristics. (Sony offers its customers several lines of televisions from the handheld to 3D TVs);

Optional accessories and products – setting the price according to the consumer desire or their intention to use complementary products (e.g. mobile phone with a memory card);

Included products (captives) – setting the price for the whole complex of products (e.g. mobile phone, housings parts and protective covers).

Some time after launch, companies can adopt a strategy of adjusting prices for each target segments determined by the types of customers, geographical area or market conditions. The company may use discounts at certain times to reward customers or practice price discrimination based on customers, locations or products. Pricing strategy envisages also the value attached to the product by after-sales service (training for using, maintenance, repair, etc.). Also, if products are traded internationally, price levels should be adjusted.

Psychological price strategy is also often used by market leaders, based on the

theory that consumers perceive higher priced products as having higher quality. Only when consumers can appreciate the product quality by remember past experiences with this product, they look less for the price and more for the quality of the product [5].

Many producers of consumer high-tech products earn significant revenue from after-sale service [10].

Price promotions or temporary discounts are sometimes offered to induce trial or to overcome consumer resistance to adoption of high-tech innovations. Sellers need to consider the long-term impact of their promotions, especially since these could have a negative impact on brand equity [10].

Price is a very important strategic tool for high-tech companies. It is a key reference for product positioning being both a quality indicator and an indicator of competitiveness [3].

5. Conclusions The role of pricing in any market is to transfer rights of the product to the buyer, in exchange of payment. The high-tech company has a taught mission regarding the price setting. Given the current market context, policies and strategies for high technology products of major companies aim to create innovative products with high quality, highly customized by the features and services included, aiming to provide an enjoyable and easy experience for users. Before setting a price, the firm must choose the strategy according to the target market and product positioning. Pricing decisions should be consumer oriented because he is the one who will decide if a product price is the right one. The company have to understand how the consumer will use the products and it must calculate customer costs. High-tech consumers don’t seek to buy cheap


products but products whose price reflects their value. The root of most pricing challenges is that the product doesn’t deliver tangible value to the customer. The product value must be quantifiable because, otherwise the pricing strategy is pointless. In high-tech industry pricing models change rapidly as the technology matures, as more competitive offerings are available. References 1. Blythe, J.: Marketing Strategy.

McGraw-Hill 2003. 2. Bridges, E., Coughlan, A.T., Kalish, S.:

New Technology Adoption in an Innovative Marketplace: Micro and Macro Level Decision Making Models. In: International Journal of Forecasting 1991 nr.3, vol.7, p. 257-270.

3. Dovleac, L., Bălăşescu, M.: Marketingul Inovaţiei (Marketing of Innovations). Braşov. Editura Universităţii Transilvania din Braşov, 2012.

4. Fisk, P.: Geniu în Marketing (Marketing Genius). Bucureşti. Meteor Press 2006.

5. Gamble, P.R., Tapp, A., Marsella, A., Stone, M.: Revoluţia în Marketing (Marketing Revolution. The Radical New Approach to Transforming the

Business, the Brand & the Bottom Line). Iaşi. Polirom, 2008.

6. Gardial, S.F., Clemos, D.S., Woodruff, R.B., Schumann, D.W., Burns, M.J.: Comparing Consumers Recall of Prepurchase and Post purchase Product Evaluation Experiences. In: Journal of Consumer Research, March 199, nr.20, p. 548-560.

7. Gross, N., Coy, P.: The Technology Paradox. In: BusinessWeek, March 1995, p.76-84.

8. Kotler, Ph.: Conform lui Kotler (According to Kotler: The World’s Foremost Authority on Marketing Answer Your Questions). Bucureşti. Brandbuilders, 2005.

9. Lefter, C. (coord.), Brătucu, G., Bălăşescu, M., Chiţu, I., Răuţă, C., Tecău, A.: Marketing (vol.II). Braşov. Editura Universităţii Transilvania din Bralşov, 2006.

10. Mohr, J., Sengupta, S., Slater, S.: Marketing of High-Technology Products and Innovations (3rd ed.). Prentice Hall 2010, p.358-366.

11. Myer, R.: Suppliers – Manage your Customers. In: Harvard Business Review, nov-dec 1989, 67, p.160-168.

12. Shapiro, B.P., Jackson, B.B.: Industrial Pricing to Meet Customer Needs. HBR nov-dec 1978, 56, p.119-127.

13. www.evolio.ro.


BRAND VALUATION METHODOLOGIES AND PRACTICES

L. DUGULEANĂ1 C. DUGULEANĂ2

Abstract: There are few companies which act on the market of brand management; they offer ranking lists for top brands in certain industries, activities, countries, regions or just global brands. The rankings of best global brands are different, depending on the company which elaborated them. The brand valuation methods are subject to a standard and some guideline notes, but they represent rather a niche for these companies of brand rankings. The brand value which contains future aspects, combined with difficulties in the valuation of the intangible assets of brands, analysed in a dynamic and complex global framework, becomes very difficult to be estimated. Brand owners and investors are interested in the brand potential value, considered to be the creative value force on markets. The paper brings forth some common aspects and some criticism of brand valuation methodologies and practices. Some questions about the credibility of the ranking lists of best global brands arise. Key words: brand equity, brand valuation, brand rankings.

1 Dept. of Management and Economic Informatics,Transilvania University from Braşov. 2 Dept. of Finances, Accounting and Economic Theory, Transilvania University from Braşov.

1. Introduction Well known companies create, develop, manage brand values and promote successful brands. They produce annual rankings of top 10, top 50 or top 100 Best Global Brands, as Single or as Corporation Brands, for certain countries, regions, within envisaged industries - at World or European level. Such companies are: Interbrand, Millward Brown Optimor which produces BrandZ list, the European Brand Institute in Vienna, Brand Finance, Global Finance and many others.

Interbrand was founded in 1974 and has now nearly 40 offices in Asia, America, Europe and Africa, being one of the world’s largest brand consultancy companies. Since 2000, when the report “Best Global Brands” was launched, each year Interbrand has continued this commitment of promotion of the “brands as key value creators for business and society” (www.interbrand.com). About its BrandZ, Millward Brown Optimor (MBO) says that it represents a database that provides a “detailed, quantified, understanding of consumer’ decision-making worldwide” and “the most reliable, comprehensive and useful brand valuation ranking available” [14].


BrandZ reports cover two million consumers and more than 10,000 different brands in over 30 countries.

Eurobrand is a body of European independent experts for brand, patent and IP valuation. The Eurobrand studies are made for 3,000 brand corporations in 24 countries and within 16 industries of Europe, America and Asia.

Brand Finance and Global Finance are specialized in producing financial rankings and studies about best market banks, at regional and global level. Brand Finance is considered to be one of the world’s leading brand valuation and strategy consultancy. Brand Finance produces the most valuable football brands, the most valuable cosmetics brands, the most valuable nation brands, the most valuable IT services brands and other rankings. Global Finance produces all kind of reports and also “The Annual Report on Nation Brands” [27].

2. Brands create business value

The importance of brand has been well recognized over the last decade. In 2002, Interbrand and J.P. Morgan [8] established that brands bring one-third of shareholder value [9].

During the ’70s, the world thought that brands were words for logo. Nowadays these ideas have changed and the practice has proved that brands have power to increase business value and to bring high profits to the companies which created them.

Brands comprise promises of values and benefits, in consistent and clear form. The choices of brands are made by companies, investors and others stakeholders and by their consumers. The most credible promotion of brands is made by their relevant consumers in the most confident way. The potential clients would like to enjoy the same advantages offered by brands. They would like to be considered by other individuals as belonging to the

segment of consumers having certain features, age, social positions and consumption habits, to be different as compared to the others.

BrandZ™ of Millward Brown [30] considers that the brand gets attraction power through the following aspects: to be meaningful in understanding individuals’ expectations and needs, to be different, being positively unique and setting trends, and to be salient in a spontaneous defining of the key needs.

Brand value emphasized the value of intangibles; the stock market valuations of the brand companies have been increased above the stock market value, visible especially in the mergers and acquisitions, since late ’80s. A great proportion of the actual business value is derived from intangibles.

The economic impact of global brands results from choices of customers, employees’ commitment, investors’ decisions and legal actions of national authorities.

The durability of some brands has demonstrated not only their commercial success, but also a global, large recognition of the brand, with socio-cultural and environmental implications. Such a brand is Coca-Cola, one of the world’s most valuable brands, which is more than 118 years old; the majority of the most valuable brands are around more than 60 years old. The brands provide a long-term competitive advantage. 3. Brand equity and strong brand assets

The historical practices of marketing

have developed the concepts of mass marketing and segmentation. Gradually, the necessity has risen to approach “brand as asset”, meaning brand equity.

The so called prophet David Aaker states in his article “Brands as Assets”, published in the April 2014 issue of

L. DUGULEANĂ et al.: Brand Valuation Methodologies and Practices 45

Marketing News: “Conceiving of brands as assets started a dramatic and far-reaching cascade of change. It altered perceptions of marketing and brand management, how brands are measured and the role of marketing executives” [1].

Considering brands as assets moved brand management from the tactical and reactive approach to the strategic and visionary approach.

The brand is interconnected with the organizational culture and values, as well as with the business strategy of the organization which it represents. So, marketing got an active and imperative role in the process of creating and managing the business strategies, based on building customer loyalty, awareness, associations, management of customers’ relationships– all these issues forming the “brand equity”. Other important aspects have been developed regarding brand equity related to strategic insights of market, growth strategies based on innovations or brand portfolio strategies and global brand strategies.

David Aaker in “Managing Brand Equity” defines it as “the set of assets and liabilities linked to a brand’s name and symbol that adds to or subtracts from the value provided by a product or service to a firm and/or that firm’s customers”[9]. The American Marketing Association defines “brand equity” as “the value of a brand”, but not just as a financial value [9].

Focusing on brand equity, the strong brands offer competitive advantage and profitability on the long-term. The new tendency shows the development of brand portfolio strategy.

A brand portfolio includes sub-brands and branded innovations in an emphasized synergy. Within a brand portfolio, the brand components have their own roles and they can change over time, through horizontal, vertical and functional extensions. The brand portfolio strategy

allocates resources over brands and markets in order for each brand component to be successful.

There are organizational units based on products, markets or countries which are placed near the customer, in order to adapt the brand to customers’ needs. These practices can create brand confusion caused by different problems and inefficiencies. But a centralized coordination across the countries and products that use the brand could avoid all kind of problems.

Brand managerial culture gives life to the brand within the organization, starting with the beliefs of its own employees who understand to buy-in. The building strategy of the brand starting with the internal approach could prove difficult to apply. In the cases of B2B organizations or those in the high tech field, it would be hard to apply the values of brand managerial culture.

Millward Brown Optimor (MBO) concludes that “strong brands have the power to create business value. They impact much more than revenues and profit margins. Strong brands create competitive advantages by commanding a price premium and decrease the cost of entry into new markets and categories. They reduce business risk and help attract and retain talented staff” [11].

Interbrand believes that a strong brand improves business performance [12]. A strong brand influences customer choice and built loyalty. Factors such as power forces of attraction, retention, motivation at lower cost of financing are considered by Interbrand as features of a strong brand. 4. Brand value

In the book “Marketing Management”, Kotler and Keller refer to the brand value as “the added value endowed to products and services” [7].


Brands have a latent financial potential, recognized in the form of an acquisition premium in mergers and acquisitions or through its ability to enter new markets or to develop itself in other categories.

The concepts of “brand value” and “brand equity” are often confused, being accepted that the former refers more to the financial value of a brand. Kotler and Keller use the concept of “brand valuation” as “an estimate of the total financial value of the brand” [7].

Marketing specialists do not have an accepted definition about brand value or brand valuation yet. 4.1. Brand valuation and brand

rankings during 2011-2013

Valuation is as old as modern finance, starting from the ’50s. Yves Courtois says that “Valuation now touches on the most profound aspects of corporate finance, strategy, financial statements analysis, accounting, economics, geopolitics, behavioural finance, and risk management” [3]. All these aspects of valuation must be considered by brand valuation methods.

Brand valuation consists in measuring the brand intangible assets.

The importance of brand valuation for brand owners and for the corporate brand is emphasized by the brand ranking companies. The investments decisions can be taken in better ways using the information offered by brand valuation studies.

All the brand ranking companies as Interbrand, Millward Brown Optimor (MBO), European Brand Institute and others developed their own methods for brand valuation. Some of them are well considered by the companies, marketers and consumers.

Analysing the brand valuation method of each company of brand management and

consultancy for brand strategies, the common aspects considered for ranking can be emphasized.

The Interbrand valuation method considers the following aspects of the brands: the financial power, the brand role in buying decision of consumers and the probabilities of obtaining ongoing and future revenues generated by the brand.

Millward Brown Optimor shows that BrandZ is the only brand valuation tool that finds out how much the brand alone contributes to the corporate value. Finding the core brand value of corporate portfolio, MBO calls this “brand contribution”. MBO claims that this approach differentiates it from other companies’ methods. MBO dates back eight years.

Because of different approaches, the results of rankings look different.

Coca Cola was the first in the Interbrand 2011 ranking, followed by IBM, Microsoft, Google and GE Company, sponsor of the 2012 London Olympics, known as the world’s maker of “real” things, by launching its GE Works, an integrated communications platform. McDonald’s - the fast-food chain - was ranked 6th. Apple, leader on Brandz, was only on the 8th place for Interbrand, 9 positions higher as compared to the previous year [7].

“BrandZ Top 100 Most Valuable Global Brands 2011” of MBO declared the following brands, in the following order: Apple, Google, IBM, McDonald’s, Microsoft and Coca Cola on the 6th place [21].

The European Brand Institute in “Top 100 Brand Ranking - Brand Corporations Worldwide” offered for 2011 the following order: Apple, Coca Cola, Microsoft, Google, IBM and McDonald’s on the 6th [11].

Coca Cola appeared in 2011 on the first place at Interbrand’s, the 6th place on BrandZ’s list and on the 2nd place at Eurobrand 2011.


The Best Global Brands 2012 of Interbrand’s places Coca Cola first, which is followed by Apple with an incredible growth rate of +129% as compared to 2011, IBM, Google and Microsoft being on the 5th place. McDonald’s is placed the 7th, because the GE company was designated on the 6th place [17].

In 2012, MBO established that in the top of the 100 most valuable companies in the Brandz ranking, the brands in the technology sector occupied four of the first five places, in the following order: Apple, IBM, Google and Microsoft the 5th place, because McDonald’s was the 4th. [22]

The top of the best global brand corporations, made by Eurobrand in 2012, keeps its order from 2011: Apple, Coca Cola and Microsoft, and then IBM changed the place with Google. McDonald’s was designated on the 8th place in 2012 [12].

In 2013, the Interbrand ranking was: Apple, Google, Coca Cola, IBM and Microsoft followed by GE and McDonald’s on the 7th [15].

BrandZ of “Top 100 Most Valuable Global Brands 2013” recognized the first three places for the technology sector: Apple, Google, IBM and the following two places for the fast food and soft drinks field: McDonald’s, Coca Cola respectively. Microsoft is on the 7th place [20].

Eurobrand Global Top 100 in 2013 established that the first five brands were: Apple, Coca Cola, Google, Microsoft and IBM. McDonalds was the 6th [13].

The conclusion is that the different valuation methods conduct to different ranking for the same brand, having different brand values, expressed in different unit measures.

For 2013 ranking, Eurobrand writes “The most valuable global brand Apple with a brand value of EUR 110,034 bn …” [13]. Interbrand established for Apple, in 2013, a global brand value of 98,316$m.

Meantime BrandZ of “Top 100 Most Valuable Global Brands 2013” declared a brand value for Apple equal to 185,071$m.

Thus the need appears for a unique valuation tool to establish the brand value. There could be an agreement between the ranking companies about some standards or a common point of view concerning a certain valuation method [4].

The companies themselves take their brand value seriously and communicate it to their investors, from time to time.

4.2. Brand valuation standard

The International Valuation Standards Council (IVSC) creates international valuation standards (IVSs) [19] and publishes updated Guidance Notes (GN), such as the revised GN 4, in February 2010, on the valuation of intangible assets, such as: “brands, intellectual property and customer relationships, and gives guidance on how these are applied” [18].

In 2010, the International Organization for Standardization (ISO) created the standard BSI ISO 10668 Brand Valuation: Requirements for monetary brand valuation. This standard offers a framework for the procedures of monetary brand measurement, establishing objectives, bases, approaches and methods of valuation [9]. David Haigh, the chief executive of Brand Finance and member of the international committee that established BSI ISO 10668, remarked that this standard was a huge step in the right direction, because ISO has considered brand valuation important enough as to elaborate a standard for it.

The standard identifies three kinds of analyses in a brand valuation procedure: legal, behavioural and financial. It was based on the specialty literature developed at the beginning of the ’90s by Arthur Andersen (1992).


The financial analysis consists of three levels of the most common approaches in brand valuation: market approach, cost approach and income approach.

The standard BSI ISO 10668 stipulates that a legal analysis and a behavioural analysis have to be undertaken before the financial analysis, in order to have all the information about the assessment of the legal rights over the brand, the legal owner, the legal jurisdiction and the behavioural analysis of the brand strength for determining the monetary proportion attributable to the brand and also the risk connected when determining the discount rate. The legal and behavioural analyses refer to financial data which are used then in the financial analysis.

The market approach of financial analysis measures the value of assets similar to those valued. Data about the prices of reasonably comparable brands are adjusted to determine the difference considered as the compensation paid for the analysed brand. It seems to be difficult because it supposes finding comparables from the industries where the brand originates, based on the publicly available information about transactions and license agreements which either are a lot or can miss. The market approach is considered “relief from royalty” [2] and it is preferred because it estimates the future benefits of the actual market value for comparables of similar type and quality. For customers, the benefits can be earnings, cost savings, tax deductions. For enterprises, the benefits discount the expected cash flows to their actual values at a rate of return that comprises the risk-free rate of using the funds, the expected rate of inflation, and the risk associated with the investments. There could be problems related to estimating the future income, choosing the appropriate discount rate, and finding comparables, when it is generally accepted that the brand is somewhat unique.

According to the standard BSI ISO 10668, the cost approach for brand valuation measures the cost of building the brand, its replacement or its reproduction. But just the reason that the brand is unique makes its reproduction difficult! The cost approach can be used together with the income approach.

The income approach, as defined by the standard, “measures the value of the brand by reference to the present value of the economic benefits expected to be received over the remaining useful economic life of the brand” [6]. The cash-flow streams estimated after-tax and attributable to the brand for the remaining useful economic life are calculated to the present value based on a discount rate. Considered to be the best approach, it has its own difficulties, because of various ways of determining the cash-flows, the kind of these flows and the effective way of applying the royalties’ relief method.

The present value of royalty payments for the ownership of the brand is calculated using a royalty rate. This rate is determined based on the available data about licensing arrangements for comparable brands, as close as possible to the characteristics and size of the analysed brand.

The standard considers the brand valuation rather a niche practice instead of a mainstream one. The standard ISO 10668 is rather conventional and the difficulty of understanding the value and the strength of the intangible asset of the brand lets enough freedom to the companies for more technical analyses of financial flows.

4.3. Brand valuation methodologies in

practice

The Interbrand brand valuation methodology was the first one which met the international standard for monetary requirements, ISO 10668 in 2010.


The valuation method of Interbrand considers the Brand strength framework, which assesses not only the past brand performance, but also its probable future performance, on the basis of internally and externally organizational brand management.

The criteria established by Interbrand in order to include the brands in the annual Best Global Brands reports envisage the following aspects: “to be global, visible, and relatively transparent in financial results” [16], closely related to corresponding indicators: - The brand must be a global one,

meaning that more than 30% of revenues are obtained from outside the brand’s home region; the brand has a public profile recognized beyond its own market.

- The brand is successfully sold over geographical and cultural boundaries – meaning that the brand is present on at least three major continents, having a large market coverage;

- The financial performance of the brand is sustained by publicly available data and the evolution of the economic profit must be ascending over the long term, proving that the brand return is above its operating and financing costs.

There are some global brands which are absent from the rankings because either the financial data are not available, or the companies use a variety of brands on international markets, instead of the main one.

There are also the cases of brands within certain industries which are nationally oriented, such as: telecommunications with consequences over the airlines brands or in the pharmaceutical field where customers build the buying decision based on the relationship with the product brand, rather than on that with the corporate brand company.

Interbrand considers three steps in the brand valuation methodology: analysis of financial results based on brand, the brand’s role in the buying decision, and the analysis of brand strength.

The financial analysis is made on the overall financial return, calculated as the economic profit after-tax, minus the charge for the capital use in obtaining the brand, meaning the entire platform of manufacturing capacities, employees and distribution channels. The forecasting values of company’s revenues and profits for a five-year horizon are the bases of the valuation model. The rate of charged capital is calculated on the basis of the weighted average cost of capital, corresponding to the industry of the brand.

The role of the brand is measured by the indicator the Role of Brand Index (RBI), calculated as a proportion of the brand choice influence in forming the demand. Interbrand uses “depending on the brand, from one of three methods: primary research, a review of historical roles of the brand for companies in that industry, or expert panel assessment” [16]. RBI is a coefficient which is multiplied by the economic profit of the branded products or services in order to find the volume of earnings due to the brand influence.

The analysis of the brand strength has the purpose to establish a score on a 0-100 scale, for this indicator, based on the evaluation of ten key factors concerning the internal and external brand management of the company. These factors are evaluated relative to other brands from the same industry and to other world-class brands. The Brand Strength Score (BSS) shows the robustness of the brand and its sustainability on the market; it is used for establishing a brand discount rate to update the brand earnings to the present value.

In time, the brands are suffering different changes, such as: repositioning, a new


architecture, extension or rebranding. These activities need financial resources and their success and expected return are accompanied by uncertainty, in different scenarios. Estimation of the most possible expected return is the result of a lot of simulations based on data about the customers’ behaviour, economic and social status of world and national economies, the dynamics of markets.

The BrandZ brand valuation methodology consists of three steps of calculation: financial value, brand contribution and brand value.

When a corporation owns one brand, all the corporate earnings belong to the brand. When a corporation owns a portfolio of brands, then the portions of earnings for each brand can be calculated. The sources of BrandZ are the financial annual reports and other sources of data from Kantar Worldpanel, Kantar Retail. The purpose is to obtain a metric called attribution rate. Multiplying this coefficient by the corporate earnings, the branded earnings are obtained, the amount of corporate earnings of a particular brand.

The BrandZ formula of brand valuation, also contains the future estimation of earnings, multiplying the branded earnings by a coefficient called brand multiple. The result is the financial value of the brand. Bloomberg data offers information for calculating the brand multiple, which is similar to that of the financial value of market stocks.

The brand contribution measures the intangible asset of the brand, the core brand value, cleaned of the influences of rational factors, the part of financial value due to the brand’s uniqueness, its generating power of demand, loyalty, desire and style. Brand contribution measures the influence of the brand alone on earnings, on a scale of 1 to 5 (5 highest).

The brand contribution is a proportion of the financial value attributable to the core brand. The financial value is multiplied by the brand contribution, obtaining the brand value. The brand value measures the intangible asset of the brand; it is a source of data for shareholders. The methodology used by Brand Finance in the brand valuation process is in accordance with the standard used in the three approaches, depending on the cases. The market approach, by benchmarking the transactions of similar brands bought or sold obtains the brand value. The cost approach calculates the cost for recreating a brand of an equivalent economic utility. The income approach estimates the value of the future income of the brand as net present value, using the methods of royalty relief, price premium, volume premium, margin uplift, cost savings, economic substitution and income split methods [26] 5. Conclusions

The methodologies of brand valuation broadly comply with the recommendations of the standard, which was elaborated based on the brand valuation practices of the most important brand management and ranking companies in the world. The specialists who elaborated the standard are directly involved in the leading boards of these companies. The financial analysis is a common phase to all the methodologies applied for brand valuation and also the consideration of the future benefits and economic returns is accepted by all these companies in their methodologies of calculation of the brand value. The identification of the contribution of the brand strength is also a common element, trying to separate from the global earnings that part obtained mainly based on the brand core. The methods of measuring the intangible brand asset and


establishing the brand equity is a difficult step which makes the difference between brand management companies. Some criticism can be formulated for these approaches. At the beginning of each year brand management companies offer their rankings for that year, considering the past evolution and the brand potential value. But none of these companies offer information at the beginning of the next year about some adjustments between the effective evolution of the brand value and their estimated brand value. Even so, maybe they are trying to adjust their algorithms of calculating the brand contribution and in the end the way of obtaining the brand value. Another criticism for the methodologies of these companies is the different usage of methods to establish the brand financial value, choosing one of the three approaches: market, cost or income approach.

Our proposal is to use all these three approaches for calculating the brand financial values or to choose only one approach for all the considered brands in the ranking list. Using different methods makes the results difficult to be compared. The principle of homogeneity is not respected for all the brands and as a consequence their ranking cannot be trustful.

The role of standard must be important in this direction in order to establish the common procedures to be followed.

But it seems that the competition on this market of brand rankings is still very powerful and if their different studies are considered, why should they reach a common point? In this way, all the stakeholders are contented: the brand owners and the investors, for greater profits, the customers enjoy that their preferred brands exist in certain top positions of the rankings, offering them feelings of pride and also the companies of

brand management and rankings, which seem to be interested in maintaining this stability in time, and equilibrium on the brand markets. References

1. Aaker, D.: Brands as Assets. In:

Marketing News, April 2014, https://www.ama.org/publications/MarketingNews/Pages/brands-as-assets.aspx

2. Contractor, J.F.: Valuation of Intangible Assets in Global Operations. Westport, USA, 2001, www.quorumbooks.com.

3. Courtois, Y.: Why Valuation Must Continue to Evolve. In: CFA magazine / Nov – Dec 2010, https://www.kpmg.com/LU/en/IssuesAndInsights/Articlespublications/Documents/CFA-Magazine-Nov-Dec-2010.pdf

4. Glynn, J., Woodward, C.: Global valuation standards: achievable?, 26 Feb 2014, PwC, http://www.pwc.com/gx/en/audit-services/corporate-reporting/publications/

5. Haigh, D.: Brand Valuation: Measuring and Leveraging your Brand. Brand Finance plc, Institute of Canadian Advertising, Toronto, Ontario, May 2000, www.ica-ad.com

6. Roberts, S.: Brand Valuation: the methodologies. In: Intellectual Property Magazine, Feb. 2011, p. 49.

7. Best Global Brands, http://www.gfmag.com/tools/global-database/economic-data/11936-best-global-brands.html#axzz2ynUICnvO

8. http://kluwerarbitrationblog.com/blog/2011/11/29/valuation-approaches-and-the-financial-crisis-part-1-%E2%80%93-market-methods/, 29.11.2011


9. http://shop.bsigroup.com/upload/Standards%20&%20Publications/IPM_Brand_Valuation_article.pdf

10. http://www.brandchannel.c.om/papers_review.asp?sp_id=357, Interbrand, Brand Valuation: The financial value of brands

11. http://www.eurobrand.cc/studien-rankings/eurobrand-2011/, eurobrand2011-BRAND-RANKING-Brand-CorporationsTop-100worldwide2011.pdf

12. http://www.eurobrand.cc/studien-rankings/eurobrand-2012/, eurobrand+2012+Global+Top+100.pdf

13. http://www.eurobrand.cc/studien-rankings/eurobrand-2013/, eurobrand+GLOBAL+TOP+100+2013.pdf

14. http://www.gfmag.com/tools/global-database/economic-data/11936-best-global-brands.html#ixzz2ya7mGd6L

15. http://www.interbrand.com/en/best-global-brands/2013/Best-Global-Brands-2013.aspx

16. http://www.interbrand.com/en/best-global-brands/2013/best-global-brands-methodology.aspx

17. http://www.interbrand.com/en/best-global-brands/previous-years/2012/Best-Global-Brands-2012.aspx

18. http://www.ivsc.org/content/ivsc-publish-revised-guidance-valuation-intangible-assets

19. http://www.ivsc.org/products 20. http://www.millwardbrown.com/Brand

Z/Top_100_Global_Brands.aspx, 2013_BrandZ_Top100_Report-1.pdf

21. http://www.millwardbrown.com/BrandZ/Top_100_Global_Brands/Previous_Years_Results/2011.aspx, 2011_BrandZ_Top100_Report-1.pdf

22. http://www.millwardbrown.com/BrandZ/Top_100_Global_Brands/Previous_Years_Results/2012.aspx, 2012_BrandZ_Top100_Report-1.pdf

23. http://www.pwc.com/en_US/us/cfodirect/assets/pdf/point-of-view-global-valuation-standard.pdf, Sept. 2013, PricewaterhouseCoopers LLP.

24. https://www.jpmorgan.com/pages/jpmorgan

25. https://www.kpmg.com/LU/en/IssuesAndInsights/Articlespublications/Documents/CFA-Magazine-Nov-Dec-2010.pdf

26. www.brandfinance.com 27. www.gfmag.com 28. www.gfmag.com/tools/global-

database/economic-data/11936-best-global-brands.html#axzz2ya7KD9Ip

29. www.interbrand.com 30. www.millwardbrown.com


ATTITUDES, OPINIONS AND BEHAVIOR OF MANAGERS ON APPLICATION OF ECOLOGICAL MARKETING IN THEIR BUSINESS - TESTING HYPOTHESES -

CASE STUDY: BRAŞOV COUNTY

Mihaela FUNARU1

Abstract: This paper presents results of a quantitative research which studies the attitudes, opinions and behavior of managers of companies in Brasov on application of ecological marketing in their business. The research method used is a sample survey based. Research objectives are considering to determine the extent to which managers know and apply ecological marketing, reasons for which the ecological marketing application is a long-term strategy, views on the opportunity to apply ecological marketing etc. Conclusions drawn from testing of hypotheses of research show that, generally, managers of local firms consider ecological marketing as a long-term strategy of the company. The percentage of managers that applied ecological marketing in companies does not exceed 60%. A relatively small percentage of respondents believes that the application of ecological marketing within firms is a necessity, a social responsibility that can bring long-term benefits to companies. Key words: green marketing, ecological marketing, inquiry based survey, quantitative research..

1 Christian University “D. Cantemir” from Brasov, Romania.

1. Introduction

Ecological marketing research is used to explore the opportunities and challenges of marketing, monitor marketing performance, measure and improve marketing actions and a better understanding of marketing and environmental markets. [7, p. 7]

Marketing research plays an important role in the marketing system because they provide the information necessary for its operation. However, small and medium

enterprises, because of the economic crisis, have reduced the budget for marketing activities. [10, 2013, p.144]

The main method of obtaining primary data is survey-based investigations. This involves communication with subjects that are part of a representative sample of the population under consideration.

Specific to this method is the use of structured questionnaire. This refers to a degree of standardization imposed by the data collecting process. [9, 2007, p.183]

The main methods of communication


with subjects, depending on the way of data collection, are [9, 2007, p 184 -193]: face to face investigation; survey by post; survey by phone; electronic methods.

Survey face to face - Face to face interviews are methods often used in marketing research involving a dialogue between operators and the respondent.

Advantages of investigation are [9, 2007, p.183]:

1 questionnaire is easy to administer; 2 obtained data are reliable because

the answers are limited to the predefined;

coding, data analysis and interpretation is made relatively simple.

2. Quantitative research – generally data

Type of Research

Quantitative research seeks to deepen ecological marketing topics, analyze the importance and impact that it has or that it will have on firms, the extent to which application of green/ecological marketing by Romanian companies will bring them benefits in the short, medium and long term. [6, 2012]

The research instrument is a questionnaire with 36 questions. The questionnaire survey was drawn from the objectives and it was directly administered to the sample members, at their headquarters.

The answers were collected using the direct investigation method. Face to face interviews were conducted over a period of 45-60 minutes. Respondents are persons in the management of the companies, namely, general managers, marketing executives, responsible for environmental managers. It was intended to complement operative questionnaires, subjects answering all the questions contained in the questionnaire, and the answers were complete and accurate.

Population under Investigation Studied population consists of

enterprises / units / economic entities which are members of the Chamber of Commerce and Industry Brasov.

The observation unit is the individual, the person who actually provides this information, namely the top management staff of the companies.

The unit of analysis is the business / units / economic entities which are members of the Chamber of Commerce and Industry Brasov.

The sampling unit is the business / units / economic entities which are members of the Chamber of Commerce and Industry Braşov.

Sample’s Size and Structure To determine the sample size for random

sampling was considered a level of error of ± 5% and a confidence level of 95%. According to z distribution table, to these values corresponds the value of 1.96.

Due to lack of information about p value, it will be considered by 50%, which leads to the maximum standard deviation can be obtained for percentages (binary scale).

The sample’s size for percentage can be determined using the following formula:

2

2

Eqpz ××

=n

q = 100 – p where:

z˛ - squared coefficient corresponding z confidence level;

p - The estimate of the percentage in case of success;

q - The estimate of the percentage in case of failure;

E - The permissible error in percent; n - The sample’s size. Thus, we have:

3845²5050 1,962

== ××n According to this formula, the size of

sample is of 384 people.

M. FUNARU: Attitudes, Opinions and Behavior of Managers on Application of Ecological … 55

Chosen sampling method is simple random sampling with non-return ball or simple random sampling without return.

In this case, the sample changes from a drawing to another, and the probability of inclusion in the sample of unit is not same anymore for each unit. This method assumes that a sampling unit can be sampled once. In marketing research this method provides more accurate results and provides great advantages in operational terms" [8, 2004, p.134].

Limits of the Research Although quantitative research produces

a large number of information and allows generalization of the results to the entire population, there are some limitations in terms of their usefulness [6, 2012].

1. Providing erroneous data. Respondents may be influenced by

characteristics of interviewers and provide erroneous data.

2 .Few data that can be obtained. Quantitative research is based on a more

rigid structure and a limited number of questions to answer. This feature is a potential limitation in terms of complexity and level of detail of recorded responses.

3. The duration of time of research is very long

The period of time for conducting an interview lasts up to 1:00 to 1:30 hours. The number of interviews per day is limited. All this makes that time for completion of all questionnaires to be generally high for several weeks.

Subjects of research as part of management of companies are very busy people, so their willingness to participate in the interview is lower. 4. Costs of interviews are very high.

Costs refer to both the research staff to be paid, motivated, prepared, and supervised, and the costs of obtaining information about the companies that were the subject of research that are extremely high.

3. Testing hypotheses The Presentation of the Research

Hypotheses The type of research presented in this

paper is descriptive – explanatory quantitative research.

The research can be regarded as descriptive because it describes the situation in Braşov County on the application of ecological marketing by managers in their business.

The research is based on the following general assumptions:

Hypothesis 1: 70% of managers of local firms considers ecological marketing a long-term strategy of the company.

Hypothesis 2: 60% of managers of local firms applies ecological marketing mix in their companies.

Statistical hypotheses linking the general assumptions and variables investigated are:

Hypothesis 1: H0: Not more than 70% of

managers from Braşov’s companies consider ecological marketing a long-term strategy of the company.

H1: More than 70% of managers from Braşov’s companies consider ecological marketing a long-term strategy of the company.

Hypothesis 2: H0: Not more than 60% of the

managers of local firms apply ecological marketing mix in their companies.

H1: More than 60% of the managers of local firms apply ecological marketing mix in their companies.

Quantitative marketing research conducted had the following objectives [6, 2012]:

1. Determining the extent that managers of companies from Brasov consider that the application of ecological marketing would be a good long-term strategy.


2. Determining the extent that managers of companies from Braşov apply ecological marketing mix in their companies.

The Tests of Research Hypotheses

Hypothesis 1 states that 70 % of managers from Braşov’s companies consider ecological marketing a long-term strategy of the company.

H0: Not more than 70 % of managers from Braşov’s companies consider ecological marketing a long-term strategy

of the company. H1: More than 70 % of managers from

Braşov’s companies consider ecological marketing a long-term strategy of the company.

Test Statistics

In your opinion, which is the main reason that you consider appropriate to apply ecological marketing in your business?

Table 1 The distribution of the observed frequencies and of the expected frequencies

Observed N Expected N Residual 1 = is a long-term strategy 21 60,8 -39,8 2 = brings market benefits to company 80 60,8 19,3 3 = contributes to sustainable economic development

57 60,8 -3,8

4 = is a social responsibility, a necessity 85 60,8 24,3 Total 243 Source: authors’ processing of data from quantitative research The calculated values for χ2 test Table 2

In your opinion, which is the main reason that you consider appropriate to apply ecological marketing in your business?

Chi-Square(a) df Asymp. Sig.

Source: authors’ processing of data from quantitative research a 0 cells (,0%) have expected frequencies

less than 5. The minimum expected cell frequency is 60.8

If χ2calc ≤ χ2α; df – H0 hypothesis is accepted, there are no differences between the variable distribution and theoretical distribution. [2, 2006, p.128-131; 3, 2009, p. 144-159]

If χ2calc > χ2α; df – H1Hhypothesis is accepted, there are differences between the variable distribution and theoretical distribution.

Number of degrees of freedom (df) is calculated based on the number of lines of

the table of frequencies (the number of categories of responses): df = r-1= 4-1= 3 χ2 calc = (21- 60.8)2 / 60.8 + (80-

60.8)2 / 60.8 + (57-60.8)2 / 60.8 + (85 – 60.8)2 / 60.8 = 42.02 χ2 0.05; 3 = 7.81 χ2calc = 42.02 > χ2 0.05; 3 = 7.81, so

H1 is accepted, i.e. more than 70 % of managers from Braşov’s companies consider ecological marketing a long-term strategy of the company.

The table shows calculated value of test χ2 calc = 42,021 („Chi- Square (a)”, number of degrees of freedom (“df = 3”

M. FUNARU: Attitudes, Opinions and Behavior of Managers on Application of Ecological … 57

and the minimum significance level that can accept the alternative hypothesis H1 (“Asymp. Sig”).

Considering that minimum significance level is equal to zero and it is less than 0.05 (0.000 <0.05) the alternative hypothesis H1 is accepted.

Hypothesis 2 states that 60% of the managers of local firms apply ecological

marketing mix in their companies. H0: Not more than 60% of the managers

of local firms apply ecological marketing mix in their companies.

H1: More than 60 % of the managers of local firms apply ecological marketing mix in their companies.

H0: π = 60% H1: π > 60% (right-sided test)

One-Sample Statistics The Indicators of descriptive statistics at the sample level Table 3

N Mean Std. Deviation Std. Error MeanIn your opinion, do you apply ecological marketing mix, i.e. ecological product, ecological price, ecological distribution, in your company?

243 ,5679 ,49639 ,03184

Source: authors’ processing of data from quantitative research

One-Sample Test The obtained data after applying t Student test Table 4

Test Value = 0.6

t df Sig.

(2-tailed) Mean

Difference

95% Confidence Interval of the

Difference Lower Upper In your opinion, do you apply ecological marketing mix, i.e. ecological product, ecological price, ecological distribution, in your company?

-1,008 242 ,314 -,03210 -,0948 ,0306

Source: authors’ processing of data from quantitative research

In the sample that answered this question, the average of binary feature is 0.568, which means that 56.8% of respondents apply ecological marketing mix in their companies. Deviation value from the Sample average is 0,032.

Critical ratio value is t obs = -1,008. This is less than the value in Table Student t distribution for unilateral test t (0.05, 242) = 1.64 Therefore the null hypothesis H0 is accepted - we cannot guarantee a 95% probability that more than 60% of managers of companies in Brasov applies

ecological marketing mix in companies, even if this is the conclusion that can be drawn from the sample.

This decision we can take also to the minimum significance level that supports the alternative hypothesis (Sig. 2-tailed), which is greater than 0.05, which means that we cannot guarantee a 95% probability that percentage of those applying ecological marketing mix in their firms is different from 60% in the population studied. Therefore, the alternative hypothesis cannot be accepted, neither if


use unilateral test, because according to the null hypothesis, proportion in the population studied may be equal to 60%

4. Conclusions

The results of quantitative research

conducted among companies in Braşov County revealed the following conclusions:

1) More than 70% of managers of Brasov firms consider ecologic marketing a long-term strategy of the company.

2) No more than 60% of managers of local firms apply ecological marketing mix in their companies.

3) A percentage of 22.1% of respondents believes that the main reason for the application of ecological marketing in their companies is appropriate: it is “social responsibility, it is a necessity”, and 20.8% believes that the reason is that it “brings market benefits to the company”.

This information will be used to substantiate the marketing strategies of companies in Braşov County, Romania, in addressing industry sector. References

1. Balaure, V., (coord.): Marketing,

Ediţia a II-a revăzută şi adăugată (Marketing, second edition, revised). Bucureşti. Editura Uranus, 2002.

2. Constantin, C.: Sisteme informatice de marketing. Analiza şi prelucrarea datelor de marketing. Aplicaţii īn SPSS (Marketing information systems. Marketing data analysis and processing. Applications in SPSS). Braşov. Infomarket, 2006.

3. Constantin, C.: Curs Cercetări de marketing (Marketing Research: Distance Learning Course, 2009-2010. Brasov, 2009.

4. Cătoiu, I. (coord.), Bălan, C., Popescu, I.C., Orzan, Gh., Vegheş, C., Dănăţiu, T., Vrânceanu, D.: Cercetări de Marketing (Marketing research). Bucureşti. Editura Uranus, 2002.

5. Evrard, Y., Pras, B., Roux, E. : Market. Études et recherches en marketing. France. Nathan, 1993.

6. Funaru, M.: Marketingul ecologic – opţiune strategică în dezvoltarea firmelor româneşti (Eco-marketing strategic option in the development of Romanian companies). In: PhD diss. Braşov. Transilvania University of Braşov, 2012.

7. Gerhold, P.: Defining Marketing (or is it Market?) Research. In: Marketing Research, Vol. 5, nr. 4, p. 7

8. Lefter, C.: Cercetarea de marketing. Teorie şi practică (Marketing research. Theory and practice). Braşov. Infomarket, 2004.

9. Malhotra, N.: Marketing research. An applied orientation, Fifth Edition. New Jersey. Pearson Education International, 2007.

10. Nicolae, C.M.: Marketingul serviciilor de consultanţă financiară pentru IMM-uri. Studiu de caz pentru zona Braşov (Marketing of financial advisory services for SMEs. Case study for Brasov area). In: PhD Thesis, Braşov, Transilvania University of Braşov, 2013.


ARTIFICIAL SWEETENERS VERSUS

NATURAL SWEETENERS

N. A. NEACŞU1 A. MADAR1

Abstract: Carbohydrates are an important dietary nutrient which is mostly used to supply energy to the body, as well as a carbon source for synthesis of other needed chemicals. In addition, mono- and disaccharides are craved because of their sweetness. We present different types of sweeteners, which are the basic contents of foods which we consume every day and are demonstrated the positive and negative effects of natural and artificial sweeteners. Key words: artificial, carbohydrates, natural, sweeteners.

1 Dept. of Economic Sciences and Business Administration, Transilvania University of Braşov.

1. Introduction Natural sweeteners exist or are produced

by nature, without added chemicals or fancy machinery. The only sugars that are optimal to eat are wild, non-hybridized, seeded fruits, and the natural sugars and starches in living vegetables, trees, seeds, nuts, and roots. The following are considered natural sweeteners: maple syrup, honey, stevia, molasses, coconut sugar, date sugar, agave nectar and xylitol [4].

Artificial sweeteners, which are also called sugar substitutes, alternative sweeteners, or non-sugar sweeteners, are substances used to replace sugar in foods and beverages. They can be divided into two large groups: nutritive sweeteners, which add some energy value (calories) to food; and non-nutritive sweeteners, which are also called high-intensity sweeteners because they are used in very small quantities, adding no energy value to food1.

2. Natural sweeteners

If you have wandered into a natural food store lately, you might have noticed that the selection of sweeteners seems to have multiplied. Powders, syrups, and liquids with exotic-sounding names catch your eye, each claiming to be tastier, healthier, or more environmentally-friendly than plain old table sugar.

Sugarcane is a tropical grass that has been cultivated by humans for thousands of years. Making what we know as table sugar from sugar-cane can range from a relatively simple to a multistep process, and the final result varies, depending on the specific steps in the process. Light and dark brown, powdered, and granulated white sugars are all highly refined, while others, like those listed below, are made with fewer steps on the processing chain. Fewer steps benefit the environment, because less processing means less environmental impact. It also means that more of the vitamins and minerals that naturally occur in sugarcane remain in the


end product. All of these sugarcane sweeteners can be found in the baking aisle and/or bulk bins of natural foods stores. • Blackstrap molasses, unlike other sugarcane sweeteners, contains significant amounts of vitamins and minerals. “First” molasses is left over when sugarcane juice is boiled, cooled, and removed of its crystals. If this product is boiled again, the result is called second molasses. Blackstrap molasses is made from the third boiling of the sugar syrup and is the most nutritious molasses, containing substantial amounts of calcium, magnesium, potassium, and iron. When buying, consider choosing organic blackstrap molasses, as pesticides are more likely to be concentrated due to the production of molasses [5]. • Rapadura is the Portuguese name for unrefined dried sugarcane juice. Probably the least refined of all sugarcane products, rapadura is made simply by cooking juice that has been pressed from sugarcane until it is very concentrated, and then drying and granulating it or, traditionally, pouring it into a mold to dry in brick form, which is then shaved. Because the only thing that has been removed from the original sugarcane juice is the water, rapadura contains all of the vitamins and minerals that are normally found in sugarcane juice, namely iron. • Sucanat stands for sugar-cane-natural, and is very similar to rapadura. It is made by mechanically extracting sugarcane juice, which is then heated and cooled until tiny brown (thanks to the molasses content) crystals form. It contains less sucrose than table sugar (88 percent and 99 percent, respectively). • Turbinado sugar is often confused with sucanat, but the two are different. After the sugarcane is pressed to extract the juice, the juice is then boiled, cooled, and allowed to crystallize into granules. Next, these granules are refined to a light tan color by washing

them in a centrifuge to remove impurities and surface molasses. Turbinado is lighter in color and contains less molasses than both rapadura and sucanat. • Evaporated cane juice is essentially a finer, lighter-colored version of turbinado sugar. Still less refined than table sugar, it also contains some trace nutrients (that regular sugar does not), including vitamin B2. In Europe, it’s known as “unrefined sugar [6]. Natural sweeteners are flooding the market these days. Here’s a rundown of some of the most common ones that are not made from sugarcane. • Agave nectar is produced from the juice of the core of the agave, a succulent plant native to Mexico. Far from a whole food, agave juice is extracted, filtered, heated and hydrolyzed into agave syrup. Vegans often use agave as a honey substitute, although it’s even sweeter and a little thinner than honey. It contains trace amounts of iron, calcium, potassium and magnesium. Agave nectar syrup is available in the baking aisle at most natural foods stores. The fructose content of agave syrup is much higher than that of high fructose corn syrup, which is of concern since some research has linked high fructose intake to weight gain (especially around the abdominal area), high triglycerides, heart disease and insulin resistance. High fructose corn syrup contains 55% fructose while agave nectar syrup contains 90%. Despite this, it has a low glycemic index because of its low glucose content [7]. • Brown rice syrup is made when cooked rice is cultured with enzymes, which break down the starch in the rice. The resulting liquid is cooked down to a thick syrup, which is about half as sweet as white sugar and has a mild butterscotch flavor. It is composed of about 50% complex carbohydrates, which break down more slowly in the bloodstream than simple carbohydrates, resulting in a less

N.A.NEACŞU et al: Artificial Sweeteners versus Natural Sweeteners 61

dramatic spike in blood glucose levels. It’s worth noting that the name “brown rice syrup” describes the color of the syrup, not the rice it’s made from, which is white. • Honey, made by bees from the nectar of flowers, is a ready-made sweetener that contains traces of nutrients. • Maple syrup comes from the sap of maple trees, which is collected, filtered, and boiled down to an extremely sweet syrup with a distinctive flavor. It contains fewer calories and a higher concentration of minerals (like manganese and zinc) than honey. You can find it in bulk in some natural foods stores, but don’t be fooled by fake maple syrups, which are cheaper and more readily available at the grocery store. "Maple-flavored syrups" are imitations of real maple syrup. To easily tell the difference, read the ingredients list on the nutrition label. True maple syrup contains nothing but “maple syrup.” Imitation syrups are primarily made of high fructose corn syrup, sugar, and/or artificial sweeteners, and contain 3 percent maple syrup (or less). 3. The artificial sweeteners

Artificial sweeteners are synthetic sugar substitutes but may be derived from naturally occurring substances, including herbs or sugar itself. Artificial sweeteners are also known as intense sweeteners because they are many times sweeter than regular sugar.

Artificial sweeteners are attractive alternatives to sugar because they add virtually no calories to your diet. In addition, you need only a fraction compared with the amount of sugar you would normally use for sweetness. Artificial sweeteners are widely used in processed foods, including baked goods, soft drinks, powdered drink mixes, candy, puddings, canned foods, jams and jellies, dairy products, and scores of other foods

and beverages. Artificial sweeteners are also popular for home use. Some can even be used in baking or cooking. Certain recipes may need modification, though, because artificial sweeteners provide no bulk or volume, as does sugar [2].

There are five artificial sweeteners that have been tested and approved by the U.S. Food and Drug Administration (FDA): acesulfame potassium (also called acesulfame K), aspartame, saccharin, sucralose, neotame. These sweeteners are used by food companies to make diet drinks, baked goods, frozen desserts, candy, light yogurt, and chewing gum. You can buy them to use as table top sweeteners. Add them to coffee, tea, or sprinkle them on top of fruit. Some are also available in “granular” versions which can be used in cooking and baking [8].

Types of artificial sweeteners: • Aspartame

The familiar blue packet in the sugar substitutes bowl usually contains aspartame. With no saccharin-like aftertaste, Equal has become one of the most popular sugar substitute brands. There are four calories per packet. • Sucralose

Sucralose is an artificial sweetener. The majority of ingested sucralose is not broken down by the body, so it is noncaloric. In the European Union, it is also known under the E number E955. Sucralose is approximately 600 times as sweet as sucrose (table sugar), twice as sweet as saccharin, and three times as sweet as aspartame. It is stable under heat and over a broad range of pH conditions. Therefore, it can be used in baking or in products that require a longer shelf life. The commercial success of sucralose-based products stems from its favorable comparison to other low-calorie sweeteners in terms of taste, stability, and safety. Common brand names of sucralose-based sweeteners are Splenda, Sukrana, SucraPlus, Candys, Cukren and Nevella [9].


• Saccharin Saccharin is an artificial sweetener. The

basic substance, benzoic sulfilimine, has effectively no food energy and is much sweeter than sucrose, but has a bitter or metallic aftertaste, especially at high concentrations. It is used to sweeten products such as drinks, candies, cookies, medicines, and toothpaste [10]. • Neotame

Neotame is an artificial sweetener made by NutraSweet that is between 7,000 and 13,000 times as sweet as sucrose (table sugar). In the European Union, it is known by the E number E961. It is moderately heat-stable, extremely potent, rapidly metabolized, completely eliminated and does not appear to accumulate in the body. The product is attractive to food manufacturers, as its use greatly lowers the cost of production compared to using sugar or high fructose corn syrup (due to the lower quantities needed to achieve the same sweetening), while also benefiting the consumer by providing fewer "empty" sugar calories and a lower impact on blood sugar [11].

4. Sweeteners effects

Artificial sweeteners are one of the many types of food additives that are applied to improve food color, taste, texture, appearance and durability. They are commonly used to replace natural sugar, so that the negative effects that are associated with sugar intake can be significantly reduced. For a number of years, artificial sweeteners were a popular ingredient for the manufacturing of food, but their popularity started to decline after consumers discovered that they have negative health effects.

There are two types of artificial sweeteners: non-caloric sweeteners and sugar alcohols. Non-caloric sweeteners contain no calories, and they are the main

ingredient in many foods and drinks. These sweeteners don't cause cavities, and therefore, they're widely considered a better option than natural sugar. Sugar alcohols, on the other hand, contain the same amount of calories as natural sugar, and they're commonly used in chewing gums, candies and throat lozenges. Nevertheless, they still cause fewer dental problems than regular sugar

The use of artificial sweeteners has become controversial due to the health effects that are experienced by people who consume them. The fact that artificial sweeteners are made of chemicals does not help allay the fears and suspicions that are associated with them. Some studies have established that artificial sweeteners such as Saccharin, which is a non-caloric sweetener, can lead to cancer.

Research found that Saccharin was responsible for cancer in lab rats. However, the same cannot be confirmed for human consumption of Saccharin, and attempts to ban the sweeteners have been futile. There is recorded evidence showing that Aspartame, a non-caloric artificial sweetener, can lead to seizures, headaches and attention deficit disorders. Some people experience heart palpitations, constipation and swelling of certain body parts after consuming this artificial sweetener.

In some cases, regular intake of artificial sweeteners has resulted in addiction. Some people have developed an addiction for diet cokes and other sweetened drinks due to the addition of sweeteners. Artificially-sweetened drinks and food can lead to change in taste buds, development of cravings and activation of the pleasure centers in the brain that ultimately causes addiction [1]

Artificial sweeteners are not necessarily harmful to everyone. They can also be beneficial to your health, as they can reduce cavities and tooth decay and lower

N.A.NEACŞU et al: Artificial Sweeteners versus Natural Sweeteners 63

body calories. Artificial sweeteners can also be used to neutralize bitterness in certain medicinal products. It's still a good idea to avoid using artificial sweeteners, since the disadvantages clearly outweigh the advantages. Artificial food sweeteners can be detrimental to the health and development of the brain, as well as overall health.

Several alternatives to artificial sweeteners include natural sweeteners such as agave nectar, Stevia, Xylitol and raw honey. Some of these natural sweeteners have medicinal qualities. Stevia, from the Stevia plant, is known to be beneficial for diabetics, as it doesn't spike blood sugar levels. Raw honey is a suitable alternative to sugar because it doesn't cause tooth decay and cavities.

Artificial sweeteners, or sugar substitutes, offer the sweetness of sugar without the calories. Artificial sweeteners are many times sweeter than sugar, so it takes a smaller amount to sweeten foods. This is why foods made with artificial sweeteners may have fewer calories than those made with sugar. Sugar substitutes don't affect your blood sugar level. In fact, most artificial sweeteners are considered "free foods" foods containing less than 20 calories and 5 grams or less of carbohydrates because they don't count as calories or carbohydrates on a diabetes exchange. Remember, however, other ingredients in foods containing artificial sweeteners can still affect your blood sugar level. Also, be cautious with sugar alcohols — including mannitol, sorbitol and xylitol. Sugar alcohols can increase your blood sugar level. And for some people, sugar alcohols may cause diarrhea.

Sugar substitutes are used for a number of reasons, including: • To assist in weight loss – some people choose to limit their food energy intake by replacing high-energy sugar or corn syrup with other sweeteners having little or no

food energy. This allows them to eat the same foods they normally would, while allowing them to lose weight and avoid other problems associated with excessive caloric intake. • Dental care – sugar substitutes are tooth-friendly, as they are not fermented by the microflora of the dental plaque. An example of a sweetener that can benefit dental health is xylitol. Xylitol works to prevent bacteria from adhering to the tooth surface, thus preventing plaque formation and eventually decay. The carbohydrates and sugars consumed usually adheres to the tooth enamel. Bacteria can feed upon this food source allowing them to quickly multiply. As the bacteria feed upon the sugar, they convert it to acid waste that in turn decays the tooth structure. Xylitol cannot be fermented by these bacteria, so the bacteria have difficulty thriving, thus helping to prevent plaque formation. • Diabetes mellitus – people with diabetes have difficulty regulating their blood sugar levels. By limiting their sugar intake with artificial sweeteners, they can enjoy a varied diet while closely controlling their sugar intake. Also, some sugar substitutes do release energy, but are metabolized more slowly, allowing blood sugar levels to remain more stable over time. • Reactive hypoglycemia – individuals with reactive hypoglycemia will produce an excess of insulin after quickly absorbing glucose into the bloodstream. This causes their blood glucose levels to fall below the amount needed for proper body and brain function. As a result, like diabetics, they must avoid intake of high-glycemic foods like white bread, and often choose artificial sweeteners as an alternative. • Avoiding processed foods – individuals may opt to substitute refined white sugar with less-processed sugars, such as fruit juice or maple syrup. • Cost – many sugar substitutes are cheaper than sugar. Alternative sweeteners


are often low in cost because of their long shelf-life and high sweetening intensity. This allows alternative sweeteners to be used in products that will not perish after a short period of time. 5. Conclusions

Finally we found out that the artificial sweeteners are very unhealthy, despite the fact that we consume them every day, and they are present almost in every sweet-flavored food. If we would like to live a healthier life, the best solution is using natural sweeteners. One of the obstacles is the high price of natural sweeteners; because of this people usually choose artificial sweeteners. In conclusion, the assertions that artificial sweeteners are safe, healthy and help in weight loss are false.

There are many natural sweeteners unkown to people, whose benefits of are important and necessary to our bodies. References

1. Mattes, R.D., Popkin, B.M.: Nonnutritive sweetener consumption in humans: effects on appetite and food intake and their putative mechanisms. In: The American Journal of Clinical Nutrition 89 (2009), no. 1, pag. 1–14.

2. Swithers, S.E., Davidson, T.L.: A role for sweet taste: calorie predictive relations in energy regulation by rats. In: Behav Neurosci 2008, 122 (1): 161–73.

3. http://en.wikipedia.org/wiki/Sweeteners. Accessed: 26-01-2014.

4. http://www.modernhealthymom.com/2012/05/natural-sweeteners-explained. Accessed: 26-01-2014

5. http://jdaviswrites.hubpages.com/hub/Types-of-Natural-Sweeteners. Accessed: 27-01-2014

6. http://www.raw-living-food-success.com/natural-sweetener. Accessed: 26-01-2014

7. http://www.fitday.com/fitness-articles/nutrition/healthy-eating/6-health-benefits-of-madhava-agave-nectar.html Accessed: 25-01-2014

8. http://www.mayoclinic.com/health/artificial-sweeteners/MY00073. Accessed: 24-01-2014

9. http://www.moneycrashers.com/artificial-sweeteners-sugar-substitutes. Accessed: 24-01-2014

10. http://www.saccharin.org/history.html Accessed: 25-01-2014

11. http://www.diabetes.org/food-and-fitness/food/what-can-i-eat/artificial-sweeteners/. Accessed: 12-02-2014

MANAGEMENT


LEARNING ORGANIZATION

[REVIEWED ARTICLE]

N. ANTONOAIE 1 C. ANTONOAIE 1

Abstract: “The essence of LOs is effective organizational learning, but relevant academic disciplines, such as economics, anthropology, and social psychology, all entail different assumptions about what this might actually mean. Assorted analytical approaches such as population ecology and sociotechnical systems theory offer distinctly different vocabularies for describing what the LO might be or what it might do.” [Snell, 2007] The learning organization (LO) is an idealized vision of an organization where the structures, routines, and working practices are open to continuous adaptation and improvement, where the individuals and teams engage in continuous learning, where the norms and values are supportive of continuous learning, and where strategic decision making is informed by and responsive to relevant data analysis and feedback. Key words: learning organization, structure, continuous learning.


1. Introduction Information processing and decision

making by firms are typically not done by one person. Rather decisions are made by groups of people either in committees or hierarchical structures. Bounded rationality and computational costs preclude the possibility of any one agent collecting, processing and deciding about information relevant to the firm and its profitability.

Large firms, for example, employ hundreds, even thousands of “managers” who do not produce or sell anything, but

rather process information and make decisions. 2. Contents

“The literature on the LO is a colorful

mosaic of diverse perspectives from academics and practitioners. The essence of LOs is effective organizational learning, but relevant academic disciplines, such as economics, anthropology, and social psychology, all entail different assumptions about what this might actually mean. Assorted analytical approaches such as population ecology and sociotechnical

This article was first published in BUT, Vol. 3 (52) – 2010 Series V: Economic Sciences. Out of an unfortunate error we did not mention (both in the article and in the references) the fact that we used a quote from the paper „Learning Organization, International Encyclopedia of Organization Studies” by Professor dr. Robin Stanley Snell. Consequently we have republished the article with all the appropriate quotations and references and with our deepest sincere apologies for the mistake, apology addressed directly to Professor R.S. Snell.


systems theory offer distinctly different vocabularies for describing what the LO might be or what it might do. The various business functions such as operations management, marketing, information systems, and human resource management, along with the field of strategic management, all emphasize different aspects of the LO.” [Snell, 2007]

“Despite there being so many different perspectives on the LO, practitioners, consultants, and change agents tend to converge upon a common set of ideals and aspirations for the LO. They typically seek to create learning climates that are characterized by experimentation, risk taking, collaborative inquiry, dialogue, and open sharing of feedback, expertise, knowledge, and ideas.” [Snell, 2007]

“They tend to prefer that organizational structures be flat and organic and based on the principles of teamwork, flexibility, empowerment, and an absence of boundaries. They acknowledge the roles of human resource development and Total Quality Management in driving continuous improvement of all the organization's operations. They tend to regard company strategies as adaptable and provisional in the light of environmental scanning and timely market intelligence.” [Snell, 2007]

A multilevel model is offered proposing that organizational learning is an interdependent system where effective leaders enact intervention strategies at the individual (micro), network (meso), and systems (macro) levels. We suggest that leaders approach organizational learning by setting the conditions and structure for learning to occur, while limiting direct interference in the actual creative processes.

First, leaders may increase the level of developmental readiness of individual followers thereby increasing their motivation and ability to approach learning experiences and adapt their mental models.

These individuals then serve as catalysts of learning within and between social networks. Second, leaders may promote the diffusion of knowledge between these knowledge catalysts within and across social networks through influencing both the structure and functioning of knowledge networks. [Hannah & Lester, 2009]

Finally, leaders may target actions at the systems level to improve the diffusion to, and institutionalization of,knowledge to the larger organization.

Organizational learning and adaptation is inherently complex in that it involves the conjunction of networks of varied and often conflicting individuals, groups, functions, policies, and processes. Through these competing demands, ideas emerge and increase in complexity.

The leadership literature has largely viewed organizational learning and adaptation through reduction, suggesting that top-down and particularly linear learning processes can be initiated and controlled by senior leaders [Van de Ven & Poole, 1995].

Conversely, based on recent theories of complexity leadership, we suggest that social systems in complex organizational contexts are inherently unstable and unpredictable, and the causal effects of leadership on organizational outcomes are rarely directly observable or entirely deterministic [Hannah, Eggers, & Jennings, 2008; Marion & Uhl-Bien, 2001]. In sum, a complex context characterized by dynamic and discontinuous forces prevents the management of organizational learning entirely through top-down processes.

The challenge for leaders, then, becomes how to pursue an absorption strategy that builds organizational capacity for learning and adaptability across organizational levels.

N. ANTONOAIE et al.: Learning Organization [reviewed article] 69

Formal leaders are hardly obsolete in our model, but we propose that leaders focus less on what their organizations should learn, but rather on how to set the conditions for collectives to effectively learn and share knowledge. Indeed, formal leaders, due to their central positions in social networks, are in fact more likely than informal leaders to influence social interactions, such as thoseconstituting collective learning [Ibarra, 1993; Sparrowe & Liden, 1997].

Therefore, we distinguish leading from leadership and approach leading as an influence process where individual leaders behave in ways that set the proper conditions for individuals, groups, networks and systems to enact emergent behaviors that promote learning and adaptation.

These individual leader actions then serve to either promote or deter effective leadership and its development, which based on Day (2000), we define as the collective capacity of organizational members to engage effectively in formal and informal leadership roles and processes that promote emergent learning and knowledge diffusion.

As proposed by Vera & Crossan (2004), the leadership process encompasses both formal and informal leaders embedded throughout multiple levels of the organization that interact through varying degrees of shared leadership [Pearce, 2004] to influence organizational learning. “Leaders” and “followers” in this framework are therefore identified by their levels of influence in the network versus their formally appointed positions.

In a dynamic learning network, one can thus oscillate between being a leader or a follower as his or her level of influence changes basedon demonstrated expertise and other factors [Balkundi & Kilduff, 2005]. Informing our approach, researchers have linked leadership to improved

organizational learning. Further, multilevel and social network approaches to leadership have also been offered. Most central to our focus here, Berson et al. (2006) and Vera & Crossan (2004) have made important advances in multilevel models that link leadership and organizational learning.

We differ from organizational learning models that focus on “extraordinary” leaders (i.e. visionary, inspirational, transformational) that are believed to influence learning processes in a more direct manner. We instead focus on the role of leaders as social architects and orchestrators of emergent processes relevant to learning.

These architects operate in a less direct and visible manner, developing individual learners and effective social networks that then serve to promote organizational learning with minimal levels of further leader involvement.

3. Conclusions

In organizations there are often discrepancies between the wider organizational perspective, and the perceptions of teams and individuals lower down the company hierarchy. This needs to be taken into account when developing and deploying learning or knowledge management initiatives within the organization.

Generic concepts from high-level management can traverse team boundaries of the organization, supporting fast strategic change, but need to be customized in order to impact on work practice.

Local knowledge is easier to apply but has limited scope. Neither high level nor local knowledge is superior.

Each has its own strengths and weaknesses. Learning initiatives should recognize this and put mechanisms in place


to support the interfacing of group and organizational perspectives.

In summary, by focusing on establishing the conditions for individual learning and the diffusion of mental models across social networks and systems, we believe that leaders can create a true, veritable learning organization where learning is not something the organization merely does, but is inculcated into the climate and culture and reinforced throughout social networks as a way of being. This requires not only powerful individuals at the top of the organization, but perhaps more importantly, powerful, empowered formal and informal leaders who are capable and willing to intervene across levels for the purpose of learning.

References

1. Balkundi, P., Kilduff, M.: The ties that

lead: a social network approach to leadership. In: The Leadership Quarterly 2005, 16, p. 941−961.

2. Berson, Y., Nemanich, L. A., Waldman, D.A., Galvin, B.M., Keller, R.T.:. Leadership and organizational learning: a multiple levels perspective. In: The Leadership Quarterly 2006, 17, p. 577−594.

3. Day, D.V.: Leadership development: a review in context. In: The Leadership Quarterly 2000, 11, p. 581−614.

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THE AUCTION BEHAVIOR OF FELLING COMPANIES IN THE FOREST SECTOR

CASE STUDY: THE COMPANIES IN THE CENTRAL REGION OF ROMANIA

Victor ANTONOAIE1

Abstract: As part of the quantitative research from the doctoral thesis “Marketing Strategies and Policies in the Forest Sector”, we have analyzed the behaviour of the managers from felling companies regarding wood auctions in the central area of Romania, more specifically in the Braşov, Sibiu, Harghita, Covasna, Mureş and Alba counties. Key words: Chi square Test, crosstabulation, auctions.


1. Introduction In this paper we aim to determine the

existence of certain statistical connections between several of the questions asked regarding the auctions and significant company identification variables, specifically the average number of employees, years of market presence and total revenue for the year 2012. The sample comprises the 78 managers who have answered all the 25 questions of the form, out of the total of 110 managers who received it.

2. Method and main results

The χ2 test was used for determining the existence of the variable links. The theoretical frequencies were calculated for each cell first using the formula:

...

nnn

nt ijij

⋅= (1)

The χ2 test has the formula:

.)(

1 1

22 ∑∑

= =

−=

p

i

q

j ij

ijijcalc nt

ntnχ (2)

The statistical hypotheses were:

H0: there is no link between the variables. H1: there is a link between them.

The 2calcχ value was compared to the χ2

theoretical correspondent, which are

χ2(0,05,12)= 21,02 and χ2(0,05,8)=15,50. If 2

calcχ was higher than the theoretical one, it means that there is a link between the two analyzed variables.

The tests for each two-dimensional distribution were calculated with the aid of the SPSS software.

The first question analyzed focused on the managerial perception regarding the degree of accessibility of official web-sites which they have to access on a daily basis


for their ongoing activity (table 1). 51 of the 78 consider that these are easy

and very easy to use, which makes a percentage of 66.66% of the answers. Most

of these managers come from small businesses, i.e. organizations with less then 49 employees.

Crosstabulation 1 Table 1

21. Average number of employees: under 9 10 - 49 50 - 249 Over

250 Total

1 – very hard to use 1 0 2 0 3 2 – hard to use 0 4 2 0 6 3 – neither -nor 8 6 1 2 17 4 – easy to use 16 13 1 1 31 5 – very easy to use 11 8 0 2 21

2. How easy to use do you think the official websites which you use are?

Total 36 31 6 5 78 By applying the χ2 test (table 2), we can

see that there is a statistical link between the number of employees and the

managerial perception regarding the ease of use for official web sites.


Chi-Square Tests value df Asymp. Sig. (2-sided) Pearson Chi-Square 29.008a 12 0.004 Likelihood Ratio 24.32 12 0.018 Linear-by-Linear Association 3.745 1 0.053 N of Valid Cases 78

a. 14 cells (70.0%) have expected count less than 5. The minimum expected count is .19 Also, by analyzing the results of the χ2

test we can see a connection between the way in which managers perceive official websites and the time period the company has been on the market.

In other words, the longer a company has been on the market, the more at ease it is

with the use of web-sites and the easier the experience is.

There is no connection however between the managerial perception of the official websites and the total company revenue (table 3 and table 4).


22. Your company has been on the market for:

5 - 10 years 10 – 15

years Over 15

years Total

1 – very hard to use 0 0 3 3 2 – hard to use 0 4 2 6 3 – neither - nor 8 2 7 17 4 – easy to use 14 11 6 31 5 – very easy to use 9 4 8 21

2. How easy to use do you think the official websites which you

use are? Total 31 21 26 78

V. ANTONOAIE: The Auction Behavior of Felling Companies in the Forest Sector… 73


Chi-Square Tests Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 17.466a 8 0.026 Likelihood Ratio 20.05 8 0.01

Linear-by-Linear Association 3.162 1 0.075 N of Valid Cases 78

a. 7 cells (46.7%) have expected count less than 5. The minimum expected count is .81.

The second combination of analyzed

variables was the managers’ degree of satisfaction regarding the organization of auctions linked to the same identification variables (table 5).

We can see that 41 managers, 52.56% of

the respondents, are happy and very happy with the way in which auctions are organized. Nevertheless, a significant number, 22 managers, i.e. 28.2%, gave a neutral response, meaning they are neither happy nor unhappy.


21. Average number if employees:

under 9

10 - 49

50 - 249

Over 250

Total

Very unhappy 1 1 2 0 4 Unhappy 5 3 2 1 11 Neither happy, nor unhappy 10 11 1 0 22 Happy 15 15 1 2 33 Very happy 5 1 0 2 8

4. How happy are you with the way in which auctions

are organized?

Total 36 31 6 5 78 The only variable which influenced the

degree of satisfaction was the number of employees, as we can see in the table below (table 6).






The third question analyzed in this paper

refers to the frequency of managers’ participation in auctions (table 7).

Most of them, 32 managers or 41.02% of the total, participate in 3 auctions a year. 23.07% of them (18 respondents) participate in 2.



21. Average number of employees:

under 9 10 - 49 50 - 249 over 250 Total

All auctions in a year 1 3 3 0 7 Once a year 1 7 2 1 11 Twice a year 12 4 0 2 18 Three times a year 14 15 1 2 32 More rarely 8 2 0 0 10

10. In how many auctions do you take

part in a year?

Total 36 31 6 5 78 Only 7 of them, 8.97%, participate in all

the auctions which take place during a year. The number of employees was a

deciding factor for the number of auctions a company participates in during a year according to the following table (tab 8).






The number of auctions in which managers participated in was considerably influenced

by the total revenue in 2012 (tab. 10). We can see (tab. 9) that most companies, 56.41% of them, had a total revenue of under

300.000 euro in 2012. But 25 of these, 32.05% registered losses in 2012.


24. Total revenue 2012:

under 300.000

euro

300.001 - 600.000

euro

600.001 - 1.000.000

euro

Over 1.000.000

euro

Total

All auctions in a year 2 1 1 3 7 Once a year 0 2 4 5 11 Twice a year 14 1 1 2 18 Three times a year 19 2 2 9 32 More rarely 9 0 0 1 10

10. In how many auctions

do you take part in a year?

Total 44 6 8 20 78

V. ANTONOAIE: The Auction Behavior of Felling Companies in the Forest Sector… 75



Pearson Chi-Square 27.947a 12 0.006 Likelihood Ratio 32.65 12 0.001 Linear-by-Linear Association 8.468 1 0.004 N of Valid Cases 78


The auction behaviour of managers in

the felling industry depends on several other variables, such as the source of the information regarding auctions, what types of wood are on sale and what types of wood are interesting to them at that point, the preference for a type of auction, the way in which they communicate with the Forrest Districts, the way in which they use the wood and many others. We will approach these variables in a future research paper. Acknowledgement

This paper is supported by the Sectoral

Operational Programme Human Resources Development (SOP HRD), ID134378 financed from the European Social Fund and by the Romanian Government. References 1. Antonoaie, N.: Management strategic

în sectorul forestier (Strategic management in forestry sector). Constanţa. Editura Muntenia, 2003.

2. Antonoaie, N., Antonoaie, V.: Marketing Management in the Wood Industry. In: The 8th International Conference „WOOD SCIENCE AND ENGINEERING IN THE THIRD MILLENIUM”, ICWSE 2011 November 3-5, 2011, „Transilvania” University, Braşov, Romania, p. 93-100.

3. Antonoaie, N., Antonoaie, V., Antonoaie, C.: Strategic Decisions in

the Wood Industry. In: The 8th International Conference „WOOD SCIENCE AND ENGINEERING IN THE THIRD MILLENIUM”, ICWSE 2011 November 3-5, 2011, „TRANSILVANIA” University, Braşov, Romania, p.603-610.

4. Antonoaie, N., Antonoaie, C., Antonoaie, V.: Timber auction in Romania and the behaviour of the participating organisations – the need for change. In: Bulletin of the Transilvania University of Braşov (2011), Vol. 4 (53), Series V, No. 1, p. 611-614.

5. Bertsekas, D.P., Castanon, D., A.: A Forward/Reverse Auction Algorithm for Asymetric Assignment Problems, Computational Optimization and Applications. In: Computational Optimization and Applications, Vol.1, No. 3, Kluwer Academic Publishers, 1992.

6. Cassady, R.: Auctions and Auctioneering. Berkeley University of California Press, 1997.

7. Constantin, C.: Sisteme informatice de marketing. Analiza şi prelucrarea datelor de marketing. Aplicaţii în SPSS (Marketing information systems. Marketing data analysis and processing. SPSS applications). Braşov. Editura Infomarket, 2006.

8. Costea, C.: Economia şi conducerea întreprinderilor forestiere (Forestry businesses economics and leadership). Bucureşti. Editura Ceres, 1989.


9. Davis, L.S., Johnson, K.N.: Forest Management. Third Edition, McGraw-Hill, Inc., New York, 1987.

10. Drăgoi, M.: Decision Support System for Timber Bidding. In: Lesnitctvi – Forestry 1997, 43(9).

11. Elyakime, B., Laffont, J-J., Loisel, P., Vuong, Q.: Auction and Bargaining: an Econometric Study of Timber Auction with Secret Reservation Price. In: INRA, Economie et Sociologie Rurales, Toulouse, Serie D 95-02D, 1995.

12. Lefter, C.: Cercetarea de marketing. Teorie şi aplicaţii (Marketing research. Theory and applications). Braşov. Editura Infomarket, 2004.

13. Leuschner, W.A.: Introduction to Forest Resource Management. John

Willey & Sons, 1984. 14. Nichiforel, S.R.: Responsabilităţi

sociale şi de mediu în guvernanţa pădurilor din România (Forest social and environmental responsibilities in the Romanian governance). In: PhD Thesis, Universitatea din Suceava, 2011.

15. http://www.appr.org.ro/documente.htm# - Asociaţia Proprietarilor de Păduri din România

16. http://www.licitaţii.ro/ . Accessed: march 2013.

17. http://www.mmediu.ro/domenii/păduri/politici-forestiere/ Accessed: march 2013.

18. http://www.rosilva.ro/bursa/licitatii/. Accessed: march 2013.


A NEW MODEL OF VOCATIONAL

EDUCATION AND TRAINING IN BRAŞOV COUNTY

M. IVAN1 R.G. ALBU2

Abstract: The purpose of the paper is to describe the vocational system and its benefits from both the economic and social perspective, and analyze its implementation in Romania, the German Vocational School Kronstadt being the first vocational school in our country. The results of the research at the Schaeffler Romania company, the top economic agent that provides the practical training for many students involved in this educational system, have emphasized the specific contributions of vocational education and training which are beneficial not only for students but also for the company itself, as well as for the entire society.

Key words: vocational education and training, youth unemployment, social inclusion, dual system in Romania.

1 Firm Foundations Romania. 2 Dept. of Management and Economic Informatics, Transilvania University of Braşov.

1. Introduction

Vocational Education and Training

(VET) has received much appreciation in recent years in academic papers, but also in the political arena, for two major reasons. First of all, it is perceived as a suitable instrument of promoting economic growth. Secondly, it is regarded as a potentially powerful method to encourage social inclusion.

In the European context, it is seen as an important element in the transformation of the European economy and there are numerous examples of presumed effects in different countries. The purpose of VET is to provide individuals with skills that are applicable in the workplace. It is also superior to general education from a socializing point of view, as well as in

promoting access to the labour market. The fact that such a vocational school

was opened in the county of Braşov raised an interest to get an insight into what it actually vocational education and training means and what implications this might have on individuals and the society. 2. Vocational Education and Training

Vocational Education and Training aims

to equip people with knowledge, know-how, skills and/or competences required in particular occupations or, more broadly, on the labour market [5] UNESCO supports vocational education and training and sees it as being a tool to reduce poverty, recover the economy and develop sustainability. At the Shanghai UNESCO Congress the participants concluded that VET should be a top priority to deal with problems such as


global unemployment (especially among the youth) and building a sustainable society (3rd TVET Congress, organized by UNESCO, Shanghai, May 2012). 2.1. Effects of VET

In order to reach EU’s target of becoming a “smart, sustainable and inclusive” economy, characterized by social cohesion, and high level of employment and productivity in the educational field, the European Commission proposed to launch a “Youth employment framework” with the purpose of reducing the rate of unemployment and the early school leaving. One of the aims of this framework is to strengthen the attractiveness of the vocational education and training and to promote the transition of young people into the labor market through apprenticeships. Thus VET is thought to be “an engine for economic growth and a vehicle for social inclusion" [4]. 2.1.1. Decreasing youth unemployment

One of the main topics debated in the

field of vocational education and training is whether it truly represents a remedy for youth unemployment. The whole Europe is confronting with this major problem and is looking for possible ways out. In January 2013, 23% of active young people were jobless, with the rates ranging from 15% or less in Austria, Denmark, Germany and the Netherlands to over 55% in Greece and Spain. The figures are quite high, with over 5.5 million people under the age of 25 unemployed in the European Union [7]. As for Romania, the annual average youth unemployment rate is almost four times the

rate of unemployment among adults, with 23% young people unemployed with ages between 15 and 24 [9]. Youth unemployment is a major problem from an economic and social point of view and vocational training and education gives the possibility to young people to get access to the labor market, since it increases skills and competencies which make young people more competitive.

In many countries, modern apprenticeships are seen as a superior form of VET as far as future employment is concerned. This form of VET is dominant only in few European countries, particularly Germany, Austria and Denmark. In these countries, the so called “dual education system” plays an important role.

In Fig. 1.1 it has been calculated the unemployment rate among youth (under 25 years of age) as an annual average in the European Union (EU-27), Germany, Austria and Romania. As the figure shows, youth unemployment has faced a better evolution in the countries where the dual system is implemented, the percentage being way below the European and Romanian average.

Also, according to Professor Eric A. Hanushek, from Hoover Institution at Stanford University, who studied the relationship between the proportion of students who are in some sort of vocational training and the youth unemployment rate for a selection of countries in the OECD, there is indeed a relationship between youth unemployment and vocational training. His studies showed that a 10% greater participation in vocational education leads to a 2% lower youth unemployment rate [1].

M. IVAN et al.: A New Model of Vocational Education and Training in Braşov County 79

2.1.2. Social inclusion Social exclusion refers to “the complex

processes that deny certain groups access to rights, opportunities, and resources that are key to social integration” (Institute of Social Inclusion at Adler School of Professional Psychology) [8]. This exclusion is many times connected to a person’s social background, living standards, educational status, and race or it might refer to certain groups, for example ethnic minorities, low-skilled workers and immigrants . The result of social exclusion is that it prevents individuals from taking part in the social, economic or political life as others do.

Among the key solutions that the European Commission (2010) came up with are improving access to work and education, making an effort to prevent dropping out of school and better use of EU funds to support social inclusion and combat discrimination. Therefore, vocational education and training comes as an important element which acts in opposition to social exclusion [11].

Examples from other countries prove that vocational education and training can help restraining the massive drop-out of

general compulsory school or lack of motivation in continuing the studies to a higher level can be controlled. Apparently around 60% of school-leavers in Germany choose to enter the Dual Education System every year [11]. 3. The German Vocational School

"Kronstadt" Schaeffler Romania has made one first

important step in this direction by being the top partner for practical training of the German Vocational School "Kronstadt", the first school in our country that adopted the dual education system from Germany.

This is the first vocational school in Romania that adopted the German dual education system. In February 2012 the Ministry of Education and Research approved the functioning of the 2 – year vocational education. In the same month, Braşov City Hall together with the Braşov School Inspectorate, the Economic Agents DWK Fit for Future and the Technical College “Mircea Cristea” signed the collaboration protocol to start the German Vocational School. The company Schaeffler Romania is the main partner in providing the practical trainings and was

Fig. 1. Youth Unemployment Rate in EU-27, Germany, Austria and Romania during 2002 – 2012


the one who came up with the idea of a vocational school in the county of Braşov.

The main reasons for getting involved in the vocational system were the low level of qualification of those students who graduated from a technical institution, the inappropriate endowment of technical schools and also the faulty curriculum which could not be adapted to the latest technologies. The need for properly qualified work force in production was becoming greater and, at the same time, more difficult to find. Changes were clearly a necessity for the companies activating in the industrial sector. Thus, the German Vocational School Kronstadt came as a strategy to ensure the human resources needed in production and was part of the strategic corporate social responsibility activities that Schaeffler Romania engaged in.

The target group consists of graduates of the 9th grade, with ages between 16 and 18 years old. The duration of the vocational school is 2 years, compared to 3 years in Germany, due to the Romanian Legislation. The years of study are structured in the following way: 40% theory and 60% practical training in the first year, while in the second year the emphasis is even more on the practical trainings with 75% of the curriculum (25% theory).

The decision to support the continuous development of this type of educational system is a proof that private companies understand its importance.

The students can choose where they want to carry out their practical training. The 13 economic agents who provide the practical trainings are well-known companies from the industrial sector in the county of Braşov: Schaeffler Romania, Continental, Aerotec, Caditec, Draxlmaier, Ramoss, Preh, Rege, HIB, Stabilus, Hutchinson, Kronospan and Elmas.

The financial support for each student consists in 200 lei/month from the economic agent and 200 lei/month from the state, plus other facilities such as free transportation to and from the workplace, and a free meal every day. At the end of his studies, the student, after being examined, will receive an International Diploma of Qualification, level II. There is no obligation stipulated in the contract as far as employment is concerned, so after the 2–year training students are free to choose whether they want to remain as employees in the company, choose to work within another company or continue their studies in pursuing a high school diploma. 4. Current and future benefits of

vocational education and training in Braşov county

This paper examines the effects of

implementing the German dual system in Romania, namely in the county of Braşov. Benefits of this system can arise at different points in time and can take various forms, but many of them are not easily quantifiable, especially at this stage of its development. We have to take into consideration the fact that the German Vocational School Kronstadt opened only in September 2012. The main focus was on the practical trainings that take place within the company Schaeffler Romania, as a top partner of the German Vocational School Kronstadt. Therefore, the purpose of the paper was to assess subjective current and future benefits of vocational education and training and to identify possible areas for improvement. In order to do this it was resorted to a qualitative research.

The model used for the research was “Depth Interviewing” because “with no social pressure to conform to group responses, respondents can be questioned in-depth in a context that allows them to


really express how they feel [3]”. The interviews were taken in two phases: one with the instructors and the second one with the students. The reason for this was to better assess the opinions regarding vocational education and training from both perspectives, of the economic agent (in this case Schaeffler Romania) and of the individual (student).

The main objectives of this exploratory research were to: identify the reasons and motivations of the students for choosing the dual education system over general education, and for their option for Schaeffler as the provider of practical training; identify the benefits of this vocational education system for the students, the economic agent and the society, and determine problems and challenges that both students and instructors are confronted with during the practical trainings.

After interviewing the instructors and the students, the conclusion was that there is still room for improvement, the dual system adopted in the county of Braşov through the German Vocational School Kronstadt is indeed an important step towards economic growth and social inclusion due to the multitude of benefits it brings in the society and in each individual’s life. The research at the company Schaeffler gave an insight into what it means to start a battle against old mentalities and a faulty educational system.

The influence of this dual system goes in three directions: the individual (student), the economic agent and the society.

For the students the benefits are significant. The employment chances are considerably higher after graduating from the vocational school due to the baggage of skills and knowledge that they receive during their studies makes them better qualified and competitive on the labor market.

The economic agent, Schaeffler Company in this case, will select those students who performed better during their training and will offer them a job within the company. The expectation for the 2013 series is that 40% out of 79 students will become Schaeffler employees at the end of their studies, and the rate is anticipated to rise to 65% in the next generations (according to the coordinator of instructors). We do have to take into consideration that the number of students who will be accepted at the German Vocational School Kronstadt is expected to double in the years to come, compared to 2012.

Moreover, as many of the students said during the interview, they would like to become employees at Schaeffler because they have already got used to the environment and people. Also, the practical trainings helped them to accommodate to a strict schedule and receive an insight to what it means real work. This only makes the transition from school to work smoother and easier. Many of them admitted during the interview that they prefer to do the practical work rather than studying only theory, thus the reason for choosing a vocational school. Nowadays this is another important factor to be taken into consideration because vocational schooling counteracts early dropping out of school among young people who claim to be tired of school (especially those who are categorized as “low-achievers”).

In Romania this has become an important issue that needs much attention because it involves not only the students, but also teachers, parents and the community. After studying this matter in detail, UNICEF presented a result that is quite worrying, only “19.2% of people aged 18 – 24 had successfully completed only eight grades. This means that roughly one out of five young people has no


qualification at all” in Romania in 2007 [10]. UNICEF reached the conclusion that the main cause of dropping out of school is poverty.

One of the methods proposed by UNICEF to combat school abandonment was to focus more on the achievement of competencies rather than just transferring information to children. We consider that vocational education and training represents that platform on which students can receive more than just information and therefore, it can play a key role in the fight against poor motivation and early dropping out of school.

The other major implication is the concept of social inclusion. It is no secret that in many countries, Romania as well, students enrolling in VET tend to be the lowest attainers at the end of compulsory education [2]. Many young people from the lower social class can benefit from specific education. Their acquiring of skills and competencies leads not only to employment but also to avoid social fragmentation. This is the case with the practical trainings at Schaeffler also. Out of 79 students who chose to do their practical training, 7 of them have some special cases. Three students are abandoned while four of them can be considered semi-abandoned since their parents are alive but cannot offer them financial support. Furthermore, only 40% of students are from the city of Braşov, the rest of 60% are from the areas surrounding Braşov, or even other regions like Iaşi, Maramureş, Covasna, Buzău or Vaslui. All of them benefit from these trainings by being provided also with transportation, food, shelter and money. Again, it is worth while to remember that the number of students who will apply in the next years at the German Vocational School Kronstadt (and implicitly at the practical trainings in Schaeffler) is expected to increase.

The company has also many advantages from these practical trainings which have a positive effect in the sense that qualified and well trained employees will lead to the increasing of labor productivity. Plus there is also the advantage of saving costs from recruiting external workforce, no need of training new workers in production, and less time spent on integration with each worker who has been previously trained within Schaeffler.

The continuous enhancement of the image of the company is not to be neglected. As students confirmed, ”they heard others speaking well of the company” thus their choice to do the practical training inside Schaeffler. The corporate image is bound to improve as more and more publicity is made through the German Vocational School Schaeffler. One conclusive example would be the participation at the high schools fair from April 2012, organized by Schaeffler company, where it really raised the standards compared to other technical high schools participation.

The German Vocational School offers a great opportunity to students from all social and educational backgrounds. It is the only one in the educational system in Romania that provides young people the chance to learn a trade, to apply the theoretical knowledge in a practical way, at the same time with the financial support of 400 RON/month which makes this experience as real as in a full-time workplace.

The students, being in their teens, are tempted to push the limits as much as possible and even break the rules (as in the case of smoking or unjustified absenteism). It is the stage in their life when they are trying to discover their identity, to experience everything and to challenge the authority, breaking the rules giving them a sense of strength. To all of this we can add the faulty educational system from all


these years in terms of consistency and application of rules and sanctions. This has only approved the behavior of students who did not comply with regulations. This is why, as the coordinator of instructors had mentioned during our interview, a climate with clearly established rules, that are implemented by all instructors with consistency and that attracts sanctions, it’s mandatory and it is beneficial to the teenagers’ development.

Of course, changes will appear in time, that is why there is much need for patience and perseverance. We are talking about changing a faulty mentality and for this there is much time needed, even years. But with much determination and with the belief that when setting high standards for all students, they will rise to the expectation, in time we will see the results. The schooling system is a major venue for transmitting values, norms and codes of behavior to young people and the effects are of socioeconomic importance that affect the whole society. Education is the path towards a sustainable growth, and vocational education and training is a valuable instrument to shape the future of society. 5. Conclusions

Nowadays, there is a growing emphasis on the concept of vocational education and training (VET) and, as presented in this paper, the European Commission proposed this educational system as a tool for social, economic and human capital development. In today’s European context, sustainable development is extremely important for preserving our society and for creating a better future for the generations to come. A fruitful development, from a social and economic point of view, requires qualified human capital and professional qualifications that cannot be achieved in the general secondary education or university. When it comes to emerging

industries and modern trades such as CNC operator, electro mechanic, or older trades like welder, or tool and die maker, the vocational education system is the way to achieve these skills. We must take into consideration, and actually draw the attention upon the fact that an industrial company cannot function only with university graduates but it also needs people in production.

The outcomes of VET are promising: qualified and skilled labour force which will improve the productivity of the company, thus making it more competitive, consolidated and able to develop from an economic point of view. The reduction of poverty is expected to happen through the increase of social inclusion along with the decrease of youth unemployment, and there is anticipation regarding the decreasing of school drop – outs.

Even more, the German Vocational School Kronstadt became an example for the authorities of other counties in Romania. The President of the German Economic Club, local counselor Werner Braun, mentioned that the local authorities from Piteşti, Sibiu, Alba, and Timişoara have been very interested to follow the model.

The renewed interest in VET, reflected in the amount of papers published in recent years, is a promising progress. There are still large areas where our knowledge is limited, including when these practical trainings will have an actual effect on productivity and circumstances under which institutional change is likely to take place, but the overall idea is that vocational education appears to have many advantages.

Europe has long approved the use of vocational education to prepare young people for entry into workforce and Romania has made a step forward in the right direction through the implementation of this system.


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3. Malhotra, N., Birks, D.: Marketing Research – An applied approach, 2nd European Edition. UK. Pearson Education Limited, 2006, p. 178.

4. Nillson, A.: Vocational Education and Training – an engine for economic growth and a vehicle for social inclusion. In: International Journal of Training and Development 2010 Vol. 14 (4), p. 251–272.

5. *** CEDEFOP: Terminology of European education and training policy – a selection of 100 key terms. Luxembourg, Office for Official Publications of the European Communities, 2008

(Available at: http://www.cedefop.europa.eu/EN/File

s/4064_en.pdf) 6. *** European Commission: Europe

2020: A strategy for smart, sustainable and inclusive growth. Brussels, 2010 (Available at http://ec.europa.eu/commission_2010-2014/president/news/documents/pdf/20100303_1_en.pdf).

7. *** European Parliament – Committee on Employment and Social Affairs: European Draft Report – Tackling Youth Unemployment: Possible Ways Out, 2013. (available at http://www.europarl.europa.eu )

8. http://www.adler.edu/page/institutes/institute-on-social-exclusion/about. Accessed: 26.05.2013.

9. http://www.business24.ro/macroeconomie/somaj/somajul-in-randul-tinerilor-din-romania-a-ajuns-la-23-7-la-suta-1515402. Accessed: 03.06.2013.

10. http://www.unicef.org/romania/media_15620.html. Accessed: 10.03.2013

11. http://www.worldskillsleipzig2013.com/en/education/germany_dual_system/ Accessed: 26.05.2013.


RESEARCH ON INVESTMENT

ESTIMATION WHEN DECIDING TO START A NEW BUSINESS

Lucian GUGA1

Abstract: An entrepreneur has to follow several steps when deciding to start a new business. Starting a business involves planning, making key financial decisions, completing a series of legal activities, hiring reliable employees and after all of this the success of the new firm is determined by a few steps, which every manager must take into account. One of these steps is adopting a company name, the calling card of the business, taking into consideration the related tips regarding its selection. Entrepreneur must estimate the initial investment and the necessary financial resources. When talking about a company its mission must be clear and easy to understand. Thus, the description of the main activity and the general environment must be present in the business plan as well.

Key words: starting a business, manager, resource allocation, investment estimation.


1. Introduction The appearance of the workplace can

define the work atmosphere, and it can also be a key factor in determining the clientele. The most important position in a business is that of a manager. In this case the head of the company must be aware of the requirements of the position, the different types of managerial styles, and in the end he must adopt a suitable one for his company. Of course, the financial and human resources must be taken into account when starting a business. In the following paper these steps are explained and put into application through the birth and evolution of a limited liability company.

The main objective of this paper is to

introduce the statistical method for determining the investment.

2. General description of a company

In the current economic environment, industrial and administrative, managerial foresight is an attribute which, if well executed, leads to securing the future of an enterprise from the point of view of its human and material resources. Managers, who properly exert their forecasting capabilities, lead the company to success. For the businesses that have a large volume of information processing, the rational planning of activities, flexible and tailored to the competitive market is indispensable. Auto Service networks are characterized by current works and


temporary works. Current works are characterized by specialized repair shops general maintenance and repair of only certain components (engine, brakes, steering, body, electrical parts, etc.), and they only consider a certain type of car. AUTO SERVICE Network is a new concept that addresses more complex issues to eliminate the disadvantages of the existing service. The idea is to make complex high quality repairs, with as few staff as possible, at the lowest cost and addressed to a greater number of customers.

3. Description of the Main Activities

Each car service unit has 5-6 employees

performing automotive repair (Fig. 1). They must receive customer orders. Usually the employee discusses with clients to whom the vehiclebelongs, the symptoms and the temporal evolution prior to the occurrence of the fault. This information is collected from people mostly lay in auto mechanics. The auto mechanic may not be a specialist in the reported defective auto component system.

The correct diagnosis of the health status of a vehicle is crucial to shorten the response and stationary service costs. Based on the diagnosis the list of necessary supplies is compiled.

The idea is that each service network must cover an area which may provide potential customers and perform repairs according to the competence of the employees to the network.

Suppose that the network of service stations has 150 engineers in 15 areas of intervention centers (electricians, drivers, managers, roofers, mechanics, engine, steering, braking system, transmission, injection, turbochargers, etc.), with various levels of qualification and specialization. For example:

Auto Electrician:

1. Screw in and unscrews bulbs, electrical parts, signage, etc.

2. Dismounts and mounts the alternator charger, the starter, electrical connections.

3. Repairs electrical components such as manifolds, coils, bridge rectifiers, alarm systems, central locking etc.

Fig. 1. General scheme of a SERVICE

4. Repair electronic components such as electronic ignition, signalling relays, car alarms, electric current recovery system, etc.

5. Repairs electronic and computer components (the autopilot robot, the state machine diagnostics, the onboard computer, etc.).

At one time an employee can be in one of the following situations:

- Perform an auto response. - Available (pending auto interventions). - Sick leave or rest. - Activity commissioned by the chief

administrative service. Through the contract of employment the

employee has specified the basic elements of service such as duration of employment, profession, qualifications, skills, work schedule, etc. All this determines the salary and hourly labour implicitly provided.

Personnel in auto service network are assigned to each service, according to its specificity.

L. GUGA: Research on Investment Estimation when Deciding to Start a new Business 87

4. The investment

In general, investment represents any capital expenses which are made for the purpose of obtaining future profit. Particularly the following concepts are used: • Capital investment • Financial investment

Capital investment refers to funds invested in fixed assets, tangible or intangible or both.

Financial investment is represented by any funds allocated for capital stock or other businesses, bounds, public and private, real estate held for rental income and also for the prospect of capital gains.

The investments vary in accordance with liquidity. Some can be turned into cash in a reasonable time, but others are difficult to convert even though they are profitable sources of revenue. For example, the capital investments lack in fluidity and flexibility and they are more rigid because they are expected to be held until their services to the business have expired.

There are two main kinds of investment resources: • Internal resources:

- the primary investors capital - profit - capital depreciation - funds from bounds and stocks

• external resources: - loans - funds from the budgets of local

public administration authorities - grants - subventions -

5. Classical investment estimation

The classical evaluation of an investment is analytical.

The detailed structure of investment and the necessary equipment are presented in Table 1.

Table 1 Clasical investment calculation

Surface service area 170 m2 Decoration 90,000 lei

Electronics and other appliances

50,000 lei

Buildings and land 800,000 lei tools

devices equipment

250.000 lei

TOTAL INVESTMENTS

1,190,000 lei

6. New method of investment estimation

The new method is based on the similarity to the real estate investment evaluation. The evaluation of real estate investments in order to sell them is based on the price per square meter. In our country this assessment of the investment is expressed in euro per square meter.

The average value per square meter of construction is 750 euro.

Applying this method of assessment in the case of a company with the object of activity in services has revealed that the method must be adapted to enterprises. In the case of the real estate the investments shall include land, buildings and a minimum of utilities (water, sewer, gas, kitchen, bathroom, central heating and parking).

In the case of companies the investment includes besides these utilities tools, devices, machines, measurement and control, materials and everything that is encompassed in the fixed and variable cost structure of a company.

Analyzing a total of over 50 companies we found that the nearest value can be estimated per cubic meter of enterprise.

To calculate the volume of building an enterprise must take into account that it has two types of buildings.

- Administrative Buildings (offices, attachments, storage, lockers, toilets, etc.)


for which the height of 2.5 meters needs to be taken into account. The value of 250 euro per cubic meter of administration building was determined statistically

- Production Buildings (mechanical workshops, electrical workshops, bodywork, electronics, etc.) for which the height of 3.5 meters needs to be taken into account. The value of 450 euro per cubic meter administration building was determined statistically

Applying this statistical method in the case of an auto service, it was found that it consists of 34 square meters of Administrative Buildings and 136 square meters of Production Buildings from a total of 170 surface service area.

We can thus estimate the investment:

34*2,5*250+136*3,5*450=235,450 euro 235,450euro*4,5lei/euro= 1,059,525lei

The method gives satisfactory results in

case an entrepreneur decides to start a business.

7. Conclusion

This method of determining the

investment of a company resulted from the statistical analysis of existing similar companies. The statistical method is based on the observation of over 50 companies. We must calculate the total investment by

dividing the enterprise space in workspaces and administrative buildings.

We address acknowledgements to the students in Business Administration of Transilvania University, who played an important role in obtaining the results submitted within the paper. References 1. Chipps, G.: The woman’s guide to

starting a business. New York. Ed. Henry Holt and Company, 1992.

2. Guga, L.: Economia Întreprinderii, (Economics of the Firm). Braşov. Editura Universităţii “Transilvania” din Braşov, 2010.

3. Guga, L.: Economics of the Firm. Braşov. Universitatea "Transilvania" din Brasov, 2013.

4. Guga, L.: General Management, Braşov. Editura Universităţii “Transilvania” din Braşov, 2006.

5. Guga, L.: Managementul IMM-urilor (Small business management). Braşov. Editura Universităţii “Transilvania” din Braşov, 2009.

6. Guga, L.: Sisteme Expert în Managementul Întreprinderilor (Expert systems applied to firm management). Braşov. Universitatea "Transilvania" din Brasov, 2012.

7. http://entropymanor.com, (accesed:22.11.2013)

8. http://www.entrpreneur.com, (accesed:16.11.2013)

.

Bulletin of the Transilvania University of Braşov Series V: Economic Sciences • Vol. 7 (56) •No. 1 - 2014

QUALIFICATION OF STAFF AS A QUALITY

STRATEGY FOR S.C. SCHAEFFLER ROMANIA

A. MADAR1 N. A. NEACŞU1

Abstract: Particular attention is given in the present paper to the strategy of continuous improvement. This is considered an integrating strategy, an across-functional strategy of the enterprise and it envisages the gradual, continuous improvement of products and services quality, as well as productivity and competitiveness, with the participation of all staff. This strategy has been defined in Japan under the name Kaizen. The Kaizen strategy is oriented towards the employee, who is considered the main factor of enterprise success. Key words: quality strategy, Kaizen strategy, trained employees, German Vocational School Kronstadt.


1. Introduction Schaeffler Romania was ranked 63 in

the Top 100 most valuable companies in 2011 having a value of 206 million Euros. In Top businessmen Romania, the company is ranked first. Therefore, it is one of the leading employers and investors in Braşov County. Some of the company's goals are to be the leader in quality, technology, reliability and economy, and the creation of effective methods of delivery and service.

Schaeffler Romania invests large sums in technology and production processes in order to improve the products and services they offer. Therefore, we believe that the company is an interesting case study regarding the quality field. The company is a major local investor, allocating budgets incomparable with those of other operators in the industry regarding the quality field,

having a major impact on the local community.

2. Quality management

Quality management can be defined as a management system whose objectives are to ensure the highest level of trust related to the fact that the quality requirements in a given system will be maintained at all times and at the lowest cost possible.

There are eight principles underlying the quality management system: - orientation of the company towards the customer; - leadership; - staff involvement; - processes approach; - systematic approach to management; - continuous improvement; - decisions based on facts approach;


The most important concept of the eight principles is based on the concept of total integration. Consciously applied throughout the organization these principles will generate optimum performances, superior to the performances results from a series of individual optimized activities and will lead the organization towards management excellence [3].

Competitiveness of contemporary organizations, regardless of size and nature, originates in the quality strategies they adopt and apply. Companies that excel in the quality of services are able to avoid differences that may arise in their management performance or to minimize them as much as possible [1]. Particular attention is given at present to the strategy of continuous improvement. It is considered an integrating strategy, across-functional strategy of the enterprise and it envisages gradual, continuous improvement of products and services quality, as well as productivity and competitiveness, with the participation of all staff. This strategy has been defined in Japan under the name Kaizen, representing the starting point of competitive strategies which will function at the level of the world economy [2]. Kaizen strategy is oriented towards the employee, who is considered the main factor of enterprise success.

The most significant aspect is the fact that the first and main concern before product quality is the quality of employees. They should be helped to acquire the Kaizen "conscience", to understand the necessity of continuous improvement, so that it becomes a state of mind of each employee.

The main difficulties in implementing the Kaizen strategy could be brought about by: - managers’ reluctance towards open recognition of problems. This recognition

represents the starting point of all the steps for improvement; - often the cross-functional nature of the problems to be solved; - resistance shown by workers to change, considering that they might be harmed; - poor communication between managers and workers [3]. 3. Company overview

Schaeffler Romania has operated as a subsidiary of the Schaeffler Group since October 2002 [5]. The activity of the company, according to CNE (classification of the national economy) 281, is the manufacture of general purpose machinery and the core activity (CNE 2815) is represented by the manufacture of bearings, gear boxes and gear mechanical transmission elements.

The number of employees has increased significantly, from 2,843 people in 2009 to 3,756 people in 2011.

Schaeffler Group operates through its three strong brands INA, LuK and FAG, and is based primarily on great innovative force, on the global approach to the client, and the highest quality of all processes and products. Headquartered in Herzogenaurach, Germany, the Schaeffler Group designs and makes about 160,000 products across 60 branches, the most prominent being the automotive industry, industrial machine building industry (special branches being the wind industry and railway applications) and aerospace industry.

There are two types of customers within the Schaeffler Group: Direct customers - goods go directly to end customers, most are OEM (Original Equipment Manufacturers = first fitting equipment: chassis, engine, transmission). Indirect customers – goods are bought by distributors and then by end customers (Aftermarket Division - spare parts).

A.MADAR et al.: Qualification of Staff as a Quality Strategy for S.C. Schaeffler Romania 91

Automotive products produced in Cristian, Braşov, go entirely to Western plants of the Schaeffler Group, where they are assembled and then delivered to beneficiaries.

The automotive industry is the main customer of the Schaeffler Group with a share of 60% of turnover. The group of customers in the automotive industry includes prestigious companies such as Mercedes Benz, Audi, Volkswagen, BMW, Toyota, Porsche and Daimler Chrysler, and for Maybach models the company produces under the "special orders". In Romania, customers in this field are: Ford, Renault, Dacia and Continental (being OEM customers) and Autonet, Trost, Elit and Autototal (Aftermarket Division customers). The Schaeffler Group received the award for the best Porsche supplier in 2011, and in 2012 they received it from Toyota, General Motors, Nissan and Ford.

In the aerospace field, Schaeffler is the main supplier for Airbus A 380 and Boeing 787 Dreamliner; other customers are: General Electric, NASA, Snecma, Pratt & Whitney.

Customers in the industrial sector are separated in areas such as: steel - Alro, Mechel, Arcelor Mittal, Stainless Steel, Tenaris; cement - Holcim, Lafarge, Heidelberg Cement; railways - CFR, Alstom, GFR (Romanian Railway Group), Astra; thermal power stations - CET Rovinari, CET Craiova, CET Işalniţa, NCLO (National Company of Lignite Oltenia); machine tools - WMW, Titan, Emsil; electric motors (consumer products) - Electroprecizia, Bega, UMEB; refineries (oil and gas) - OMV - Petrom, Rompetrol; area food: Coca-Cola, European Drinks, BAT, Phillip Morris etc. To all these customers Schaeffler Romania delivers goods straight from the company, except for machine tools and electric motors.

Competitors are companies’ that Schaeffler Romania competes with and satisfy the same customer needs, being perceived by customers as an alternative, namely manufacturers of bearings and automotive components for the auto industry. Among them one can be mention the world leading manufacturers of bearings already present on the Romanian market such as the Japanese company Koyo, the U.S. company Timken or the French company SNR, which invested in production facilities.

The leader in this market is the SKF Group, followed by the Schaeffler Group (second place) and Mondial Timken (third place). Other competitors are: NTN, NSK, Koyo Seiko, etc. and on the Romanian market there are: Alstom General Turbo, Koyo Romania, Timken Romania, Rulmenţti Bârlad, UCM Reşita etc. However, Schaeffler is the leader in selling bearings for wind mills.

The Schaeffler Romania Company is working with 450 local suppliers providing the raw material that Schaeffler needs, and the services that help to create a favorable climate for successful production. Of these, 234 firms are in Bucharest and 188 are in Braşov County. Schaeffler Romania suppliers are well known companies working successfully on the Western European market (examples: DEV, Ire Omba, Gerda Sibenol, Ascometal) and Eastern Europe companies, especially the local market (examples: OMK Russia - provides bar; Forja Neptun, ASAM Iasi - forgings; Becotek Braşov, Metalsid Braşov - brass; Matec CNC, Comis Vălenii de Munte - cutting processing). To these one should add domestic suppliers within the Schaeffler Group which offer parts (cage, rollers) received for the production of components and elements in the village of Cristian.


4. Quality Strategies–Vocational School Kronstadt

In the medium and long term, the school

will provide the company employees trained in their field, who know German and will be familiar with the style of work and machinery used by the company.

The German Vocational School Kronstadt (GVSK) is the first and only school with legal personality in Romania.

Its main field of activity (according to CNE code 853) is secondary education, and the main activity is secondary, technical and vocational education.

The original partners of this school are: the German Economic Club, Braşov County School Inspectorate; Braşov City Hall, Schaeffler Romania and 11 other leading companies in the Braşov area.

The German Vocational School Kronstadt has a specific vocational and technical curriculum, and teachers come from both the Technical College "Mircea Cristea" and the company. Internships taking place in the company are chosen by students when completing the application for registration at GVSK. Students are trained by some practice tutors, i.e. people who belong to the company chosen for work practice. The target group consists of graduates from the 9th grade aged between 15 and 16 years, the age limit being 18 years.

GVSK offers the following advantages to attract people: monthly scholarship during schooling for all students, worth 400 lei: 200 lei from the state and another 200 lei from firms; priority employment after graduation in the company chosen by the student; transportation and meals provided during practice; nationally and internationally recognized degree; possibility to continue studies to obtain the baccalaureate; support students with outstanding results in further studies with an emphasis on practical training [6].

The school began as a pilot project, and was inaugurated on 17 September 2012. The language of instruction is Romanian. The school will operate on the German model, compiled with the Romanian model, so the school period is 2 years: the first year - 40% theory and 60% practice, and in the second - 25% theory and 75% practice.

In the 2012-2013 school year, there were 130 students enrolled, of which 79 guided by Schaeffler Romania, 13% of them being girls. Of the 79 students, 40% come from Braşov and 60% of other places around Braşov or from the other counties such as Iaşi, Maramureş, Covasna, Buzău or Vaslui. The 130 students who are currently in the 11th grade, were joined by other 133 10th grade students, of which 70 were accepted by the company Schaeffler to prepare the practical work. Of these, 45% come from places around Braşov and 38% come from counties like Vaslui, Covasna or Prahova [4].

The selection procedure to become student in this school takes the form of a files selection. If the number exceeds the number of students enrolled permitted by the Ministry of Education for this school, the economic agents involved will intervene by supporting interviews with those who want to join, and also testing them. Also, when a student chooses to practice at one of the companies involved, these are able to carry out their own selection process. Following completion of the two years of study in the German Professional School Kronstadt, students have the opportunity to specialize in: - Operator CNC machine tools; - Electromechanical machine tools and industrial facilities and CNC tools; - Mould toolmaker; - Sewer of pieces of leather and substitutes.

The purpose of the program is that the students acquire a professional qualification certificate which is


recognized both in Romania and in the European Union. Also, after completing the program they receive a certificate of completion of compulsory education that allows them to continue their education to high school (11th grade).

A quantitative marketing research study was also performed called "The usefulness of the Schaeffler Romania investment in the German Vocational School Kronstadt". This research used a survey based investigation, and the basic tool by means of which these data were obtained was the questionnaire. The research was conducted in January last year, and the population studied comprised of GVSK students, who chose Schaeffler Romania Company for their practical placements (79 people). Students had to choose between being operators for electromechanical machinery and equipment or for tools with numerical control machines, the distribution within the company Schaeffler Romania being 17 and 62 students, respectively. When asked "How do you find Schaeffler Romania regarding quality, seriousness, modern technology, professionalism, ecology, qualified employees, effective management, motivation of employees”, the best score was obtained for quality (4.87). This was followed by seriousness (4.86), modern technology (4.81), professionalism (4.77), ecology (4.63), skilled workers (4.51), effective management (4.48), and the lowest score was registered by the motivate of employees, with an average score of 4.46. Generally, students feel good about Schaeffler Romania. The question was performed with semantic scale,encoded from 1 to 5, 5 - meaning "very good" and 1 -"very low". When asked to express their opinionon the following statement: "After graduating from GPSK we have more employment opportunities than students who graduated from another technical schools", most students agreed with this

statement the total score average being 4.6 (5 – means strongly agreeand, 1-strongly disagree). The students agreed with the statement "After graduating from GVSK, given both the theoretical and practical knowledge gained, I consider this knowledge useful to start my job in their chosen field", thereby obtaining the average scoreof 4.37. In both statements, none of the students questioned said they did not agree with them.

According to the research from the perspective of these 70 students, the most attractive benefits of the enrolment in the German Vocational School Kronstadt are: nationally and internationally recognized diploma, priority in employment after graduation and focus on practical experience. Aspects considered less important were: mounthly scholarship of 400 lei, helping students with outstanding results; the lowest score was registered by transportation and meals provided during practice. The research showed that the German Vocational Kronstadt School is more effective and more efficient than an ordinary school because it has extensive work practice, so theoretical knowledge is implemented, it is equipped with advanced technology and has qualified teachers. But students are disappointed by the teaching method used by teachers, for the theoretical part. Students also prefer specialized disciplines, to the detriment of general knowledge disciplines that are taught to give students the opportunity to continue their studies. Asked why they chose disciplines from one specialization or the other, students mainly stated that they believe these will help them in the future, but also that they are easier to learn, or they have more knowledge in that field. Research showed that 24 of the 70 people surveyed strongly want to continue high school and obtain a baccalaureate degree after graduation from the German Vocational School Kronstadt. In contrast,


only 11 of the 70 students will not get high school diploma. Also, 15 out of 70 people strongly want to finish their studies and get a degree, and 17 of those surveyed want to make this to a great extent.

The fact that a large proportion of the young people who study in the German Vocational School Kronstadt and who have chosen Schaeffler Company for the practical placement, have expressed their willingness to continue their studies can represent both an opportunity and a threat for the company. It would be an opportunity if young people want to commit to Schaeffler, the jobs requiring higher education, because they will know the company to the smallest details and will know how to address those works as operators, but they will also be specialists in the field who have obtained a degree. The risk arises in the cases when young people will choose to work elsewhere. Thist may happen both if the students complete their higher education, and if they do not. Schaeffler has invested a significant amount in their development, and if they work with other companies in the field, it is a loss for the company. This research has revealed the relevance and impact that the school has on its students. It has also shown that investment by Schaeffler and the other partners is beneficial for the community of Braşov, but also for people living near Braşov County.

SC Schaeffler Romania SRL has chosen to invest in this vocational school, because it wants to prepare future employees and to enhance their loyalty, given the high rate of retention, especially on CNC operators.

The need for vocational education was notified by Schaeffler, following a survey in Romania, where it was observed that the laboratory practice in technical schools declined from 800 hours of practice (1989) to 300 hours (2010). The offer consists of students with technical specialisation, but

this does not cover the demand of big companies for positions such as CNC operator, electromechanical, mould toolmaker and sewer of leather and substitutes pieces [7].

Investing in this vocational school offers a number of opportunities for Schaeffler Romania, but also a number of threats:

Opportunities • trained employees, familiar with the used technology; • loyal employees who will complete this vocational school, because they will be brought up in the spirit of the organizational culture of the company; • implementation of a series of resources shared with other partner companies, so the cost to prepare the students is lower; • decrease of the costs related to the integration of students into the company, because they will already be familiar with the company culture.

Threats • students can complete this school and choose to go abroad and engage in other business, which would mean awasted investment for Schaeffler; • slower return on the investment made if students choose to continue their high school education and only after finishing these studies they choose to engage on the completion; •students may choose to continue with college and then they want to commit to a superior position and not to the positions as CNC operator which the company requires to be covered by.

These threats, however, are reduced by the framework agreement concluded between Schaeffler Romania, parents of children who learn at Kronstadt School and have practical stages in the company and students of this school.

The initial investment for German Vocational School Krondstadt was about 16 billion lei. An amount of 10 billion lei was invested by Braşov City Hall who


restored the building and executed repairs and thermal insulation. Also, Braşov City Hall still gives a monthly operating expense. Other expenses, representing nearly 6 billion lei were made by businesses involved in carrying out this project. A percentage of about 35% of the total initial investment made by the companies, or about 2,000,000,000 lei belonged to S.C.Schaeffler Romania. The investment of the traders covered the following initial outlay: - Costs of equipping laboratories with modern equipment; - Expenditure on equipping classrooms; - Expenditure on schooling teachers; - Personnel expenses involved in this project: project coordinator, who made the selection process, those who have dealt with the promotion and so on; - Vocational School Kronstadt promotion expenses-materials used.

Also, operators are granted a monthly amount for the teaching process, depending on the number of students enrolled to have practical placements in the company and business people who are the trustee of these students. Schaeffler Romania has the following monthly expenses: Monthly expenses Table 1

Expenses Approximate amount

Scholarship 200lei ×149 = 29,800lei

Students transport ~ 1,000lei Students meal ~ 4,100lei Students trustees ~ 20,000lei Other staff involved ~ 10,000lei Promotion expenses ~ 200lei TOTAL ~ 65,100lei

The strategy used by Schaeffler company, will bring the company' not only proficient employees but also a better image in the community of Braşov,

because in addition to schooling, the company will also offer them jobs or internships in Germany.

The results can not be visible yet, in terms of labour productivity growth since the first generation of students, have not graduated yet, in order to make the transition to the labour market, but the results are expected to occur in late 2015, when students will already be employed by the company.

This is the medium and long term strategy, as students can choose to work in the company at the end of the two years of study or continue their studies, and apply for a job offered by this company. The company has the opportunity to recover the investment made in 2-5 years after the first generation of students finishes studies. 5. Conclusions

Since Schaeffler Romania is a subsidiary of the Schaeffler Group (which is the market leader in terms of quality), it took from the beginning a high degree of responsibility for the quality policy it holds. As a forward looking company, Schaeffler Romania emphasizes quality and professionalism. Using the latest technology and continually investing in the professional development of the employees, the company has demonstrated that its team is part of a professional elite whose maximum professionalism and exceptional results are a dedicated work style.

Thus, in addition to trying to induce the quality policy to current employees, they also try to prepare the potential future employees, investing in schools and making a series of activities that seek to empower and to attract them to this company.

The Schaeffler investment in the German Vocational School Kronstadt is actually a strategy to improve the quality of human resources. In order to have proficient


future employees, not only the schooling process is important, but also the basis that students studying in this school have. So the process of selection is an important step. In addition, the teacher training is important, as revealed by the research conducted among school students. In order to enrol a number of promising students at this school, a strong promotional activity is needed.

To attract new students, the school should rely - on the strength that it has, i.e. the image the population has about Schaeffler Romania and to organize an open day for both students and their parents. In this way they manage to know more details about the company they may work with. This event may be extended with an open day in the German Vocational School Kronstadt for those interested to see the conditions of teaching in this school.

Another opportunity for the German Vocational School Kronstadt could be the use of the internet and social networks for promotion. The school has a Facebook page, but it is not used to its full potential. The school website is well structured and contains the information needed to convince parents and students to take a decision regarding enrolling at the school, but it is not promoted enough locally.

References 1. Băltescu, C.A.: Strategii de marketing

în turismul montan românesc (Marketing strategies in Romanian mountainous tourism). Braşov. Ed. Universităţii „Transilvania” din Braşov, 2010.

2. Bratucu, G., Boşcor, D.: Marketing. postuniversitar de Master (Marketing. Post academic Course). Braşov. Editura Infomarket, 2008.

3. Filip, N.: Metode de asigurare a calităţii (Quality assurance methods). Braşov. Ed. Universităţii „Transilvania” din Braşov, 2008.

4. *** Revista Schaeffler România, nr.10, noiembrie 2013, pg.9

5. www.schaeffler.com/remotemedien/media/_shared_media/03_worldwide/02_websites_worldwide/romania_1/schaeffler_romania_presentation_en.pdf (accesed 02.11.2013)

6. www.sgk.ro/ro/despre_sgk.php (accesed 10.12.2013)

7. www.sgk.ro/ro/despre_sgk.php (accesed 12.12.2013)


IMPROVING MANAGEMENT OF SUSTAINABLE DEVELOPMENT

IN UNIVERSITIES

M. POPESCU1 I. C. BELEAUA2

Abstract: This paper aims to improve the implementation of sustainable development principles in universities. The study's specific objectives are: making a comparative analysis of models to evaluate and implement the values of the sustainable development in university; presenting a model for the management system of sustainable development in university. The study is based on data from the literature on the implementation regulations and status of sustainable development in universities and a case study. The analysis concludes with the presentation of major axes of action for a more systematic approach to specific issues of sustainable development management in university. Key words: Sustainable development, Education for Sustainable Development, University Management System for Sustainable Development.

1 “Economic Sciences and Business Administration” Faculty, Transilvania University of Braşov. 2 Economist, alumni of Transilvania University of Braşov.

1. Introduction The concept of “sustainable

development“ (SD) was defined in „Our Common Future”, the landmark report of the World Commission on Environment and Development, as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” [22]. Although it has appeared in connection with the environmental problems, the meaning that the concept is given today is broader, including ecological, economical

and social aspects [7]. The education is the field where the

concept of SD is more and more applied, the most used collocation being Education for Sustainable Development (ESD) [4]. In higher education (HE), which this paper is related, promoting SD values is considered to be a strategic axis of each HE institution, materialized under specific forms in all three dimensions of their mission: education, research and services for community.

Considering the importance of this approach, there have been developed


strategies, policies and guidelines that are presented in the documents elaborated within the framework of European and international programmes and networks. Starting in 1990, university representatives convened several conferences around the world and produced a series of European or internationally recognized declarations focused on Higher Education Sustainable Development (HESD), such as: the Copernicus Universities Charter on SD (1994), the Luneburg Declaration on HE for SD (2001), the Ubuntu Declaration on Education and Science and Technology for SD (2002), the Graz Declaration on Committing Universities to SD (2005) [5].

Copernicus-Campus – as the European university framework for SD, is taking up leadership in the European HE area, to mobilize universities around the theme of sustainability [13]. Another important initiative, which addresses SD in HE, is the strategy of the United Nations Economic Commission for Europe (UNECE), and respectively the program Decade of Education for SD (DESD) (UNESCO, 2005) [21].

All of these documents and guidelines have determined major changes in HE, towards the implementation of the SD values. The action ways and the results of these processes are summarized in numerous studies and reports.

So, in 2009 was published the DESD Global Report Learning for a Sustainable World [18]; this mid-Decade review reports the difference between regional ESD strategies, and illustrates also the progress made and obstacles encountered during the first five years in establishing strategies and mechanisms that support the development and implementation of ESD.

Numerous other studies and reports concerning ESD are presented in the

literature and on universities websites. As a general remark, the authors appreciate that the stage of SD implementation in universities is moderate.

Thus, in his study [3], W.L. Filho states that even though over 600 universities worldwide have committed themselves towards sustainability by signing international agreements, and several thousand of them are pursuing matters related to SD on an ad hoc basis, many of them have not succeeded in fully implementing the principles of SD into practice due to a combination of reasons, varying form lack of institutional interest, to limited resources or staff involvement.

Several studies, based on the analysis of universities’ websites, show that, although there is a wide interest and observable measures of certain universities to reduce the effects of their actions on society and environment, there is a lack of clear understanding of the possibilities of implementing SD principles in universities. Even in countries which do well in national comparisons related to sustainability, like Sweden or USA [2], [6], [10], universities are not working with SD to the extent that could be expected considering the university law.

Similar conclusions regarding the low level of the implementation of SD values in universities are formulated in the study on the HE in Romania [8]. The results of the study state that the main obstacles in implementing the concept of sustainability in Romanian HE are: lack of financial resources, no communication or ineffective communication between the organization’s structures, lack of a favourable organizational culture, backward mentality of the people, and inertia or resistance to change.

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2. Aims and objectives Considering the essential role of HE in

promoting SD, the present paper aims to contribute to the improvement of the implementation of SD values in universities, by appropriate management tools. The study’s specific objectives are: comparative analysis of SD implementation and evaluation models; defining a model for SD management system.

The methodology of the study consists on a systematic analysis of the approaching ways of SD in universities, based on scientific studies. Research includes also a case study approach of sustainability in one university. 3. Evaluating the approach of SD in

universities

The methods of approaching sustainability by academic institutions vary very much. The most important differences, revealed by several researches/ studies are presented below.

a) In terms of issues considered, some universities focus their efforts on reducing the environmental impact of their operations, while others focus on integrating SD in the curriculum and/or in the scientific research. While the manner of defining and approaching sustainability within university is very different, reflecting cultural, economic and political diversity, most of the documents/papers highlight the following significant areas of the ESD in universities [11],[12]:

• Policy, planning and administration: this topic addresses the mission, policies and planning on SD, the communication processes, administrative

positions and committees, SD audits, assessment and reporting.

• Research: encourage research on SD issues for resolving society’s problems, and for developing new methodologies/ models and tools for approaching economical, social and ecological problems in a sustainable manner.

• Teaching: the integration of the SD concepts in curriculum across all disciplines, so that future HE graduates develop new attitudes and skills necessary for SD.

• Services and collaboration with the community: supporting sustainability efforts in the communities, working with local authorities and civil society to foster more livable, resource-efficient communities and socially inclusive, and have small environmental footprints.

• Internal environmental work: actions focused on reducing the effects on the environment of university’s activities and encouraging more sustainable lifestyles.

b) In terms of implementation methodology of SD in universities, there are two different strategies: incremental and holistic integration [13].

• Incremental integration: in this case, university starts with one project that creates awareness and visibility of pertinent issues, and then progressively evolves to encompass other functions of the ESD.

• Holistic integration: was adopted by universities situated in cities that took sustainability very seriously. This meant that a reinforcing cycle of sustainability activities between the city, the university, the staff, the citizens and the students was established.

c) The assessment methodology of SD level is very important for continuous


improving of SD results in university. From this point of view there are several models, some of them will be presented.

So, Agenda 21 (action plan of the United Nations with regard to SD) tends to be complemented with a set of indicators which make it possible to monitor whether the proposed measures actually lead to achieving the strategic targets, and thus to a change in a given aspect of reality [5].

In some countries there are used standard methodologies of SD assessment. One example is the College Sustainability Report Card (2011) [17], applied to evaluate the environmental sustainability efforts at 322 schools in the United States and Canada. Four surveys were designed to gather information about sustainability in campus operations, dining services, endowment investment practices, and student activities, a total of 52 indicators being used to evaluate performance within these categories. Likewise, some universities periodically elaborate plans and reports at institutional level, such as: University College London [21] and Princeton University [16], these being only two examples.

STARS (Sustainability Tracking, Assessment & Rating Systems) is a model developed by the Association for the Advancement of Sustainability in HE, in order to offer a framework for assessing their own performances in the field of sustainability, as well as creating a common standard of evaluation [15]. The STARS criteria include the environmental, economic and social indicators of sustainability, which are divided into three categories, related to: Education and Research; Operations; Planning, Administration and Engagement.

AISHE (Assessment Instrument for Sustainability in HE) is an evaluation tool

developed by the Dutch Foundation for Sustainable HE, which assists universities as consultant for measuring the success of integrating SD [10]. The AISHE is an assessment model based on processes, and consists of 20 different „criteria”, especially regarding educational aspects, measured by a quantitative method.

4. Model for SD Management Systems

in Universities

The previous analysis shows that there are no unique patterns of action, and that there are not generally used instruments for implementing SD values and for evaluating the results. Elaborating unitary models could help improving the effectiveness of university approach for SD, and controlling the implementation of the programs developed at international, regional and national levels.

The model proposed in this paper is based on the idea that to be applied, SD principles should be reflected in the university’s strategy and objectives, and there should be defined responsibilities and developed appropriate processes to achieve the objectives and to control the activities and the results. In addition, there should be provided the necessary resources, the training of human resource being one of the key success factors.

In the above description there are mentioned the main processes for achieving SD, shown schematically in Figure 1. System configuration has to be harmonized with the ISO 9001 model for quality management systems [14], which promotes an approach based on processes. The figure shows three distinct processes: management processes, core/basic processes and suport processes (for ensuring resources).


• Management processes include: developing policies on SD, defining general axes of action and overall/general objectives; planning SD system; establishing responsibilities; defining communication processes; analyzing SD activities and results.

Through these processes the coordination at senior management level is ensured, essential for the successful implementation of SD and for achieving long-term benefits. The major role of senior management is to achieve behavioural changes so that SD would be integrated in the everyday life of the university.

Policies and general objectives underlie the planning of organization activities for shorter periods of time, including the projects on which depends the achievement of strategic objectives. The extent of the changes and of the objectives level should take into account the available resources and the cultural particularities of the university.

• The basic processes relate to the activities that contribute directly to the achievement of the established targets.

Considering the world experience on the integration of SD in universities, the model proposed in this paper associates the basic processes to four directions of action concerning SD in HE: development of student’s skills; scientific research of problems associated with SD; joining and supporting the efforts for sustainability of the socio-economic community; campus sustainability – resource management. • Resources management is presented in

Figure 1 as a distinct block, being associated to processes that ensure the necessary resources for the activities related to SD. In this context, human resource plays a very special role, and requires staff training and skill’s assessment, in terms of sustainability.

Fig. 1. Management System for Sustainable Development

Management processes o Strategy and policies o System planning o Establishing responsibilities o Leadership/ communication o Performances assessment

Management of resources o Human resource o Infrastructure o Work environment o Data bases

Basic processes o Education o Research o Services for community o Campus sustainability


• The structure of the management system described above has a similar configuration with the one presented in the model ISO 9001- Quality Management System. The analogy with the international standards of quality has several motivations:

1) Promotes the principles and the requirements of modern management, which can be applied in any field, as: the system approach, leadership, staff involvement, approach by processes, continual improvement. The implementation of the PDCA mechanism (plan – do – act – check), both at organization level and in change projects or repetitive processes – represents the essence of a well done management.

2) the implementation of SD in connection with quality assurance and other principles of Bologna process. SD can be considered a component of the university management system, which is associated with new requirements more severe, on harmonizing economical development, human conditions objectives and the protection of nature.

3) the harmonization of the SD approach with the quality assurance creates the framework for the development of integrated systems, which includes specific management tools of other models applied in European universities (ISO 9001, ISO 14001, EFQM etc.).

Finally, there must be emphasized the need for introducing criteria and measurable indicators that allow the results control and the planning of activities related to sustainability, for each of the four major axes of SD. The indicators of the assessment models mentioned above (at §2) and good practices can be a reference in solving this problem, but setting indicators and performance

standards remains a problem of each university.

5. Case study

The case study reffers to Transilvania

University of Brasov and it is based on the model presented above, concerning the management of the SD actions. The approaches associated with the four axes of action are analyzed distinctly, including management processes. The assessments primarily aimed the management tools that are used; the analysis of results is limited to qualitative assessments.

SD has been defined as strategic axis of the university’s development since 2007, by implementing SD values in the scientific research. For 2007-2012 the assumed areas of research are related to sustainability issues: renewable energy systems an energy efficiency; conservation and capitalization of natural resources; health and quality of life; education, culture and communication. The research results contributed to the promotion of sustainability in the other services provided by the university – such as training and services for community. Also, actions for the campus sustainability, focused on the use of renewable energy have been made. University’s strategy for 2012-2016 [19] continues to pursue the SD values promotion, setting clear objectives in this regard.

For each of the SD dimensions have been launched projects and programmes for the improvement of the activity, both at university and faculty levels. The actions are coordinated at a higher level, the responsibility for the SD approach being associated with senior management (rector and vice-rectors).


From the perspective of a management system for SD, lack of control mechanisms for the sustainability results, can be considered a weak point. So, although inside the university can be observed the concern for sustainability and there are appreciable results on SD, they are poorly known in the absence of appropriate tools and methods for promoting and measuring progress. This shortcoming is found on each of the four axes of materializing SD in university.

Thus, in terms of education, the preliminary analysis [1] reveals that there is a visible progress in the last years, but there are no indicators to measure the degree of integrating SD issues in the curriculum.

Changes that have been made in curriculum relate to the ongoing process of renewal and modernization of the study programmes. The decisions of introducing new programmes and modernising the existing ones were based on market requirements, the need of harmonizing the university curricula with the European ones and to improve the internal resources efficacy; also, it was taken into account the development of study programmes lines at Bachelor-Master-Doctorate degree, on areas in which excellence research is based on the university’s resources. This policy has had significant impacts on the quality improvement of study programmes, and on the integration of SD into education.

Scientific research is the university’s area in which the SD orientation is the most visible and obvious. Ongoing projects and partnerships are visible on university’s website that highlights the university involvement in solving problems associated with SD. From the perspective of integrating SD in research, the weak point is the lack of information on the

amount of the projects and the events related to SD and the insufficient promotion of the results of these actions. The same remark can be made on university participation in the local community to promote SD. A registered progress is represented by the introduction of the university’s newsletter, since 2012, but this form of promotion does not provide the necessary information for university’s management in order to measure the progress in implementing SD.

Physical aspects – energy and water resources, buildings and terrains, wastes etc. – refer to the university actions with direct effects on the environment. In this area, there are some achievements regarding the use of alternative energy resources, the collective selection of waste, etc., but there are still problems in the effective operation of the system, related to the behaviour of the academic community members. To these aspects is added the concern for the enhancement of effective use of university’s buildings, which are the subject of a series of projects for the rehabilitation and modernization of the patrimony.

There are concers, likewise, regarding improvement of the life quality in university, by promoting inside the university a favorable climate for human resource training, development and motivation, this being one of the strategic objectives for 2012-2016. The economical aspects, also, are references in the decision process at all levels, there are specific structures and tools developed for planning and controlling economic resources. These issues are associated to management processes and are analyzed systematically at the assessment of the institutional quality and study programmes.


5.1. Key results The present paper can be a reference for

the improvement of SD approach in university, based on formal policies and systematic actions. Priority issues to be solved are the following:

-Management: defining the management system for SD and the addressed SD areas; developing tools for SD planning and control; clarification of the connection between SD and the quality system of the university;

- Education: evaluating the share of the SD issues in curriculum and in the study programmes conducted within university; introduction of specific assessment tools regarding student skills in SD;

- Research: improving tools for SD assessment in the research activities (projects, publications, events) and the significant results dissemination, too.

- Relations with the economic and socio-cultural environment: developing urban and social studies considering the campus-city relationship for establishing policies and specific objectives to ensure their cohesion;

- Resources: developing policies and plans relating to continual development of the management tools for improving: the use of energy and water, the selective collection of the waste, the financial planning and risk analysis, the social framework and human resource motivation etc.

Research results also indicate the need to introduce regulation and measurement indicators of sustainability at national level, for the effective implementation of SD principles in daily activities of HE institutions.

6. Conclusions

Although there are many programs and documents relating to the implementation of SD principles in universities, this process also involves difficulties. The paper emphasizes on the completeness of the process and the decisive role of university leadership in creating adequate management tools. The authors propose a model for SD management system, harmonized with the quality system of the university.

The proposed model is the basis of the case study conducted by the authors and summarized in the paper. The analysis highlights the strengths and weaknesses, providing useful information for measuring progress and continuous improvement of university performance on SD.

Priority of action must be given to introducing criteria and measurable indicators that allow results control and the planning of activities related to the university sustainability. In the authors’ opinion, setting indicators and performance standards is an important problem of each university. The assessment and communication of the results on the implementation of SD in the university, using periodical reports is also a very important aspect to be considered.

It is envisaged broad involvement of students in these processes, thus ensuring, and in this way, the development of students' skills in SD: defining coherent programmes of action will allow the increasing of student’s involvement in solving problems, through dissertation/ licence project and other projects and programmes. It also required awareness of all categories of employees, by participating in training programs related


to SD issues and by evaluating personnel’s skills and attitudes, this being an important aspect.

The novelty brought by this paper is the approach of the SD management in a more formalised manner, based on PDCA mechanism, in connection with the quality system of university. References 1. Beleaua, I.C. (author), Popescu M.

(coord.): Implementing Sustainable Development values in universities, Case study to Transilvania University of Brasov. In: Dissertation thesis. “Transilvania” University of Brasov, 2013.

2. Faghihimani, M.: Best Green University Practice. Green UiO Office. University of Oslo, 2010.

3. Filho, W.: About the Role of Universities and their Contribution to Sustainable Development. In: Higher Education Policy 2011, p. 427 – 438.

4. Filho, W.: Towards the Promotion of Education for Sustainability, http://www.revistaeducacion.mec.es/re2009/re2009_12eng.pdf

5. Hrebik, S., Trebicky, V., Gremlika, T.: Manual for planning and evaluation of SD at the Regional level. Office of the Government of the Czech Republic, 2006.

6. Isaksson, R., Johnson, M., A.: Preliminary Model for Assessing University Sustainability from the Student Perspective, sustainability. In: Sustainability 2013, 5, 3690-3701; doi:10.3390/su5093690, www.mdpi.com/journal/sustainability.

7. Kates, W.R., Parris, M.T., Leiserowitz, A.A.: What is SD? Goals, Indicators,

Values and Practice. In: Environment Science and Policy for SD, 2005, No 3, p. 8-21.

8. Oprean, C., et al.: The sustainable development in Romanian higher education. In: Revista Congreso Universidad, Vol. I, No. 1, 2011.

9. Roorda, N., Martens, P.: Assessment and Certification of Higher Education for Sustainable Development. Mary Ann Liebert, INC. Vol. 1, No. 1, February 2008.

10. *** 2012 Sustainability Reporting of the Top U.S. Universities, Roberts Environmental Centre, 2011.

11. *** AGENDA 21, United Nations Conference on Environment & Development Rio de Janeiro, Brazil, 3 to 14 June 1992.

12. *** Copernicus Guidelines for Sustainable Development in the EHEA, www.copernicus-campus.org

13. *** Higher Education for SD- Final Report of International Action Research Project– March 2007. https://ose3.mst.edu/media/campussupport/ose3/documents/AASHE%20STARS%20-%20Final%20Report.pdf

14. *** ISO 9001:2008 – Quality Management System – Requirements.

15. *** Missouri S&T AASHE Sustainability Tracking, Assessment and Rating System (STARS). Final Report, September 10, 2012.

16. *** Princeton University, https://www.princeton.edu/reports/2011/sustainability/

17. *** Report Card 2011, http://www.greenreportcard.org/report-card-2011.

18. *** Review of Contexts and Structures for Education for SD Learning for a sustainable world, UNESCO, 2009.


19. *** Strategy of Transilvania University of Brasov, 2012-2016, http://www.unitbv.ro/DespreUniversitate/Documenteleuniversitatii.aspx

20. *** UN Decade of Education for SD, http://unesdoc.unesco.org/images/0014/001416/141629e.pdf.

21. *** University College London, http://www.ucl.ac.uk/greenucl/docs/ucl-es-annual-report-2011-12.

22. *** World Commission on Environment and Development, 1987, Oxford University Press: Oxford, UK, 1987.


ASSESSING THE QUALITY OF STUDENTS’

ACQUIRED COMPETENCIES IN A MASTER’S PROGRAMME

Silvia SUMEDREA1

Abstract: Developing and monitoring the quality of the educational process in higher institutions is a key issue of the Bologna process. The aim of this paper is to present the results of an empirical study concerned with assessing the quality of the competencies gained by Master’s students in strategic financial management. Prior to this paper, a research study has been carried out to identify the managers’ perception over the Master’s students’ competencies and the results indicated that competencies in strategic financial management are crucial for future managers. The research is focused on improving the quality of the educational process by developing a wider base for communication with the Master’s students in order to help them develop better learning skills and to facilitate their forthcoming insertion in the labour market. Key words: quality assessment, professional competencies, Master’s educational process.

1 Dept. of. Management and Economic. Informatics. ,”Transilvania University of Braşov.

1. Introduction A large number of recent studies

(Ceobanu, et al., 2008; Sumedrea, Antonoaie, 2008) have revealed the fact that, as elsewhere in the world, universities in Romania have to face a competition that has more and more economical features. The universities from the European Union have to face a global educational market; they are constrained to secure financial resources through competition, whilst the labour market has gone through dramatic changes as a consequence of the financial crisis and the natural decline in population.

Rituparna Das (2009) stresses that professional education is undeniably a production process and that a final year student equipped with managerial skill and

training is human capital but also skilled labour; he then concludes that a final year professional student is a product of professional education. Applying the above idea in the educational system, we can find inputs, processes and outputs; when referring to a professional student, the output at every stage is represented by the results in every semester and the input is represented by modules of different curricula assimilated during the semester.

A wider range of educational services offered to young people allows them to choose the one that is most suitable for them. The European System of Transferable Credits offers an unprecedented mobility and more and more students, when selecting the university of their choice, take into account


environmental reasons (economical, social, etc.), the study domain, the possibility to further use their qualifications, but also factors like their personal system of values and beliefs (Garcia-Aracil, 2008). The specialised literature has shown great interest in the relationship between the learning process and the students’ degree of satisfaction (Ramsden 1991; Wilson et al. 1997; Richardson 2005). Based on these references and outcomes of the Bologna process, this paper aims to present the results of an empirical study concerned with assessing the quality of the competencies Master’s students gained in strategic financial management.

2. Quality assessment of the educational

process – part of a sustainable educational system

In time, two concepts regarding the

perception over the quality of higher education have been developed at academic level (Barnet, 1992). The former concept focuses on the quality of the academic environment, on the moral values that all academic members should posses for a university to be able to perform high quality activities, while the latter concept is centred on the quality coming from the performance of a system, with inputs and outputs that can be measured, analysed and evaluated.

Students are an important part of the academic community, as they are the key purpose of universities’ existence. From the point of view of the educational system quality, developing professional and transversal competencies is important, but students’ satisfaction with the competencies they acquired during the educational process is equally important.

The process of assessing the educational process has been regarded in different studies (Hounsell, 2003; Fich, 2003) as being a complex course of action

where the context and the purpose of evaluation must be clarified, including the method of collecting and the use of information.

As stated in the specialised literature (Marsh and Dunkin; 1992; Chen and Hoshower, 2003, Fich, 2003; Richardson, 2005), teaching and/or course evaluations could be used for four different purposes, including:

• as a formative and diagnostic feedback mechanism (for use, for example, towards improving teaching and courses); • as a cumulative feedback mechanism (for use, for example, in personnel and administrative decision-making); • as a source of information for prospective students when selecting course units and lecturers; and • as a source of data for research on teaching.

Fig.1. The evaluation cycle (Hounsell,

2003, p. 210) The most important objective of this

paper is to identify how this type of assessment could serve as a pillar for a wider feedback mechanism in the professor-student relationship, with a view to improving the course and the teaching methods, as well as to boosting the approval level from future graduates of Master’s studies.

Over the last decade, managers and academics in the higher education sector

S. SUMEDREA: Assessing the Quality of Students’ Acquired Competencies in a … 109

have focused on identifying and measuring the link between performance and students’ satisfaction. The reason is that a satisfied customer will recommend that service to other prospects and will be inclined to continue the relationship with the education service provider (Ceobanu et al, 2008). In order to implement such a feedback mechanism and to gather support for the idea, it should be remembered that students are not competent to evaluate teaching roles such as those involving course design (objectives, content, methods and assessment), delivery methods or grading practice in assessment. Individual lecturers, their colleagues, curriculum design experts and Heads of Department are best placed to provide feedback on such matters. However, as for the quality of the education received, it is generally agreed in the literature that only students are in a position to give feedback. (Keane & Mac Labhrainn, 2005)

Many tools are available to help students assess the learning and teaching effectiveness, end-of-term course evaluation being only one of them. Other tools, grouped under the name of Classroom Assessment Techniques (CATs) serve to assess the degree to which students understand the course content and to provide information about the effectiveness of the teaching methods. According to Haugen (1999), the main CATs are designed to asses the following: • Course-related knowledge and skills

(recall and understanding; analysis and critical thinking skills; synthesis and creative thinking skills; problem solving skills; application and performance skills);

• Student attitudes, values and self-awareness (including students’ awareness of their own values and attitudes; students’ awareness of their own learning processes; course-related learning and study skills awareness);

• Reactions to instruction methods (including student and peer reactions to teachers and teaching, class activities, assignments and materials).

3. Identification of Master’s students’

perception regarding the educational process

The research is built on previously

developed management Master’s curricula in our university, using results from other management curriculum programs and research studies related to managerial competences, developed both in Romanian universities and abroad. Prior to this paper, a research study has been developed in order to identify the managers’ perception over the Master’s students’ competencies, and the results indicated that competencies in strategic financial management are crucial for future managers.

The study used data from an exploratory survey, focused on interviewing Master’s students about their opinion regarding the core competencies they acquired in strategic financial management during their studies.

The subjects were selected from among the Master’s students who attended a Master’s study programme in management. A study performed by Dalton & Denson (2009) revealed that the choice of a certain professional training route represents a good base for forecasting the degree of satisfaction of the questioned subjects. Since they choose that study programme from a national list of other similar programmes, we could consider that these subjects had a strong motivation in attending the courses offered to them.

The questionnaire has been handed out to students after one semester, following the exam session (that included the examination on the evaluated subject matter, based on individual tests and team projects) on anonymity basis. The


questionnaire included a set of 30 items derived from the objectives and competencies in the curricula, grouped in 3 sections related to the general, specialized and transversal professional competencies that the Master’s students consider to have acquired after attending the strategic financial management course. The perception over these items was assessed using a Likert scale, with the following 5 grades: “totally disagree”, “partially disagree”, “sometimes yes, sometimes no”, partially agree”, “totally agree”. To help with the data processing, points from 1 to 5 were later associated to these grades (1- totally disagree, 5- totally agree). The first section of the questionnaire aimed at identifying the degree to which the Master’s students deem themselves to possess general professional competencies in the evaluated subject matter, by asking them to express their degree of approval with 10 statements, related to their level of understanding of the specialty terminology, ability to explain at least 10 specialty terms, capability to identify at least 5 collecting sources for data needed for an essay in financial management, ability to understand various methods learned, techniques, models used in building and improving the financial strategy of a business.

The second section of the questionnaire was focused on identifying the satisfaction degree of the Master’s students over their specific competencies acquired in financial management, thus including basic issues related to their degree of understanding and explaining the tasks and responsibilities of the personnel working in finance - accountability, the data included in a company’s financial documents, the influence of external factors (environment) over a company’s performance, but also more complex issues related to their ability to use various methods, concepts, techniques for planning and improving

revenue and expense budgets, cash flows and financial strategies for allocating capital, securing financing and restructuring a company’s business. The third section of the questionnaire followed the perception of the Master’s students related to the degree to which they consider they acquired certain transversal competencies, such as the ability to cooperate with other persons in carrying out a project, to coordinate a project, to comply with deadlines, to work with incomplete data, to take financial decisions and to assume their consequences, as well as the ability to independently continue the process of acquiring new knowledge in the management field. 4. Outcomes of the research

The students asked to fill in the questionnaire were Master’s students in management who, besides the evaluated subject matter, have already studied disciplines such as Economic Forecasting, Computerised Tools for Data Processing, Managerial Accountability, Operational Management, Commercial Law, Risk Management and Leadership, some of these disciplines having required from students to deliver individual or team projects as part of their final exams. The questionnaire was intended to identify: - the degree to which the Master’s students

could integrate the knowledge delivered by various disciplines for developing their professional and transversal competencies;

- how a feedback mechanism in the professor – student relationship could be built so that the content of the courses could be improved;

- the degree to which the perception of the Master’s students over the acquired competencies is correlated with their examination marks.

S. SUMEDREA: Assessing the Quality of Students’ Acquired Competencies in a … 111

The results of the questionnaire were codified and processed, converting the qualitative comments into points, so that the relevant statistical indicators could be illustrated. The opinions of the Master’s students led to the following outlook: - the general score of all the items together

is 4,07; considering that this value is the aggregate average of individual values ranging between minimum 1 (totally disagree) and maximum 5 (totally agree) and correlating it with the fact that the evaluated subject matter is part of the fundamental disciplines of the Master’s curricula, it can be established that the Master’s students consider that they posses the evaluated competencies to a high degree; this result validates aspects presented in the speciality literature (Dalton and Denson, 2009), where it is held that students tend to be more satisfied with their results if they choose their professional path.

- out of the general professional competencies, the students consider that they possess, to a very high degree, the ability to explain the role and the importance of developing financial strategies (score 4,67 and 4,52 respectively), the ability to understand the way external factors influence the financial performance of a company (score 4,52), as well as the ability to identify and use at least 5 sources to collect data for an essay in the field (score 4,41).

- out of the specialized professional competencies, students consider that they possess, to a very high degree, the capacity to integrate the influences of external and internal factors in a SWOT matrix (score 4,44), the capacity to identify potential risks for a business and to explain their consequences (score 4,19), the capacity to identify adequate financing sources for a company (score 4,15), the ability to plan forecast revenues and expense budgets for a company using various statistical

techniques (score 4,11), the ability to understand and explain the impact of external factors over the financial performances of a company (score 4,07).

- out of the transversal competencies, the Master’s students, consider that they possess, to a high degree, the ability to work in a team (score 4,74), to comply with deadlines (score 4,67), to understand the consequences of the decisions they make (score 4,67), to work and communicate by making use of computerised tools (score 4,44); still, they consider they possess the competency to work with incomplete data to a lower degree (score 3,56).

- a strong positive correlation (0.63) exists between the degree to which Master’s students consider they possess the evaluated competencies and their examination marks.

5. Conclusions

According to Leitch (2006), an efficient professional competencies system coming from an educational system should meet the needs of both employers and employees.

The results of a previously undertaken study of the managers’ perception regarding the competencies required from Master’s graduates in management (Sumedrea, Antonoaie, 2009) illustrated that some of the most important competencies looked for as regards employees were the capacity to analyse and improve the financial performances of an organisation, to work in a team, to self improve and teach and to assume responsibility. The results of this empirical study indicate that the Master’s students consider they possess the competencies required by employers. We consider that conducting empirical studies such as this one systematically, professors can improve the process of knowledge transfer, and by


communicating the results to students and employers, they will contribute to the improvement of communication with interested parties and to the better understanding of the graduates’ acquired and requested competencies. References 1. Ceobanu, C., et al.: An Analysis of

Students Satisfaction in a Higher Education Context, Social Science Research Network. N.Y., USA, 2008

2. Chen, Y. and Hoshower, L.: Student evaluation of teaching effectiveness: an assessment of student perception and motivation. In: Assessment and Evaluation in Higher Education 2003, Vol. 28(1), p. 71-88.

3. Dalton, H., Denson, N.: Student evaluation: what predicts satisfaction? In: Proceedings of the 32nd HERDSA Annual Conference, Darwin, Australia, 2009, p. 100-110.

4. Das, R.: Quality Control in Management Education. National Law University Jodhpur - Centre for Studies in Banking and Finance, 2009,http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1397664

5. Fich, F., E.: Expanding the Pipeline - Are Student Evaluations of Teaching Fair? In: Edition of Computing Research News, 2003 Vol. 15/No. 3, p. 2-10.

6. Garcıa-Aracil, A.: European graduates’ level of satisfaction with higher education. In: High Education, 2008, 57:1–21, Springer Science + Business Media B.V.

7. Haugen, L.: Classroom Assessment Techniques (CATs). Center for Teaching Excellence, Iowa State University, 1999.

8. Hounsell, D.: The evaluation of teaching. In: A handbook for teaching and learning in higher education:

enhancing academic practice, H. Fry, S. Ketteridge, and S. Marshall (eds.). Kogan Page, London, 2003.

9. Keane, E., Mac Labhrainn, I.: Obtaining Student Feedback on Teaching & Course Quality. In: Centre for Excellence in Learning & Teaching Briefing Paper, 2, CELT, 2005.

10. Leitch, S.: Prosperity for all in the global economy world class skills, 2006, www.hm-treasury.gov.uk/leitch

11. Marsh, H., Dunkin, M.: Students’ evaluations of university teaching: A multidimensional perspective. In: J. Smart (Ed.) Higher Education: Handbook of Theory and Research New York, Agathon 1992, p. 143-223.

12. Ramsden, P.: A performance indicator of teaching quality in higher education: The course experience Questionnaire. In: Studies in Higher Education 1991, vol. 16(2), p.129–150.

13. Richardson, J.T.: Instruments for obtaining student feedback: A review of the literature. In: Assessment and Evaluation in Higher Education 2005, vol. 30(4), p. 387–415.

14. Sumedrea, S., Antonoaie, N.: Development of a competence based curricula for a master degree in management. In: The 5th International Seminar QMHE, Editura Performantica, Iasi, 2008, p. 81-86.

15. Sumedrea, S., Antonoaie, N.: Managers’ perception regarding master students’ competences – a driver of technological changes in higher educational organizations. In: The 6th International Conference MTC, Alexandropolis, Greece, Democritus Univer-sity of Thrace University Press, 2009, p. 379-382.

16. Wilson, K., Lizzion, A., Ramsden, P.: The development, validation and application of the course experience questionnaire. In: Studies in Higher Education 1997, No. 22(1), p. 33–53.

TOURISM

Bulletin of the Transilvania University of Braşov Series V: Economic Sciences • Vol. 7 (56) • No. 1 - 2014

TYPOLOGIES OF YOUTH TOURISM

T. DEMETER1 G. BRĂTUCU1

Abstract: Youth tourism differentiated itself from the concept of traditional tourism by the distinctive profile of its participants. In the last 10 years this branch had a very rapid growth, contributing significantly to any countries’ economy due to the amount of money that was spent by young people on different types of tourism. The aim of this paper is to present the most practiced forms of youth tourism, and their development worldwide and also in Romania. The conclusions show the most practiced types on a European and on Romanian level. Key words: Youth tourism, types, educational, volunteering.


1. Introduction After the Second World War, in an

attempt to prevent a third one by getting to know other cultures better, it became very popular for young people to go abroad in order to broaden their horizons, gain knowledge of other cultures, and to learn a foreign language [13].

At first, this kind of tourism was just a part of the traditional tourism concept, however, in time, its popularity began to grow rapidly, and the profile of the young traveller was differentiated from the profile of the classic tourist.

By the year 2010 there was estimated that around 20% of the 940 million international tourists travelling the world were young people [39].

As the popularity of youth tourism grew, so did the types of activities in which the youth engaged during these trips.

The aim of this paper is to present the most common types of youth tourism, together with an overview of its practice at European and Romanian level.

2. Conceptual framework The concept of “youth tourism” has been

broadly defined in the specific literature; however there is no clear definition universally set and accepted.

The term “tourism” is defined by the World Tourism Organization as: “activities of people who travel to and stay in places outside their usual environment for more than twenty-four hours and not more than one consecutive year, for leisure, business or other purposes” [43].

The World Youth Student and Educational Travel Confederation ads to the above mentioned definition the term „independent travel", which refers to trips taken by young people independently, without being accompanied by a parent or guardian [16].

The term of „youth”, according to the United Nations, is best understood as a period of transition from the dependence of childhood to adulthood’s independence and awareness of our interdependence as members of a community [42]. Youth is a more fluid category than a fixed age-group. However, the most common way to

Bulletin of the Transilvania University of Braşov • Vol. 7 (56) • No. 1 - 2014 • Series V 116

define it is by using this criterion. The UN, for statistical consistency across regions, defines ‘youth’, as the category of persons between the ages of 15 and 24 years [38].

The World Tourism Organisation, referred to the term of „youth” as people between the ages of 15 and 25 years. However, many studies have the upper age limit at 26 years in order to provide a better consistency to the studied group. [7]. This definition was extended by the Canadian Council and the North American Student & Youth Travel Association to include people up to 30 years old [13].

In Romania, according to the Youth Law, people are considered young between the ages of 14-35 [12]. However, in order to travel across the border without a parent or a legal guardian, one must be older than 18 [26].

Youth tourism was described by Haigh as young travellers who have preference for budget accommodation, place an emphasis on meeting other travellers, independently or in an organised manner, having flexible travel schedule and taking longer rather than brief holidays [5].

Studies show young tourists travel for a specific purpose, which can be one or more of the following: to experience a different culture, learn a language, volunteer, work or study [34].They are also keen to experience the local lifestyle and meet other people [11], and also to socialize with fellow travellers [14].

The majority of young tourists travel on a strict budget. They choose cheap accommodation, enabling them to have a relatively long duration journey and spend their money on a wide range of activities [11].

Furthermore, youth tourism implies flexible itineraries, as young tourists consider that the most memorable travel experiences are often those that are unexpected, and the finest discoveries are those they make themselves [2].

Based on the above mentioned characteristics, one of the most appropriate

definitions for “youth tourism” would be the one given by the World Tourism Organisation stating that: Youth travel includes all independent trips for periods of less than one year by people aged 16-29 which are motivated, in part or in full, by a desire to experience other cultures, build life experiences and/or benefit from formal and informal learning opportunities outside one’s usual environment [39].

3. Types of youth tourism

Youth tourism can have many types, however the following are the most often used: Educational tourism, volunteering, work and travel, cultural exchange, sports and adventure tourism and leisure tourism [12].

3.1. Educational tourism

The term educational tourism or edu-

tourism refers to any "program in which participants travel to a location as a group, with the primary purpose of engaging in learning experience that is directly related to the location" [1]. It is comprised of several sub-types including ecotourism, heritage tourism, rural/farm tourism, and student exchanges between educational institutions. The notion of travelling for educational purposes is not new [4];[6];[9]and its popularity in the tourism market is only expected to increase [4];[6].

Its aim is to improve the education process, to enrich the educational experiences by providing scholarships abroad, tourist packages that include camps, excursions, language classes for any level of knowledge, including training on certain fields (medical, legal, tourism, management, etc.) or on categories of interest (fashion, design, arts, theatre, dance, etc.). It also includes summer schools, and theme camps that are organized nationally and internationally [13].

The first educational travels were made by the English youth during the Grand

T. DEMETER et al.: Typologies of Youth Tourism 117

Tour in the seventeenth and eighteenth century [17].

A key reason for young eighteenth-century aristocrats, travelling for between six months and three years, was the perception that travel broadened the mind, and the travels were based around an itinerary which included learning visits to classical works of art and cultural landmarks [29].

The main destinations were: France, Switzerland, and Germany [17].

Currently the European young travel to learn a foreign language, and to get in touch with other cultures.

Annually at least 500 Romanian students visit countries such as England, Germany, Spain, France, China or even Russia with educational programs, that last minimum two weeks. During this time, they can study the language, have leisure activities, such as games and contests, make trips, visit museums, go to the theatre and visit theme parks.

Totalling a number of over 1300 study weeks in 2009. The most often visited country is England, where the students have a great variety of programs to choose from. Together with studying the language, they are also interested in special theme camps such as: leadership courses, acting, public speaking, history, globalisations and so on. These are subjects that contribute to the students’ personal development and also facilitate attending school in a foreign country in the future [33].

One of the most common methods to practice educational tourism is trough the Erasmus scholarship.

3.2. Volunteering

It is defined as the practice of individuals going on a working holiday, volunteering their labour for worthy causes in an organised way [19]. During volunteering, they perform activities such as “aiding or alleviating the material poverty of some

groups in society; the restoration of certain specific environments or research into aspects of society or environment” [20], while also performing alongside touristic activities [36].

Historically, volunteer tourism has its roots in the early 20th century, when a Swiss businessman Pierre Ceresole, horrified by the aftermath of the First World War, established Service Civil International (SCI) as an organisation of volunteers that provided relief to those in need [18].

Thousands of volunteers now use the services of a large number of different organizations which facilitate volunteering experiences. The volunteers vary in terms of their motivation, their background and their expectations, as do the organizations that facilitate their ‘deployment’ throughout more than three thousand projects spanning 150 countries [19]. Among other reasons, tourists are motivated because of purely altruistic reasons; social desirability; career enhancement; cultural immersion; comradely; and education or bonding with children [41].

Volunteer tourism endeavours can be either domestic or international. They can also vary in duration, depending on the project and the volunteer organisation involved [19].

Some might range from a week-long vacation with an afternoon spent volunteering at a local animal preserve while others might involve five days building a house with only a one-day leisure experience. Of course, everything in between is also possible. The amount of time spent volunteering versus participating in tourism activities varies depending on the desire of the volunteer and the needs of the receiving organization [41].

Globally, the number of individuals participating in volunteerism continues to rise.


In Britain, 73% of adults participated in at least one volunteer activity in 2007 [23]. In Australia, 4.5 million individuals reported participating in a volunteer activity in 2006 [22]. In the United States, volunteers provide free or inexpensive labour for more than 40,000 non-profit organization [10]. According to the U.S. Bureau of Labour Statistics, 60.8 million people volunteered for or through an organization during fiscal year 2007 [41]. National and local initiatives, such as the U.S. Freedom Corps, continue to grow in popularity.

The two largest groups participating in voluntourism are college students and people who were born between 1946 and 1964 and are now entering their retirement years [41].

3.3. Work and travel programmes

This type of youth tourism became very

popular amongst the young people who have a passion for travelling. Throughout the program, the participants are hired at a company in the host country usually in the summer holiday (3 months). During this period, they earn an income and they also have the opportunity to travel, familiarise with the local customs, learn the language, and as mentioned before, to travel, having a whole month to do so.

The program started from the USA, being first launched by Non-Government organisations, and during the years it spread also in Australia, Canada, Greece, Spain, France and Great Britain.

According to studies, over 7% of the youth travel global market is connected in some way or another to working abroad, and these tourists spend an average of 3.200$ [40] per trip, but 40% of the total cost is covered by working at the destination. Most young people participating in these programs make the decision to travel and work abroad based on the information gathered from friends

who participated in these programs, and the average duration of such a trip is 6 months [12].

The work and travel program gained its popularity quite late in Romania, but it had a great growth in the past 3 years, being encouraged by the people who already participated in this program. Internationally the program is attracting the largest number of young people from the East European area. Romania is amongst the first 10 countries to send students abroad with this program, based on the number of participants which was over 6000 in 2012 [32]. 3.4. Cultural exchange

This notion can be defined as the

exchange of individuals between different countries. This particular exchange is known to take place between students, artist, and athletes, in addition to many other types of individuals and professionals who express interested in it. Generally, this exchange takes place between two or more different countries who are trying to promote the same, if not similar, understandings [25].

These programmes, expose students to people from different cultural, religious, geographic and socio-economic backgrounds and in doing so, it provides them the opportunity to develop a greater understanding of diversity – both in their own country and worldwide. They allow the participants to interact with and learn from people who are different from themselves and to gain new and unique experiences beyond their own communities. Cultural exchange assists in developing positive relationships with others, understand a broader range of perspectives, and develop the knowledge and skills needed for participation in the multicultural society [27].

Cultural exchanges between youth started to develop after the Second World War when


cultural exchanges between young people of different nationalities were promoted, in order to avoid future conflict [12].

Traditionally, school cultural exchange programs brought together students from two or more schools to meet and interact in person, and student relationships were often maintained between visits using letter writing. Today, with new and emerging communication technologies and increased globalisation, cultural exchange programs may rely entirely on online or ‘virtual’ interaction, and/or incorporate these to compliment physical school (or community) visits. These developments also mean that exchanges may involve any number of school communities and are easily sustainable as regular or ongoing events.

During the program, the young people have the opportunity to live together with a family from the host country, for a shorter or a longer period of time. This can vary from one week to one year, time in which the tourist has to face the problems of the locals, and find solutions for them.

The fundamental purpose of a cultural exchange program is for students to share with and learn from others [27].

3.5. Sports and adventure tourism

Sports and physical activities are a part of the increasing variety of leisure activities and pastimes. This thriving leisure culture has led to the evolution of a sports tourism industry that has begun to earn an international reputation [28].

Sports tourism, or more correctly, Sport Tourism refers to travel which involves either observing or participating in a sporting event staying apart from their usual environment. Sport tourism is a fast growing sector of the global travel industry and equates to $600 billion a year. “Towards A National Sports Tourism Strategy" [24].

Sports tourists are more easily profiled according to the sports they follow.

However, in general terms the bulk of

the market tends to be young - between 18 and 34 years, and in the middle socio-economic groups [30].

Closely related to sports tourism is the adventure tourism, which can be defined as a type of tourism, involving exploration or travel with perceived (and possibly actual) risk, and potentially requiring specialized skills and physical exertion. One of the core features associated with adventure tourism is ‘the deliberate seeking of risk and the uncertainty of outcomes’ including the adrenaline rush associated with activities perceived by the participant to be dangerous or physically/mentally challenging. Essentially, much adventure tourism is a manufactured experience of adventure [3] and offers varying levels of risk [15].

Adventure tourism is a fast growing industry with an average spending per tourist of $947 in 2012, and the average length of an adventure trip being ten days.

Based on the results of a recent market study the value of the outbound adventure travel market for the Americas and Europe is estimated at $263 billion. These regions make up nearly 70 percent of the world’s international tourism departures.

The majority of adventure travellers are male and single/never married. The higher percentage of single adventure travellers may be due to the fact that adventure travellers skew younger with an average age of 36, compared to non-adventure travellers who have an average age of 41 [21].

In Romania, the main types of adventure and sport tourism practiced by the young are the following: trekking, hiking, alpinism, mountain biking, rafting, trips through the canyons, windsurfing, scuba diving, and paragliding, during the


warm season, while during the winter, it is practiced alpine skiing, snowboarding, snow tracking and ice climbing [31]. 3.6. Leisure tourism

The international youth leisure market

can be broadly defined as young, independent, adventurous visitors aged 15- 29 years old from overseas. This includes young people on holiday, visiting friends or relatives. The main emphasis being on the idea that this is a non working holiday and it is based on recreational activities. As a young age group, youth leisure travellers tend to have lower than average incomes and are price sensitive value seekers. Yet they are willing to stretch their budget to seek out personal indulgences and memorable experiences [35].

In the United States, Inbound and domestic leisure travel spending generated 76.0 percent of direct T&T GDP in 2011 (US$3,056.9 billion), compared with 24.1 percent for business travel spending (US$968.4 billion). With the new middle class in emerging countries, leisure travel will continue to outgrow business travel, which is already maturing in many emerging countries [37].

In Romania, this type of tourism is subject to seasonality, having its peaks in summer and winter. The length of the stay can be from one weekend till two weeks. 4. Discussion and conclusion

Educational tourism was one of the first

types of youth tourism and its popularity is still growing. The most visited destinations in Europe were France, Switzerland and Germany. Currently Romanian students choose England as their primary educational destination due to the variety of topics that it can offer them.

The more altruistic youth choose volunteering as a means of travel, which can happen either at a national or an

international level. This type of tourism is more popular in England and in America, demand for it on the Romanian market being very low.

A cost efficient alternative for the young who don’t have the necessary budget to practice educational tourism, and who would also like to earn money while travelling are the work and travel programs. It’s popularity having a high growth rate in Romania, mostly because of the participating students who shared their experience about it.

The best way to get familiar with the everyday life of a different nation is trough the cultural exchange programs, which allow the interaction with a local family at a day to day basis. In Europe it gained a lot of popularity, however in Romania not much interest has been show towards this type of youth tourism.

For the most active young people, the preferred type of tourism is sports and adventure tourism, which implies that the tourist are adrenalin seekers and engage into travelling with the purpose to do sports activities. This kind of tourism had a very fast development during the last years in Europe, and in Romania is also gaining popularity, especially because of the various sites where it can be practiced.

In any branch of tourism, leisure tourism is very popular. However, in case of youth this type is mostly practiced by the ones with a stable income who seek recreation and relaxation. In Romania it is subject to seasonality due to the local climate.

As shown in this paper, there are many types of tourism that can be and are practiced by the youth. It is also shown that the preferences of the European young traveller are slightly different from the Romanian travellers’. The first difference is that, on a European level, more emphasis is placed on cultural exchanges and volunteering while in Romania work and travel, sports and adventure tourism is more preferred. However educational tourism is highly preferred by both.


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THE ROLE OF INFORMATION CENTRES

IN PROMOTING TOURIST DESTINATIONS CASE STUDY: TOURIST INFORMATION

CENTRE BRAŞOV

A. ISPAS1 D. RADA2 A. SAVA2

Abstract: The main purpose of this paper is represented by the developing of proposals for improving the activity of Tourist Information Centre (TIC) in Braşov, starting from the fact that it has a very important role in promoting Braşov county. In the first part of the paper we focused on the theoretical concepts related to our topic, whereas in the second part we applied the benchmarking method for comparisons between three Tourist Information Centres in the world: Riga (Latvia), Girona (Spain) and Manhattan (USA), for adopting the best practices learned in our proposals to improve the activity of TIC in Braşov. In order to analyze the activity of TIC Braşov, we used the mystery consumer technique. The last part contains the conclusions and our proposals for improving the activity of TIC Braşov. Key words: tourist information, mystery consumer technique, benchmarking.

1 Dept. of Marketing, Tourism and Business Administration, Transilvania University of Braşov. 2 Dept. of Marketing, Tourism and Business Administration, Transilvania University of Braşov.

1. Introduction Tourists need to be informed when they

choose to go to a new tourist destination. The types of information required shall bear: what they can visit in that location, places where they may find accommodation or where to dine, how they can spend their time out there, where they can buy souvenirs etc. Most of this information can be purchased in time by visiting websites or consulting guidebooks. However, visitors of a place, of a region or country often seek Tourist Information Centres (TIC).

The TIC is often the first contact partner

of tourists from a certain tourist destination. Here tourists are offered new ideas of leisure, recommendations for accommodation or meal, and other important information. Also, when they arrive in an unfamiliar city, TIC is, for many tourists, the first place that they call in order to obtain information about the tourist offer. Therefore, the receipt and services provided by TIC shall meet the requirements of tourists from different countries.

Starting from these considerations, we wrote this paper in order to assess the activity undertaken in TIC Braşov, and to formulate proposals for improvement,


through the comparison made to other TICs. 2. Literature review

The main target of the hospitality industry, in general, and for a tourist destination in particular, is to generate the satisfaction of the tourists. Essential for tourism is informing tourists in the right place and at the right moment. Informing tourists means awareness of both the local population and the actual and potential tourists [4].

In terms of tourist informing, TIC represents a valuable resource for providing information on the spot and for influencing the visitor’s choice. They can have an influence on extending the length of stay and it can encourage visitors to return. The existence of TIC is based on consistent, impartial and current information.

Tourism awareness means understanding the basic principles of hospitality and tourism, the benefits and consequences of tourism and its development for the country, understanding the satisfaction of the visitors and concern for the customer and of the conditions for successful and sustainable tourism [5].

Tourist destination management is achieved through dedicated structures that need to manage the synergy of local players to achieve double effect: the satisfaction of the tourist and the locals and getting profit community.

Destination Management Organization (DMO) has the responsibility to evaluate the image of the destination and to supervise possible changes of image, which can be used to assess various means of promoting. The World Tourism Organization defines DMO as "organizations responsible for the management and/or marketing of destinations" [6]. The main task of DMO

is the coordination of tourism and the trade with tourist products. Furthermore, it must provide service elements such as their awareness and promotion which are not provided by private sector, and must serve a range of needs of the tourists, community of the residents, service providers in the hospitality industry [7].

In Romania, at regional or local level, DMO are represented either by the Association for the Promotion and Development of Tourism or Sustainable development agency or an NGO from the field of tourism. In the case of Braşov, DMO is the Association for Promotion and Development of Tourism (APDT).

For a tourist destination to create a competitive advantage, it needs to turn to benchmarking, meaning a search process of excellence, superior performance in relation to competing destinations to know themselves better and to evaluate the effectiveness of management [2]. According to the European Benchmarking Code of Practice, the benchmarking refers to comparisons between organizations and to learning the lessons that can be drawn from to these comparisons [1].

In order to analyse the activity of TIC Braşov we used one of the most popular types of marketing research, namely the technique of "the mystery consumer". This is an effective method of improving the quality of customer contacts, stimulation of the employees and attracting of new customers, as it is the process in which are used the mystery consumers who are guided by predetermined scenarios, assessing, based on questionnaires, integrity and the employees loyalty for companies, operations which they undertake, the employee behaviour in front of the customers, the product quality and/or services, as well as the merchandising [3].

A. ISPAS et al.: The Role of Information Centres in Promoting Tourist Destinations… 125

3. Analysis of the activity performed by Braşov Tourist Information Centre

In order to formulate our suggestions for

improving the activity of TIC Braşov, we started from the analysis of other TICs, recognized as examples of best practices.

Therefore, we have presented through comparison, in the table 1, three examples of these best practices, in terms of organizing and offered services: Riga (European Cultural Capital in 2014), Girona (Catalan city located in north-eastern Spain) and Manhattan (USA). 3.1. An overview of Braşov Tourist

Information Centre

TIC is an important instrument in promoting some tourist destinations. It is the place of confluence of all pieces of information in the area. The services offered are decisive, as well as the first impression, because many tourists associate it with the rest of their stay in the area.

Tourist information services are poorly organized, both at city level as well as in the entire county of Braşov. Although there is a tourist information network at county level, being set up by the Association for the Promotion and Development of Tourism Braşov (APDT), comprising 11 centres (Braşov, Poiana Braşov, Predeal, Râşnov, Făgăraş, Prejmer, Bran, Zărneşti, Săcele, Sâmbăta de Sus, Şinca Nouă), these do not answer in a adequately way to the diverse needs of tourists.

TIC Braşov is a structure that works in collaboration with the Municipality of Braşov and Braşov County Council, and is part of the network of Tourist Information

Centres in Braşov County. TIC Braşov, located in the Historical Museum Square no. 30, is open every day from 9:00 - 17:00. The staff offer information services, booking, guide services for tourists who contact the office directly, by phone or by e-mail.

The Tourist Information Centre's activities aim to promote the city of Braşov and its surroundings, as well as to provide all the necessary information for tourists visiting the area, the facilities offered, the opportunities for leisure, on trips that can be made to and from the area, and any information with tourist character, and not only desired by them [8].

Services offered by TIC Braşov: The possibility to choose the hotel,

villa or guesthouse which corresponds to the requirements and budget of the tourist to spend a weekend or a longer holiday in the tourist destination Braşov;

Information about accommodation possibilities, degree of comfort and prices;

Information required for hiking in the mountains around the city;

Status information of the ski slopes; Information about the sights and

Predeal, Sinaia, Bran, Râşnov, Zărneşti, Făgăraş;

Promotional and informational material: maps, leaflets, brochures.

Furthermore, TIC Braşov provides information about Braşov and Poiana Braşov related to:

The tourist potential which individualizes Braşov ;

Accommodation: hotels, motels, villas, cottages, guesthouses, agrotourism, camping;


Comparative analysis of three Tourist Information Centres Table 1

NAME OF THE

CENTRE LOCATION SERVICES OFFERED

TIC RIGA (LATVIA)

The TIC is located in the premises of the Schwab House, designed by Karl Johann Felsko at the end-19th century and erected right next to the 14th-century House of Blackheads. Both buildings were completely destroyed during the German air raid on Riga in June 1941. Fully reconstructed in 1999, the Schwab House now adorns Town Hall Square, along with the splendid House of Blackheads. The square also features the symbol of Hansa trading cities - the statue of Roland with the Riga coat of arms on the shield.

• LIVE RIGA souvenirs gaining BalticMiles points (find the offer here);

• online accommodation booking; • postcards, stamps and envelopes (there is a mailbox at

the TIC); • Riga Card, offering free museum entrance, as well as

discounts up to 50% for bus tours and guided tours in Old Riga, as well as at hotels, restaurants, entertainment, car rental and other places;

• Riga public transport electronic ticket (E-TICKET); • tickets to various events (BilesuServiss.lv); • LuxExpress and SIMPLE international express coach

tickets; • Various excursion tickets (guided tours, bus tours, etc.);• guides, books, maps and public transport scheme; • O!Karte mobile phone start package, top-up codes,

mobile internet cards and “Traveller’s start package”; • Rīgas Doms concert tickets; • BalticTaxi coupons. • Consultations in English, Russian and Latvian on

leisure and tourist opportunities, guided tours, tourist routes, bus routes and public transportation in Riga and to other Latvian destinations.

• Information on the best hotels and reservation on-line.

TIC GIRONA (SPAIN)

Tourist information is at the south end of the Rambla, beside the Onyar river.

• Guided tours in Girona old town; • A wide range of souvenirs; • Free brochures with and about the city of Girona and

Costa Brava region; • Maps, guides and books; • Sale of tickets for different entries in museums,

churches, cathedrals or tickets to local events; • Bicycle rental etc.

TIC MANHATTAN (USA)

TIC is located in Midtown Manhattan, the theatre area, two minutes away from Times Square.

• Free WiFi in the Centre and a special place for people who want to charge their cell phone;

• Travel essential and gifts- self-service store; • Travel packages which include entry into museums,

helicopter ride, cruises, trips to different locations etc.; • Maps, guides, brochures and books; • Bicycle and car rental; • Online reservation on their website

(www.gonytours.com) where you can get up 50% OFF; • tickets to various events etc.;

A. ISPAS et al.: The Role of Information Centres in Promoting Tourist Destinations. Case Study

Leisure possibilities: hiking, hunting, fishing, cycling, skiing, snowboarding, mountain climbing, rural tourism, ecotourism, medical tourism, ethnography, routes, destinations (adequate equipment required, guide list);

Transportation: train timetables, other public transport timetables, transportation companies working times, taxis, car renting;

Infrastructure and ancillary services (police, environment, mountain rescue teams, lifeguards, hospitals, pharmacies etc.);

Entertainment (clubs, cinemas, gaming – opening hours);

Shopping centres, high streets, souvenir shops, local events (datesand times);

Exchange offices, cash points, average exchange rates, local and international meetings and events within the local area.

3.2. The research results of the analysis

of TIC Braşov activity

In order to analyse the activity of TIC Braşov, we have performed a marketing research, using interactive analysis techniques. The purpose of this research is to identify the level of service and information offered by the TIC Braşov staff, and also the way in which the TIC is organised.

On this line, we have used the “mystery customer” technique. The research was held between 24 March and 13 April 2014, on a sample of twenty people between 18 and 26 years of age. These were divided into two categories, half interpreting the role of foreign tourists, and the other half representing national tourists. The criteria to follow were: the location and the ease of identification of TIC Bra�ov, the way of organising the interior of the TIC and its external appearance, the courtesy of the staff,

their level of knowledge, the type of information and services offered, the functioning program, the informative materials offered and also other objects commercialised within TIC.

Firstly, concerning the TIC Braşov location, all participants in the research have considered it very good, being situated in the centre of the city, but also very hard to find, only two of the twenty participants knowing where TIC Braşov is situated, without us mentioning to them. This is due to the lack of informative panels and signalling indicators, both from the city and its actual location.

Inside of TIC Braşov, the situation was not very different either. The complaints management is totally missing and there is no way to evaluate the satisfaction of tourists who come to the centre or regarding the tourist experience in our country. Another shortcoming noticed in 80% of the cases is the lack of a brand strategy and the publicity at point of sale, any means of this kind (brochures, books, flyers, T-shirts, maps, badges, custom hats with TIC or the logo of Braşov) totally lacking.

Other complaints of the “mystery customers” are related to the Centre schedule, which is apparently not respected as it is prescribed in the operating and display regulation. In three of the twenty cases, it happened that the tourists arrived there during the open hours, yet there was nobody left to offer them information.

Another reason of dissatisfaction was the insufficiency of printed material: maps, catalogues, guides, etc., felt among 10% of the cases, as well as the impossibility to purchase traditional items or souvenirs, noticed in 100% of the cases. Lack of Internet connection or of any other means of communication was also one of the drawbacks noticed by the participants.

It was also noticed a lack of staff interest in providing extra information (40% of the cases): the only info provided being the ones requested by tourists. This could be caused


by their wages that have quite low level, which does not train interest and active involvement of staff in providing quality services. Also, insufficient staff is another deficiency noticed in the research, only one employee working for TIC Braşov.

However, in terms of provided information, the staff was very prepared, both in terms of knowledge (referring to both tourism and linguistic accuracy) and management of communication. Regarding the staff friendliness, there has been noticed, in the majority of cases, a greater empathy towards foreign “tourists” compared to those from Romania.

In conclusion, TIC Braşov faces a number of issues that do not necessarily relate to poor quality of services, but rather the material endowment of the TIC and its reduced promotional activity.

4. Conclusions and proposals for

improving the activity of TIC Braşov

Conclusions and improvement proposals

of TIC Braşov’s activity were structured in several major directions: improving promoting techniques of TIC Braşov and increasing its visibility, improving TIC Braşov’s organising and functioning, diversifying activities, increasing the quality of the services offered by TIC Braşov, creating a database of tourists who use TIC Braşov services, and developing satisfaction assessment tools.

4.1. Improving the promotion

techniques used by TIC Braşov and increasing its visibility through

- Creating a website and an interactive

Facebook page to promote tourism in Braşov and adjacent areas of the city, which will contain useful information for tourists;

- Implementing a brand strategy by

creating an official logo and intensive promotion of it, both online and offline, by making customised products with TIC Braşov (T-shirts, mugs, maps and other information materials, caps, umbrellas with the logo and inscriptions of the city or region, scarves, worn by the TIC staff, or badges with the official logo etc.)

- Advertising on radio stations in Braşov county and also at national level;

- Outdoor advertising through outdoor billboards, signs and posters displayed in various locations in Braşov;

- Public Relations: press releases and interviews with the occasion of organising events, inviting the press and television when organising competitions, local or national events;

- Making and distribution of promotional and informative materials on various supports (print, CD, DVD, etc.);

- Printing of monographs, specialized materials, books, tourism information magazines, newspapers, etc.

- Organisation and management of events for promotional purpose, for Braşov area (festivals, tourist nights, etc.);

- Sales promotion: advertising at point of sale, making of brochures and leaflets distributed to other information centres and even travel agencies, bids, etc.;

- Use of direct marketing techniques by sending emails to various institutions, agencies, partners or loyal tourists, with travel offers updated seasonally. When organising events it can be transmitted via the Internet or post, tourism providers offers and schedule of events;

- Providing various facilities for tourists, such as tourists cards "Be.LIVE IT", offering free entry to museums, monasteries, events, discounts up to 50% for bus tours and also for those who want a guide in the city centre or regional level; discounts at restaurants, hotels, clubs, rental cars and bikes etc. There can also be implemented a system for those who want

A. ISPAS et al.: The Role of Information Centres in Promoting Tourist Destinations… 129

to travel by taxi in the city, so they can find coupons at TIC Braşov which they can use for that purpose.

4.2. Improving the organising and

functioning way of TIC Braşov:

- In order to provide optimal services for customers, the location of the TIC should be appropriate. Any means of information must include indications on the address and its positioning. One idea could be the placement of billboards, signs, city plans in strategic points in the city (train stations, public transport stations, at the entrances of the city, public institutions etc.) as well as the distribution of flyers and promotional materials in locations frequented by tourists (travel agencies, restaurants, near sights, etc.), and also using guerrilla marketing techniques (drawing/printing directions on asphalt) helping tourists to get a quick orientation;

- Moreover, a TIC should be well signposted, so that tourists will find it in the shortest time possible. In this way, a good use of billboards and banners placed on top of the Information Centre can help tourists get directions quickly and without problems;

- The functioning hours of the TIC should be as coating as possible, so it will be open all year round and most of the day, and outside the working hours it is advisable to use an Electronic Information Point, which will replace the TIC when it is closed. Visitors can get information about accommodation units in the county, as well as other services. The Electronic Information Point should be equipped with a telephone, where tourists can call for reservations at hotels, hostels or B&Bs;

4.3. Diversification of TIC Braşov

activities through:

- The TIC may also carry out income

generating activities (local excursions, rental guides, organizing manifestations and events, the sale of publications, making of travel offers designed for the entire year, etc.);

- Trade of products is another activity that any TIC should include. These products can be: information media, books, souvenirs, sale of tickets to events of any kind, city tours, trips and conferences and even a connection to the regional, national and even international reservation system, this being a good opportunity to improve offer of services;

- There can also be placed a mailbox in the centre, so that tourists do not have to go to the post office when they want to send a postcard;

- Selling travel tickets for public transport, tickets to cultural events (theatre, opera) and sport events, tickets for tours (guided tours, bus tours to Bran, Sinaia, Buşteni etc.);

- Developing tourist routes and city tours, with a guide or attendant (hiking, cycling tours, mountain biking, rock climbing, mountain climbing, caves, riding, visits to handicraft workshops, etc.), as well as providing guides for museums and other cultural sites;

- Offering travel guides, city maps, books, public transport timetables;

- Offering facilities such as free WiFi for tourists who visit TIC Braşov;

- Editing of tourist promotional materials of Braşov in Romanian, English and other languages (maps, county brochures, Presentation Booklet sites of Braşov area, brochures on topics such as sites, museums, churches, leaflets, maps).

4.4. Increasing the quality of the

services offered by TIC Braşov: a. Preparing the staff who works in the TIC Braşov by:

- Training in the quality of tourism


services, on issues of communication and behaviour towards visitors, complaints management;

- Perfecting or forming programs through seminars, workshops and exchange of experience in the country and abroad;

- Courses to perfect the staff knowledge concerning international languages they know. b. Creating a database of tourists who use the services of TIC Braşov by:

- Establishing databases which contain contact information of tourists and regular transmission of this information by electronic means (which is easy and inexpensive) to maintain relations with them. Also, this database can help to achieve local and national statistics, and transmission of tourist information to travel agencies operating in this area, useful in developing customised packages, knowing this way how to better focus on satisfaction of tourists’ needs;

- Submit monthly statistical reports and statements to network information centres in the county and to APDT. c. Developing of satisfaction assessment tools through:

- Studies concerning the tourist's satisfaction in order to identify their needs, the client's expectations and the best means of satisfaction;

- It would be advisable to introduce the concept of “complaint management" by creating a registry book of proposals and complaints;

- Conceiving forms/questionnaires that should be handed over to tourists, these representing a simple way of receiving complaints and proposals from tourists. These forms can be completed at the office or at tourist units and also attaching these forms to the site would represent a way of efficient communication.

These proposals, however, can not be implemented without allocating a marketing budget which can allow achieving all these goals and without employees motivated enough to do this.

References

1. Cismaru, L.: Strategii de securitate

în marketingul destinaţiei turistice (Security Strategies in tourism destination marketing). In: PhD Thesis, Transilvania University of Brasov (ed.), 2011, p. 123.

2. Cismaru, L.: Strategii de securitate în marketingul destinaţiei turistice (Security Strategies in tourism destination marketing). In: PhD Thesis, Transilvania University of Brasov (ed.), 2011, p. 126-127.

3. Constantin, C.: Cercetări de marketing: Curs pentru Învăţământ la Distanţă (Marketing Research: Distance Learning Course). Braşov. Editura Universităţii Transilvania, 2009-2010, p. 38.

4. Foster, D.: Measuring customer satisfaction in the tourism industry. Department of Hospitality, Tourism and Leisure, RMIT University, PO Box 2476V (ed.), Melbourne, Victoria, Australia, 2001, p. 42.

5. Rotaru, I.: Dezvoltarea destinaţiei turistice (The development of the tourist destination). Sibiu. Editura “Alma Mater”, 2009.

6. *** World Tourism Organization, Evaluating NTO Marketing Activities, 2003, p. 10-12.

7. *** World Tourism Organization, Survey of destination management organisations. Madrid, Spain, 2004, p. 8-10.

8. http://www.turistinfo.ro. Accessed: 09-04-2014.


POSSIBLE SCENARIOS OF ECOTOURISM

EVOLUTION IN THE REPUBLIC OF MOLDOVA FROM THE PERSPECTIVE

OF ECOSYSTEM SERVICES

Bogdan POPA1

Abstract: By using the Sector Scenario Approach, the present paper aims to fill an important gap of information regarding ecotourism activities connected with the management of protected areas in the Republic of Moldova. The paper captures the economic value of landscape as ecosystem service and assesses the development perspective of this sector by comparing “business as usual” and “sustainable ecosystem management” scenarios, giving also information regarding the effect of the ecotourism across the economy of the Republic of Moldova. Key words: eco-tourism, protected areas, ecosystem services, Moldova.

1Faculty of Silviculture and Forest Engineering, Transilvania University of Braşov.

1. Introduction The assessment of the possible

evolutions of natural resources utilization is of great interest for the reforming authorities in Chisinau, in all sectors of activity, including tourism, with its particular eco-tourism sub-sector. Ecotourism refers to a sub-section of the tourism sector, while the principles of sustainable tourism apply to all types of tourism activities [16].

Currently, the system of protected areas (PA) in Moldova covers 191,000 ha [20]. There are many protected areas, the natural reserves and the recently established National Orhei Park being among the biggest and most important. Four of the five biggest Scientific Reserves as well as Orhei National Park, are under the direct operational management of Moldsilva

Agency – the central authority in charge with forestry in Moldova [20].

The total number of tourists visiting PAs in the Republic of Moldova increased from 6266 in 2008 to 9020 in 2010 (based on the data recorded by PAs management units) [9], even if the total number of tourists (emphasizing mainly vacations, recreation and resting) decreased from 243906 in 2008 to 210809 in 2011 [9]. Therefore, tourists are increasingly appreciating places where natural resources are protected, but this is not yet the central interest to the majority of tourists [17].

Unfortunately, a number of constraints related to eco-tourism infrastructure and PA management can be noted [1], [5]: i) lack of PAs of a category that allows and encourages public visitation; ii) only a few


PAs or naturally attractive places have accommodation facilities; in many cases they are privately managed by entities which do not cooperate with PAs management units; iii) tourist access routes have been developed, but in general they are in a bad condition and insufficient; iv) promotion materials are missing through the main communication channels; v) biodiversity, a potential attraction for tourists from an educational point of view, is not very well studied; documents pointing out biodiversity features and restrictions are being published, but this process has just started and is seriously underfunded; vi) the unorganized tourism is significant, while the organizations that are involved in this activity do not have means or resources to optimize the rapport between promoting tourism in natural areas and the anthropic pressure that can have unwanted effects on biodiversity [5].

By assessing the economic value of the ecotourism sector for the economy of the Republic of Moldova, this paper aims to gather and present, in a manner familiar to decision makers, some arguments regarding the fact that biodiversity and

ecosystem services (ES) have a value in the tourism sector, trying to build support for the decision to finance the biodiversity conservation sector, directly linked with the attractiveness of the landscape and thus, the ecotourism.

2. Methodology

An important part of the data collection and interpretation related to this paper was done through the project GEF UNDP Project National Biodiversity Planning to Support the Implementation of the CBD 2011-2020 Strategic Plan in the Republic of Moldova, which financed the first attempt to evaluate the ecosystem services in the Republic of Moldova [15]. The study used the Sector Scenario Approach (SSA), a methodology already applied by projects in different countries [3], [4], and recently made available in a form of a guidebook [2]. The method relies on the comparison of business as usual (BAU) and sustainable ecosystem management (SEM) scenarios for different economic sectors in order to better present the value of the ES for different sectors.

BAU and SEM scenarios description Table 1

Indicators BAU SEM

Total visitor arrivals Increase 3%/year till 2025, than, no change [9]

Total visitors eco tourists

Increase in ecotourism, emphasis on total visitors arrivals (10%), then stagnant

Increase in ecotourism, emphasis on total visitors arrivals (up to 15% in 2036)

Average expenditures per visitor per visit (food & hotel)

No change over short-term, but decrease over longer term, as PAs stagnates

No change over short-term, but increases over longer term, as PAs improves

% eco tourists spending on food & hotels

No change over short-term, but decrease over longer term as PAs stagnates

No change over short-term, but increase over longer term as PAs improve

PA tourist consumer surplus per visitor

No change until 2016, after which decreases

No change, then increases by 1% and then 1.5% until 2025

B. POPA: Possible Scenarios of Ecotourism Evolutions in Republic of Moldova from … 133

The SSA methodology implies the development of the two scenarios by consultations among the main stakeholders of the tourism and biodiversity conservation sectors in the Republic of Moldova. After consulting the central authorities for tourism and environmental protection, the authors drafted the scenarios and presented them in a series of four workshops organised by the before mentioned project, gathering together representatives of the most important identified stakeholders for the ecotourism sector: the Ministry of Economy, the Registry of Tourism, Moldsilva Agency, the Ministry of Agriculture, the Ministry of Environment, representatives of tourism specialised companies, non-governmental organisations etc. The participants were asked to reach consensus on the indicators that are defining the scenarios and on the way they will vary in the next 25 years in both BAU and SEM scenarios. The final results of the consultations - the basic indicators description for the two scenarios are presented in Table 1.

BAU scenario is defined as a continuation of the disconnection between the increasing interest in eco-tourism and the quality of the ecotourism experience being offered at sites. In spite of the PAs remarkable natural resources, the lack of biodiversity studies makes it impossible to know and manage sensitive areas; damage to biodiversity through tourism may therefore occur and/or tourists may lose interest on account of the lack of biodiversity information. The absence of facilities for visitors also restricts the proper management and accounting of tourist flows. Poor access, visitor facilities, tour guides and management and low diversification will discourage / shorten the

duration of visits and willingness to pay (WTP). Poor marketing further works against tourists choosing Moldova as an eco-tourism destination. The absence of biodiversity conservation measures properly identified through PAs management planning may lead to ecosystem degradation, which will negatively affect tourism demand.

The SEM scenario reflects a situation in which the increasing interest in ecotourism is matched with measures that encourage and optimize its potential. With proper funding, the administrators of natural sites are able to develop and enforce PAs management plans (MPs). The MPs provide for the ongoing evaluation of biodiversity, development and diversification of access and visitor facilities, implementation of special conservation measures, pro-nature education and development of the tourism strategy and management. Under these conditions, it is reasonable to count on an increase in tourist numbers, longer visiting periods and increased expenditures and WTP. The SEM scenario also includes diversification of the functions of existing PAs to allow visitation and recreational use and the establishment of multi-functional areas that have tourism and recreation as specific objectives.

The SSA is funded on the total economic value concept that expends the ES value beyond the direct commercial value of the services, but also includes a wide range of non-market values [8], [10], [12], [13], [14], [19]. The study was done using the existing data collection and interpretation with limited primary data collection. International or National studies [6], [7], [11] were used to extract the necessary data, as well as national statistics [5], [9],


[15], [17]. The data interpretation also used some extrapolation of the data that were collected for other neighbourhood countries, by using the benefit transfer techniques [7], [12]. The method tried to eliminate the limitations of these techniques by taking conservative approaches, as well as by adjusting the transferred values (Central South and Eastern European countries) to the prices levels from Moldova by applying a consumer price index deflator and using an appropriate Gross Domestic Product (GDP) Purchasing Power Parity conversion rate.

The main elements for the calculation of the value of the ES for the tourism sector were: number of visitors, visitor’s expenditures, proportion of the eco-tourists, visitors WTP, PAs entry fees, taxes to the national budget.

3. Results and discussions

Based on the methodology described and then by using the above mentioned elements for calculation, we evaluated the baseline value first – the eco-tourism ES value for the year 2012. Moldsilva records the number of visitors of the PAs being managed by units under Moldsilva. The published data [9], [17] provides estimates

showing 9600 visitors in 2012. Even if for the other PAs there are no records on visitor numbers, it is reasonable to believe that the number of people visiting natural valuable sites (including PAs that are managed by subunits of Moldsilva) is higher than this. To account for this, the study makes a conservative estimate that there are as many tourists visiting natural areas as recorded. As a result, the figure used for estimating the number of eco-tourists is 19200 eco-tourism visitors in 2012.

Revenues for PA management units

2372

Revenues for the budget

734825

Untapped values 552960

Private sector 4635270

TOTAL 5905427

Fig. 2. Baseline value for the ecosystem services ($, in 2012) In 2012, PAs management generated

direct revenues of $4744 from PAs entry fees, half of them being accounted as eco tourists (the rest visiting only the PA visiting centres), but visitors also spent money for meals and accommodation. Data from the Registry of Tourism [9], [17] show that tourists spend $372.9 per

visit on the average, and the average number of nights per visit is 5.7 [9]. That would mean a daily expenditure of $56.1 /day. This does not take into account visitors from within Moldova. Due to the scarcity of data, this group is overlooked in the statistics [9]. The general impression is that a lot of people go for picnics and


excursions at weekends and public holidays [5], in Moldova many PAs and attractive landscapes being within easy reach of population centres. Expenditure for fuel, refreshments may be modest, but it can add up to a lot. Not taking these into consideration in the study is another argument for its conservative approach.

Studies performed in the region [6] calculate the average visitor expenditure on food and accommodation in PAs per visit at €135.5 per visitor per visit (2010 prices). The average duration of a visit was 5 days, suggesting a total daily expenditure per visitor of €27.1 [6]. In order to derive total expenditure estimates for the eco-tourism, the likely proportion of visitors camping and staying in hotels was taken into consideration. Based on the data collected through interviewing the PAs managers (Moldsilva) it is assumed that 75% of tourists in natural sites stay in hotels, guest houses or other accommodation facilities. Thus, direct spending on hotels may account for annual revenues of $4.6 million in 2012 (Fig. 1). In 2012 a study was carried out in PAs in Romania [4] to determine the economic value of recreation. The results showed an average consumer surplus per visitor of $60.7 in 2011 prices. However, if we use the appropriate CPI and PPP conversions and apply these broad figures to Moldova, a total consumer surplus of some $ 0.56 million a year results, including a willingness to contribute to conservation of $0.1 million.

The continuation of BAU results in an increase in tourism values over the short

term, followed by a progressive decline related to the degradation and loss of biodiversity and ecosystem services overtime and the subsequent fall in visitor numbers and their expenditures. The present value (PV) under BAU for the eco-tourism in the Republic of Moldova is $51.9 million. SEM results in a progressive increase in eco-tourism values, as both the quality of biodiversity and ecosystems and the tourism services offered improve. The increased number of visitors is the main determinant for the increase in PAs revenues. Although an increase in the value of tourism is sustained over the 25 years, the rate of growth slows as the ecosystem and biodiversity status is restored and as the natural sites carrying capacity is reached. Sustainable eco-tourism discourages an increase in tourists beyond the sites carrying capacity, visitor numbers therefore plateau in the long run. The PV (10% rate over 25 years) is calculated at $79.8 million level. Figure 2 illustrates the different trajectory for eco-tourism value under BAU and SEM for the Republic of Moldova, as PA authorities derive a small amount of revenue from entry fees. The private sector (represented by tour operators, hotels, guest houses, restaurants) is the main beneficiary. The state, by cashing the VAT and the income tax, is also among the important beneficiaries.

The total cumulative (additional) value (over 25) to the tourism sector as a result of moving to SEM from BAU is around $14.3 million (Figure 3).


Fig. 2. Comparison between the ecotourism ecosystem values in SEM and BAU scenarios ($) for a 25 years period

Fig. 3. Cumulated added ecosystem value for the tourism sector – SEM over BAU

The World Travel and Tourism Council

[18] presents the research regarding the economic impact for Moldova’s tourism sector, based on a methodology consistent with the one approved by the UN Statistics Division. This shows that around 50% of

visitor spending is on leisure travel. Assuming that these figures can be assigned on a pro rata basis to the estimated 19200 eco-tourists annually, then it is estimated that eco-tourism makes a total direct, indirect and induced


contribution to GDP of some €7.9 million in 2011. This includes gross visitor spending of more than €6 million, public expenditures of almost €2.4 million and capital investment in excess of €1.4 million, as well as some 1400 full-time job equivalents.

4. Conclusions

The value added by SEM to the ecotourism sector is a clear indication of the potential gains association with SEM, and the costs of BAU. SEM implies sustained and increasing tourism value supported by a well-managed Eco tourist activity based on biodiversity conservation and landscape, while a continuation of BAU results in the steady loss of tourism value as the capacity of natural sites to generate economically valuable services is eroded. These long-term losses outweigh the short-term gains.

The private sector is the key stakeholder to engage with in the development of any potential payments for ecosystem services mechanisms because this sector is actually making the biggest revenue as a consequence of the sustainable development of eco-tourism in PAs of the Republic of Moldova. The envisaged payment for the ecosystem services mechanism can impose a contribution of the economic agents in the sector to the Ecological Fund (managed by the Ministry of Environment Protection and spent on a project proposals base). The money that is collected this way may be directed to better manage PAs.

The proper development of ecotourism in the Republic in Moldova can help the sector to fully provide the social and economic benefits that include local jobs; stimulation of the local economy due to infrastructure and services development; improvement of intercultural relationships.

The results presented in the paper have their limitations as long as they are not based on comprehensive data collection and interpretation, and they imply a certain amount of assumptions and transfer techniques. Nevertheless, the conservative approach adopted for data interpretation supports the conclusion of the paper and qualifies the results as an initial step towards ES valuation for the ecotourism sector. The comparison between scenarios that are modelled in a conservative and participatory way is a better way [2] to help decision makers in the area of both biodiversity conservation and tourism sector regarding the need for fund allocation for sustainable management of PAs. Other approaches to value the ecosystem services are ecosystem centred and do not give sectoral values for the information recipients to understand the value of ecosystem services for their particular sector. At the same time, the results presented are a step on the way to design and apply payments for ecosystem services as a way to implement the concept of “internalization of ecosystems externalities”. 5. Acknowledgements

Thanks should go to the implementation

team of GEF/UNDP BD-EA National Biodiversity Planning to Support the implementation of the CBD 2011-2020 Strategic Plan in Republic of Moldova. This project financially supported this study. References 1. Alpizar, F., Bovarnick, A.: Targeted

Scenario Analysis: A new approach to capturing and presenting ecosystem services values for decision making. Washington. United Nations Development Programme (UNDP), 2013.


2. Bovarnick, A., Alpizar F., Schnell C.: The Importance of Biodiversity and Ecosystems in Economic Growth and Equity in Latin America and the Caribbean: An economic valuation of ecosystems. Washington. UNDP, 2010.

3. Bann, C., Popa, B.: An assessment of the Contribution of Ecosystems in Protected Areas to sector Growth and Human Well Being in Romania. Bucharest. UNDP, 2012.

4. Capatana, L.: Tourism, Commerce and Transportation – present status. Chisinau. UNDP, 2012.

5. Ceroni, M.: Ecosystem services and local economy in Maramures Mountains Natural Park, Romania. Bucharest. UNDP, 2007.

6. Emerton, L.: 2011. The Economic Value of PAs in Montenegro. Pristina. UNDP, 2011.

7. Philips, A.: Economic Values of Protected Areas: Guidelines for Protected Area Managers. World Commission on Protected Areas (WCPA). Gland. International Union for Conservation of Nature (IUCN), 1998.

8. Pagiola, S.: Republic of Croatia Coastal Forest Reconstruction and Protection Project: Annex J. Economic Analysis. Staff Appraisal. Washington DC. World Bank, 1996.

9. Pagiola, S., Von Ritter, K., Bishop, J.: Assessing the economic value of ecosystem conservation. Washington DC, The World Bank, 2004.

10. Ruzzier, M., Žujo, J., Marinšek, M. and S. Sosič.: Guidelines for economic evaluation of the natural assets of the PAs. South East Europe. Ljubljana. Institute of the Republic of Slovenia for Nature Conservation, 2010.

11. Zubarev, V., Appleton, M.: Financing Plan for State PAs Management Units. Chisinau. UNDP, 2012.

12. ADTM: Raport privind implementarea

strategiei de dezvoltare a turismului 2003-2012 (Report on the evaluation of implementation of Tourism Development Strategy 2003-2012). Chisinau. Association for Moldova Tourism Development, 2012.

13. EFTEC (Economics for the Environment Consultancy): Valuing Environmental Impacts: Practical Guidelines for the Use of Value Transfer in Policy and Project Appraisal. London. Department for Rural Affairs, 2009.

14. RT (Registry of Tourism): Raport anual privind turismul in Republica Moldova (Annual Report regarding tourism in Republic of Moldova). Chisinau. Registry of Tourism, 2012.

15. TEEB (The Economics for Ecosystems and Biodiversity). 2010. Mainstreaming the Economics of Nature: A synthesis of the approach, conclusions and recommendations of TEEB, Washington DC, The Economics of Ecosystems and Biodiversity Initiative

16. UNDP: The economic value of ecosystem services in Republic of Moldova. Chisinau. United Nations Development Programme, 2013.

17. UNEP (United Nations Environment Programme): Ecotourism and sustainability. In: Industry and environment, Vol. 24, Nr. 3-4, 2001.

18. WTTC (World Travel &Tourism Council): Travel and Tourism Impact 2013: Moldova. London. World Travel & Tourism Council, 2013.

19. *** Millennium ecosystem assessment. Ecosystems and Human Well-being. Washington DC. Island Press, 2005.

20. *** Strategia nationala si planul de actiuni pentru conservarea biodiversitatii (National Biodiversity Conservation Strategy and Action Plan). Chisinau. Ministry of Environment, 2013.

INTERNATIONAL BUSINESS


MOTIVATIONAL ISSUES RELATED TO THE BUSINESS FOREIGN LANGUAGE

CLASS IN HIGHER EDUCATION

Ioana-Paula ARMĂSAR1

Abstract: The present student-centred paradigm in education aims at developing the motivational dimension of the stakeholders within the educational process, i.e. the teacher and the student. Considering the dynamics of the system of needs in the present highly technologized consumer society, motivation allows the understanding of a series of psycho-social phenomena within which it establishes a functional cycle together with the activity and the conduct. It is worth considering the motivational and cognitive education of teachers who teach foreign languages to economics students, as well as the informative side of their training, because all their linguistic, cultural and pedagogical competences attend on economics students. The humanistic, cultural and ludic components of the foreign language class may constitute predominantly intrinsic motivation for economics students. The didactic strategy, the need for feedback, the inter-determination relationship between teacher and student, issues related to the organizational and social culture are solutions for decoding motivational issues. The final aim of the formative-motivational elements is represented by the preparation of individuals for self-learning and continuous learning throughout their entire life.

Key words: motivation, foreign language class, higher education, feedback, self-learning.

1 Department of Literature and Cultural Studies, Faculty of Letters, Transilvania University of Brasov.

1. Introduction

In Romania, there is no public or private educational institution which should not include the study of at least one foreign language in the curriculum, irrespective of the level considered. At least one foreign language is taught for a longer period, sometimes intensively or simultaneously with another one. In addition, foreign language assessment is part of the high school graduation exam, testing competences at B2 level. It is also worth

mentioning that many schools or high schools in Romania have complex bilingual programmes and that there are academic programmes of study which are taught in a foreign language. During the communist times, the main foreign languages taught in schools were Russian and German. At present, the curriculum includes many and diverse possibilities. According to the findings of the study “Key Data on Teaching Languages at School in Europe” conducted in 2008 under the coordination of EACEA (The


Education, Audiovisual and Culture Executive Agency within the European Commission), the most frequently taught foreign language in Romania is English (sometimes since kindergarten or starting with the 2nd grade). The second most popular foreign language is French, while the third is German, as the aforementioned study emphasizes. Italian and Spanish come next, but there can also be exceptions. As all changes at social level lead to a change in vision, major changes can be encountered in the education process as well. Today there is no problem in asking young people in Romania questions in English, while with more senior people, the chances to get an answer are higher if English is replaced by German or Russian.

The motivators which have an influence on the young generation as regards the study of a foreign language in higher education represent the object of research performed by numerous sociologists, psychologists, pedagogues and didacti-cians. Some of the significant issues in these studies will also be considered in what follows.

Student-centred education is a concept which has been encountered more and more often in the academic environment over the recent period. The paradigm of the “teacher as encyclopaedia” has long been surpassed. This is mostly due to the Internet, which facilitates access to a huge amount of information. For any topic considered, there are books, courses, video tutorials etc., which undoubtedly exceed someone’s storing capacity. At present people talk about the teacher-trainer, the teacher whose primary role would be to teach students how to learn, how to navigate in the information ocean, how to filter information, integrate and connect it, but especially how to put it into practice. Critical and creative thinking techniques become indispensable tools for acquiring

and producing knowledge. But the essential element in this equation is represented by the motivation of the two stakeholders, the teacher and the student. The pleasure which should underlie this learning process, this affective engine represented by motivation, is the key to the problem. Both for teachers and for students, managing motivation raises questions such as: Which are the factors influencing motivation?, Which is the determination relationship between teacher and student in the light of motivation?, What exactly in the teacher’s behaviour can motivate/ demotivate students?, Which aspects of the organizational culture can motivate/ demotivate the teacher? etc. Ideally, students and teachers should motivate themselves, the former assuming their own education, the latter loving their jobs and, most of all, not wasting energy on purely formal things, without any stake, as the tendency is at present, because of the bureaucratization of the system.

Didactic communication in teaching foreign languages to economics students in higher education supposes the adaptation of the massage and of the style both to the students’ vocabulary and mental structures, as well as to the peculiarity of the economic language, with a view to materializing the learning activity by means of a cognitive style, of a set of procedural and strategic elements, which students should use on their own. Teachers are not confined to providing information to students, as they are also preoccupied by their motivational and cognitive training through learning strategies. In the didactic learning setting, the efficient exchange of intelligible and persuasive messages supposes a conscious interaction between the educated subjects, who have different statuses and roles. Foreign language teachers, empathizing with the groups of students and creating an affective climate, offer all their linguistic, cultural and

I.P. ARMASAR: Motivational Issues related to the business Foreign Language Class in … 143

pedagogical competences to students, thus being animators, experts, creators of situations specific to daily life, generally speaking, and to the economic field in particular.

2. Motivation

A fundamental concept in psychology

and, generally, in sciences having at their core the human being, motivation expresses the fact that the basis of human behaviour is represented by an array of motives – needs, tendencies, emotions, interests, intentions, ideals – which support the accomplishment of certain actions, facts, attitudes. The motives mediate, require and maintain one behaviour or another. Motivation is continuously restructured and adjusted, in accordance with the psychical function it serves, comprising a wide range of physiological, psychological and socio-cultural variables. Taking them into account, motivation appears as an integrating and explicative factor for very diverse psycho-social phenomena - statuses and roles, aspirations and performances, interpersonal relations, for different group phenomena (cohesion, conformism, authority, influence, prestige etc.) [6].

Motivation, through the word motive (the impulse to act), is the extension of the Latin word movere, to move. Traditionally divided into two groups, inner motives (ambitions, needs, desires, interests, future projects) and external motives (requirements, pressures, family, teacher’s personality), motives give the energy necessary for work, learning, understanding etc. The concept of motivation represents the hypothetical construct used for describing the inner and/ or external drives which trigger the direction, intensity and persistence of the behaviour. Other definitions of motivation underline its relationship with action:

group of factors, impulses, desires which make people take a course of action. If motivation is considered a drive, any behaviour is motivated. This can be supported by conscious or unconscious mental processes and is manifest through signs such as: attention, which connects behaviour to will, effort, representing the energy devoted to accomplishing the objective, persistence, which indicates the intensity of the effort in a given time. Dörnyei [1] approaches motivation from a dynamic view, which is built while tasks are performed. According to the same author, there are three mechanisms which form the system of motivation: accomplishing the task according to an action plan (within the system of education, it is assigned by the teacher), the evaluation through the confirmation of the hopes seen in action (the results that students have), self-regulation in learning, i.e. decisions made with a view to accomplishing the task. Several motivational theories attempt at explaining the observation of behaviours in a coherent way. They approach this issue from different perspectives, exploiting and completing previously created concepts. Dörnyei [1] emphasizes three motivational theories which are important from the point of view of foreign language learning: the theory of self-determination, that of setting the purpose and that of attribution. The feeling of self-determination is kept as long as pressures have an inner character. Free will or the possibility to value one’s own competences contributes to strengthening the students’ inner motivation. For this purpose, evaluation should have an informational orientation rather than a controlling one. Thus, inner motivation will be strong when feedback is provided in an informational context, even if the feedback is negative. Conversely, in a controlling context, the same information can be perceived as an attack. The


students’ self-determination feeling and satisfaction are proportional with the emphasis put on this autonomy and the amount of informative feedback provided during the learning process. In actual fact, it seems that there is an interaction between the self-determination feeling and the sensation of competence [3]. The students’ involvement in the activities carried on during the foreign language class can be supported either through improvement, aimed at mastering a task, or through the identification with the task, which thus receives an attached value, but never through external regulation, which makes students feel obliged to act contrary to their will. The motivational theories based on specifying the aim emphasize the fact that students, who have in view a learning objective whose level of difficulty is estimated as low or high, tend to maintain or improve their strategy. In the attribution theory, Dörnyei [1] postulates that motives subjectively attributed to personal successes or failures make up the motivational disposition. One way to motivate students would be to assist them in attributing successes themselves, but also in making them responsible, so as to make them consider their failures as results of the insufficiency of their own efforts. Promoting the way towards performance by giving grades, the present educational system has inoculated students the mechanism through which they have preferred to attribute success to their ability rather than to their efforts. As students, they need to be supported to succeed in making this difference. According to [3], when performance is envisaged, effort is inversely proportional with the perceived competence. Thus, being awarded a good grade, obtained with maximum effort, brings about the decrease in the perceived competence. With respect to competence, the author reaches the following conclusion: the students’ best

strategy consists in valorizing the absence of learning. But this cannot be an educational ideal in any way. Due to neurobiological research, motivation and emotion can be connected, as they are both related to action. Motivation would have the role to include them, because it encompasses the cognitive factors. It should not be forgotten that cerebral activity is not limited to devising strategies for reaching a goal. Neuronal mechanisms, linked to emotional moods, need significant energy in order for the realities that disturb the aim envisaged to be processed and thus reconsidered in an optimist key, or in order for the unpleasant information to have a slowed effect. It can be therefore concluded that emotions underlie motivation.

In the case of education, the issue of motivation is raised in connection with the meaning and motive attributed by stakeholders (teacher and students) to each one’s role. Depending on the way the social effort to learn in valued (the way in which academic education is regarded, understood and practised) and to the social context, the learner’s motivation is accomplished. With respect to the economic higher education, an essential motive for performance, and, subsidiarily, for mastering a foreign language, is represented by professional insertion in the specialty field chosen. If the highest form of motivation is inner motivation, then students need to be sure that, by learning, their success will bear fruit and that they will be well assimilated in society. In other words, a strong inner motivation synthesizes the subject’s need for activity, his/ her positive social valorization and the awareness of the social importance of the activity performed. Taking into account this dynamics of the system of needs, motivation allows the understanding of a series of highly significant psycho-social phenomena from the practical point of


view, such as: choosing one’s profession, work integration, the individual’s social and professional progress. There is a functional cycle between motivation, activity and conduct, which, for the aforementioned cases, would comprise: choosing one’s profession according to the strongest unsatisfied need in that context; following the profession chosen; satisfying the initial need which, progressively, ceases to motivate the individual; the occurrence of new needs, which are either created as the profession is performed, or, having a prior existence, are now brought up-to-date. The process is a continuous one, ending with the individuals’ becoming more and more closely connected to his/ her profession; but there is also the possibility for them to stagnate or regress motivationally, which triggers opposite effects: dissatisfaction, weak integration, propensity for abandonment.

Economics students’ motivation to learn a foreign language can be divided into two main categories: integrative and instrumental. The former refers to the students’ desire to be bilingual, the latter, given an unprecedented opening of the European labour market, refers to the utilitarian side: work place, salary, social status. The teachers’ didactic experiences have proven that there is a visible correlation between students’ motivation for learning and their preoccupation for the specialty training, to which linguistic competences are added, which are a corollary, the significant interest in studying and perfecting the foreign language in the curriculum. Students surpass the status of “captive” pupil, obliged to learn a foreign language. They go from an extrinsic motivation, based on the desire to acquire knowledge in order to get better marks, to an intrinsic motivation (the desire to learn consciously, the joy and pleasure to learn from others and together with others). In this respect, the self-

assessment tests of the learning activity may prove relevant. The fact that economics students are given the possibility to choose between studying a foreign language at A1 level or developing language skills acquired in high school (starting from B2 level) and specializing in language for business contributes to their motivation, to the attraction, necessity and satisfaction that the foreign language class can create. Furthermore, the humanistic, cultural and ludic components of the foreign language class may be predominantly connected to intrinsic motivation, even if it is about economics students, not philology ones. The activities for studying the specialized language of the field can be organized in a non-conformist manner, with visual and audio elements prevailing, from exercises of the type “crosswords”, to authentic musical, advertising or cinematographic documents. An essential extra element for strengthening the students’ motivational and creative side can be given by the drawing up, application and interpretation of questionnaires, semi-structured interviews addressed to students by the teacher. Permanently checking the “pulse” of the class by considering how students react can bring about both the change of the methods and their improvement, as well as the teacher’s degree of satisfaction.

3. The didactic strategy and the

teacher’s role

An external element, tightly connected to motivation is represented by the teacher’s didactic strategy. As a unifying, integrating term, reuniting learning assignments with learning situations, representing a complex and coherent system of means, methods, materials and other educational resources, didactic strategy aims at reaching precise objectives. Since strategy is necessary to any pedagogical process, the teacher’s


importance is also emphasized in the light of the fact that the design and organization of the class is accomplished in accordance with the teacher’s strategic decision, his/ her competences and motivation. Thus, the strategy foreshadows the most appropriate, logical and efficient methodical path for approaching a concrete teaching and learning situation. The didactic strategy is an important component for developing the motivation for learning a foreign language in higher education. Aiming at optimizing education, it depends on the teacher’s pedagogical view, the educational objectives, the teaching content and the type of learning which is necessary, the teacher’s teaching style, the psycho-social features of the learning group, the ergonomics of the educational space and even on the horizon of the teaching time [4]. Even though related to methods or to didactic methodology, strategy is not to be confused with them, because they focus on a teaching-learning-evaluation activity, whereas strategy gives emphasis to the educational process, on the whole, and not just to a segment within education. From this perspective, the main components of the didactic strategy (the four systems: of the organization and progress forms of the educational activity, of the didactic methods and processes, of the resources used and of the operational objectives, as well as of the building of a strategy appropriate for students’ interests and their preparation level) represent a continuous challenge and a permanent effort of didactic creativity on the side of the teacher. The evolution of society dictates the teacher’s permanent preoccupation for improving the didactic methodology, simultaneously complying with didactic principles. Individualization and differentiation, activization and conscious participation/ involvement in learning (which needs to become self-learning) are criteria which cannot be eluded. These

actions aim at: stimulating and cultivating interest for knowledge, the learners’ purposeful use of their intelligence (and also the use of the other psychical functions involved in learning), through their own efforts, the development and practice of the capacity to acquire knowledge, the development and practice of the abilities of self-orientation in practical cases, the cultivation of the inquiring spirit. The re-evaluation of “traditional” methods, which are criticized for the students’ passive role in the teaching-learning process, is a direction of the new trend, resuming especially the discussion on expository methods. There are a few procedures which could enhance the modernization of expositions, regardless of the subject taught, but with emphasis on foreign languages: the use of applications, scaffolding the topic in the realities of the time or in the economic field studied, relying on the teacher’s personal research, notifying students of the plans and objectives envisaged from the beginning, problematization, the use of drama, taking stands, drawing up questionnaires, expressing value judgements, exemplifying by means of modern media, of the computer, expositions and debates etc. In addition, another solution would be to resort to various questions (convergent, divergent, evaluation, problem and rhetorical questions etc.), as well as to valuing the students’ personal experience, the permanent use of feedback modalities or of reversed conversations or in groups. The use of active-participative strategies characterizes a superior level in the spiral of modernizing didactic strategies for foreign language teaching in the case of non-philology students. The active-participative methods comprise all the situations which turn the students involved into active subjects, co-participants in their own education.


Cognitive psychology has highlighted the importance of the mechanisms for the intellectual processing of the information received (considering their formative and educational capabilities), which supposes an active involvement of the structures of the intellect. In addition to the meaningful use of the students’ intellectual capacities, the teacher should not forget each one’s capacity to feel excited, try to touch their heart strings or captivate the entire group. The Romanian system of education also has to face its predominantly theoretical side, with a tendency towards information overload. In the field of foreign language teaching, theory must represent the background for performing language. Furthermore, with reference to the particular case we considered, the effort of foreign language teachers should be directed towards the students’ interest in and motivation for studying economic sciences, with a view to having an optimum preparation for integrating in social life. Computer-assisted learning does not ensure the entire replacement of the two main stakeholders of the educational process (including open and distance learning, and the teaching-learning process offered by educational software). The acquisition of a new method and technique of intellectual work would represent a direction towards the modernization of the didactic strategies that the foreign language teacher should consider, with important formative implications, focusing on the individual’s preparation for self-learning and continuous education in life.

From a European perspective, the foreign language class benefits from the theoretical support of the documents devised by the Council of Europe, the Common European Framework of Reference for Languages and the European Language Portfolio [5]. These two documents are inseparable from the pedagogical point of view, perfectly

completing one another: the former addresses teachers, curricula designers and trainers, while the latter is a work and self-evaluation tool for language users. The general aim of the CEFR is to offer a common European basis for describing learning objectives, contents and methods for second language learning, so as to facilitate international cooperation and international recognition of degrees. Romania has assimilated the objectives of the European language policy, introducing references to CEFR in official documents. The progressive integration of the sources offered by CEFR and ELP into the didactic practices supposes a constant emphasis put on communicative tasks by teachers. The “plurilinguistic” and “pluricultural” competence referred to in CEFR represents the linguistic communication and cultural interaction competence of a social actor who masters one or several foreign languages to different degrees, implicitly having experience of several cultures. All this supposes a re-consideration of the foreign language teachers’ status, role and responsibilities, as well as of their pedagogical activities. 4. Conclusion

In the light of the aforementioned facts,

it is imperiously necessary that the new paradigm from the educational environment be situated under the sign of motivation-centred education. Although at present the model of social success has hardly to do with education, and the teachers’ status in society has lost glamour (the times of the teachers’ central position in the Romanian village are far behind, just like the teachers’ importance in city life during the inter-war period), it is necessary to have new approaches and actions for an education in which quality should be synonymous with the capacity to improve, to enrich, to train, to prepare the


generations to come for the world and for life. The new technologies and the alert development rhythm of any field should not place the deeply human cultural and affective side second (it is here that foreign languages could fructify their multiple motivational possibilities). Following the principle of mirror manipulation, foreign language teachers can turn into real models for their students, irrespective of the programme of study they are enrolled in, by complying with some of the seven dimensions of motivation that Dörnyei introduces [2]: the affective-integrative dimension (the interest and pleasure to learn a foreign language), the dimension linked to the macro-context (multicultural, ethno-linguistic relations), rapport with close people (parents, teachers, mates or colleagues), but also the dimension connected to raising self-awareness (personality features, expectations, the need to succeed etc.). At any educational level, regardless of the subject taught and of the students, the teachers’ extrinsic motivation should be definitely accompanied by their vocation to be teachers, their psycho-pedagogical education, their capacity to transfer information quantitatively and qualitatively, to educate, to be a model, to open the world. The family role in the motivational dimension to learn is

paramount, and society should provide for its future by interconnecting generations not only through information transfer, but also emotionally and affectively (not to mention the genetic contribution). In most cases, not only the transfer is essential, but also the provision of the password. References

1. Dörnyei, Z.: Attitudes, Orientations, and Motivations in Language Learning: Advances in Theory, Research, and Applications. In: Language Teaching 2003, vol. 53, Issue S1, p. 3 – 32.

2. Dörnyei, Z.: Motivation in second and foreign language learning. In: Language Teaching 1998 vol. 31, Issue 3, p. 117 – 135.

3. Fenouillet, F.: Motivation, mémoire et pédagogie. Paris. L'Harmattan, 2003.

4. Ionescu, M.: Demersuri creative în predare şi învăţare (Creative steps in teaching and learning). Cluj Napoca. Presa Universitară, 2000.

5. *** Cadre Européen Commun de Référence pour les langues – apprendre, enseigner, évaluer, Conseil de l’Europe, 1998, 2000.

6. www.wikipedia.ro Accessed: 12.04.2014.


ROMANIA’S COMPETITIVE

ADVANTAGES ON THE GLOBAL OUTSOURCING MARKET

D. BOŞCOR1 C. BĂLTESCU1

Abstract: The paper applies a conceptual approach combined with analyses of statistics and secondary material and presents advantages and risks of outsourcing, the most important competitive advantages of Asian countries and Romania’s position on the global outsourcing market. The conclusions of the research highlight the strategies that should be used in Romania for sustaining and improving the competitive advantages. Strategies proposed are linked to higher investments in education, infrastructure, a better use of tax incentives and a national strategy for attracting investors. Key words: outsourcing, incentives, advantages.


1. Introduction Outsourcing is an allocation of specific

business processes to an external specialist service provider. Cost reduction reasons drive companies to outsource some activities of the value chain. When companies use an external supplier to provide them services as human resources functions, IT services, customer services, accounting and technical support they use the business process outsourcing. Business process outsourcing includes back office activities as payroll and billing and front-office activities as marketing and technical support [1]. In order to achieve a sustainable competitive advantage companies should not rely only on product innovation but also on low-cost manufacturing and suppliers’ capabilities to develop new products. The policy of product standardization allows cost reductions and the policy of products

adaptation can satisfy the customers’ needs but has a negative impact on costs. Therefore, companies should try to find a balance between these two policies, using in the same time the advantages of producing some components in the firm and the advantages of outsourcing.

Intrafirm sourcing is the purchase of components or products from the parents or their foreign subsidiaries on an “intrafirm” basis and outsourcing is the purchase of products from independent suppliers on a “contractual basis”. Many companies buy products and components from their subsidiaries in foreign countries but the new trends are to gradually switch to independent foreign suppliers [3].

The US multinationals have used the strategy of exploiting competitive advantages of suppliers by introducing on the markets innovations made by suppliers.


2. Objectives, materials and methods The objective of the research is the

identification of Romania’s competitive advantages on global outsourcing market and the ways of improving these advantages. A research based on secondary data was used.

The most important findings of the research show that outsourcing destinations for US multinationals are India, China, Singapore, Vietnam, Mexico and the most important advantages are low-cost labour, natural resources, government incentives, tax policies.

In order to reduce the risk of dependence on independent suppliers and the risk of losing expertise in new technologies, the best strategy for multinational companies is to create strategic partnerships by using joint ventures, subcontracting and licensing. Some valuable assets should be kept in-house because their loss might be an advantage of the competitors [4]. One of the most important advantages of outsourcing is cost reduction due to lower costs of labour for the foreign supplier and specialization. The investments in fixed assets are lower because part of the production is outsourced. If the relationship with the supplier is built on long term, costs might be reduced due to suppliers’ experience.

Another important advantage of outsourcing is flexibility because companies can change suppliers when market conditions change. This is also a risk for the supplier because he might lose his orders and he might be in the position to look for another partner.

A risk of outsourcing activities is linked to lower than expected cost savings because of the lack of skilled labor and differences in cultures. Factors from the economic environment as currency fluctuations, tariffs and other trade barriers, high inflation rates and high transportation costs might negatively affect outsourcing.

Bureaucracy, corruption and a weak protection of the intellectual property are also considered risks of global sourcing.

If the focal company transfers a lot of knowledge to the foreign supplier, the risk for the supplier to become a competitor is very high, that is why activities as research and development, marketing and branding are very important for the company and should be concentrated at home.

The risk of dependency on the external service provider can be reduced by using several providers, but in this situation it will be more difficult to achieve cost savings and to coordinate all the contracts.

The loss of control on the service provider might have a negative impact on quality, that is way the proper selection of the supplier and the contract concluded are very important.

The loss of confidentiality risk and the potential risk of data privacy issues and information security can be reduced by using special provisions and penalties in the contract.

Advances in telecommunications and new technologies have been a key driver of outsourcing. In the field of services, the outsourcing strategies had a strong influence on the firms’ market performance. British banks trying to use several call centres from India for managing the relationship with the customers received many complaints from the British customers because of the language misunderstandings with the Indian employees. Some of these banks were forced to give up outsourcing and to move back those activities in England. The move was highly advertised in order to maintain the customers’ satisfaction. The understanding and evaluation of the quality are very important for the client when selecting a supplier [5].

For a prestigious company to offer high quality services it is necessary to know and understand clients’ demand before services

D. BOŞCOR et al: Romania’s Competitive Advantages on the Global Outsourcing Market 151

delivery, as well as their reaction after the delivery. [6] Training of the staff for improving the skills is very important in the delivery of supplementary services, which are more outsourced than the core services.

The following criteria for selecting service suppliers in different countries are used by companies: reliability and performance of the supplier, quality control ability, reputation and experience and costs with salaries and training programs. Factors from economic, political, cultural and legal environments are also important.

Firms should focus on core services and outsource supplementary services using strategic partnerships with suppliers in order to control better the quality of services provided.

3. Results and discussions AT Kearney’s Global services Location

Index analyzes and ranks the top 50 countries as the best destinations for providing outsourcing services. The score obtained by each country is composed of a weighted combination of relative scores on 39 measurements, grouped in three categories: financial attractiveness (compensation costs, infrastructure costs, tax and regulatory costs), people and skills availability (labor force availability, education, language, worker attrition rates, business-process experience and skills) and business environment (political and economic environment, physical infrastructure, cultural adaptability and security of intellectual property).

Table 1

Source: AT Kearney’s Global Services Location Index


The top ten positions are dominated by Asian countries like India, China, Malaysia, Indonesia, Thailand, Vietnam and Philippines [7].

The most important advantages of India are: low salaries for highly skilled employees, friendly government policies, infrastructure investment [8].

In the field of tax concessions entrepreneurs building infrastructure facilities benefit from a full five year tax exemption. A full tax exemption is granted to industrial units established in Free trade Zones, in Electronic Hardware Technology Park or Software Technology Park and for 100% Export Oriented Units. All profits derived from export of computer software are deductible in computing taxable income. Exporters of goods or merchandise are also allowed 100 percent deduction in respect of profits derived from export trade in computing the taxable income. There are many other tax exemptions for New Industrial Projects in under-developed areas, for Power Generating Sector and deduction of expenditures for Scientific Research [11]. A research conducted on the European outsourcing market revealed that in Finland, Spain and the UK, the highest percentage of outsourcing is used in IT services, such as

application development and payroll services [10].

Automotive companies in Europe have outsourced 42% of their IT services. Services such as sales and procurement remain among the least outsourced.

Among the services outsourced by companies can be mentioned: legal services, facilities management, payroll services, logistics, call centre and customer support and design and engineering.

The reduction of costs and efficiency improvements were the most important reasons for using the first generation of outsourcing contracts. Efficiency improvements, access to specific knowledge, quality improvements and standardization of services were the most important targets of the second generation outsourcing contracts. 4. Romania’s advantages on global

outsourcing market In order to assess the advantages of

Romania in outsourcing we can use an adaptation of the index of outsourcing services attractiveness developed by neoIT in table 2.

Outsourcing service attractiveness index Table 2

1. Financial advantages Labour costs and other costs for doing business

Tax incentives 2 Quality of services offered Suppliers’ experience and expertise Data security and protection Confidentiality 3 Human resources Foreign language skills Flexibility Education and work ethics 4 Infrastructure IT and commercial infrastructure General infrastructure 5 Macroeconomic environment Government incentives Political risk Cultural compatibility Level of corruption and bureaucracy Source: adapted from www.neoit.com

D. BOŞCOR et al: Romania’s Competitive Advantages on the Global Outsourcing Market 153

More than 100 universities in Romania offer qualified engineers, having also very good language skills. The high productivity and creativity of Romanian specialists are important advantages on the world outsourcing market. The cost of labour in the IT sector is low and the quality of work is very good, staff being creative and motivated [9].

The strong multilingual skills of the employees in the IT sector are important advantages, the English fluency rate being more than 80 percent, French and German languages being widely spoken.

The average time to start a new business in Romania is 10 days, a shorter period than the regional average.

The number of certified specialists places Romania on the first place in Europe and 6th in the world, having more than 30000 engineer graduates annually, of which 8000 are trained in Information and Communication Technology. There are more than 64000 specialists in the IT sector.

The service providers from Romania combine high technical proficiency with very good communication skills and flexibility.

Many international companies like Siemens, Microsoft, Oracle, Intel and Amazon have invested in Romania, focusing on high value technologies and not only on low costs.

Business culture in Romania is very close to Western Europe and America and the advantage of distance is obvious for companies coming from Western Europe.

Regarding taxes, specialists in the IT field have been exempted from salary tax since 2001 in order to reduce the brain drain in the field.

Companies do not have to pay taxes on buildings and land within industrial parks and the dividends reinvested for creating new jobs are exempted from taxes [12].

Another important tax incentive is linked to accelerated depreciation of equipments,

machinery and computers used in R&D activity.

In comparison, in Vietnam, import taxes for IT products were kept low and several incentives for It companies were introduced. Businesses from software production and services, local and foreign investments have been exempted from the tax on profits for 4 years. Software products have a zero VAT. The creation of a software company is much easier than the creation of companies in the advertising field, the latter being considered more sensitive to the socio-political climate. The government has promoted the development of a modern software park, opened in March 2001, having more than 10000 programmers. Another source of capital and trust is the Vietnamese diaspora, having more than 1 million people working in US, many of them in the IT industries. 5. Conclusions

The most important advantages of

Romania on the world outsourcing market are the well developed IT infrastructure and the quality of labour. The applications developed by Romanian programmers are more flexible and the delivery times are shorter.

The good knowledge of foreign languages leads to a closer relationship with Western Europe from the cultural point of view and represents a key advantage in comparison with India, China and Russia.

Funds allocated by the government to education and research should be increased in order to have a strong educational system that supply engineers, scientists and knowledge workers. Romania’s advantage of high quality labor could be maintained on long term with a strong educational system.

The Romanian government should also try to collaborate with foreign companies investing in Romania to finance different


educational programs and to create different training programs.

Regarding the economic and fiscal policies, the government should use them to attract more foreign investors and part of the models implemented by India, China and Vietnam could be successfully implemented in Romania.

One of the most important disadvantages of Romania on the outsourcing market is related to infrastructure, which is underdeveloped in comparison with other European markets. Romania should create a national infrastructure development program, using also European funds to develop its infrastructure.

Romania should adopt a national strategy for attracting investors by offering them more fiscal incentives and should try to solve the problems linked to bureaucracy and corruption.

On the level of service suppliers, the culture of high integrity, ethics and disciplines should be improved in order to combine cost advantages with quality and service effectiveness.

Shared Service Centers and Business Process Outsourcing providers in Romania are expanding their offers of innovative and high quality services from IT and finance to legal services, real estate management, knowledge management and marketing intelligence.

Romania is considered an ideal near-shore location for captive companies- owned by the foreign providers and for independent suppliers and a mix of a stable business environment, government incentives and financial advantages will improve its position on the world outsourcing market.

References

1. Cavusgil, T., Knight, G., et al.: International Business. Pearson Prentice Hall, 2012, p.488-509.

2. Hoch, D, Kwiecinski, M., et al: The overlooked potential for outsourcing in Eastern Europe. In: Emerging trends, threats and opportunities in international marketing, Cavusgil, T., Czinkota, M., et al. (eds.). Business Expert Press, New York 2009, p.295-301.

3. Kotabe, M., Murray, J.: Global sourcing strategy and sustainable competitive advantage. In: Emerging trends, threats and opportunities in international marketing, Cavusgil, T., Czinkota, M., et al. (eds.). Business Expert Press, New York, 2009, p. 199-219.

4. Kotabe, M., Murray, J.: Outsourcing service activities. In: Emerging trends, threats and opportunities in international marketing, Cavusgil, T., Czinkota, M., et al. (eds.). Business Expert Press, New York, 2009, p. 241-253.

5. Madar, A., Neacşu, N. A.: Service quality analysis – Hotel Alpin (Poiana Brasov). In: Annals of the “Constantin Brâncuşi” University of Târgu Jiu, Economy Series, Issue 6/2013, p.95.

6. Neacşu, N.A., Madar, A.: The quality of hotel services. In: International Economic Conference of Sibiu, 17-18 May 2013, Sibiu, Romania, p.594.

7. www.atkearney.com. Accessed: 15.03.2014.

8. www.business.gov.in. Accessed: 10.03.2014 .

9. www.computerweekly.com Accessed: 20.03.2014.

10. www.ey.com/gbs. Accessed: 15.03.2014 11. www.indianembassy.it. Accessed:

10.04.2014. 12. www.kpmg.com. Accessed: 10.04.2014.


CEREALS PRODUCTION INFLUENCE

OVER THE TRADE BALANCE IN ROMANIA AND IN THE

EUROPEAN UNION

Sanda CONSTANTIN1

Abstract: The paper presents the evolution of two indicators, cereals production and trade balance in Romania and in the European Union. The evolution was analyzed during eleven years from 2002 to 2012.Statistical methods have been used in order to establish the real and correct evolution of the indicators during the analyzed period. The paper also tries to demonstrate if there is any correlation between the indicators, using also statistical methods of analysis. There was applied a regression and correlation method, linear function. The results show that for Romania there is a direct correlation but a weak one. For the European Union the model shows that is a inverse proportion correlations. Key words: cereals production, trade balance, correlation.


1. Introduction The crops structure in Romania, and

particularly the vegetable production, is dominated by the cereals production. Agriculture surfaces of these crops represents 66% of the entire cultivated surface, each year [3].

Two of those, wheat and corn, traditional crops for the Romanian agriculture, have a significant proportion, namely 57% of the entire cultivated surface and 85% of the cultivated surface with cereals (in year 2010) [5].

As a result, the way in which the Romanian agriculture turns from the traditional economy to the market economy can be appreciated through the way in which that production of these crops is turned into food, particularly

through the dynamics of the wheat and corn quantities which are consumed from the producer.

Turning the cereals into food on the market is very important for the economy development and modernization.

2. The cereals production in Romania

and in the European Union In Romania, the evolution of the

cereals production during the analyzed period 2002 – 2012 and the statistical analysis for this evolution is presented in Table 1 [2].

From the statistical analysis we can observe that, as regards the cereals production in Romania there was no continuous increase or decrease, the values fluctuated more or less from year to year.


In year 2003 the cereals production decreased with 1391,7 thousands of tones,

meaning by 9, 67% as compared to the previous year 2002.

Cereals production in Romania-(thousands of tones) Table 1

year Cereals production

∆t/0 ∆t/t-1 It/0 [%]

It/t-1 [%]

Rt/0 [%]

Rt/t-1 [%]

2002 14355.9 2003 12964,2 -1391,7 -1391,7 90,30 90,30 -9,70 -9,70 2004 24398,0 10042,1 11433,8 169,95 188,20 69.95 88,2 2005 19331,2 4975,3 -5066,8 134,66 79,23 34,66 -20,77 2006 15740,9 1385,0 -3590,3 109,65 81,43 9,65 -18,57 2007 7788,6 -6567,3 -7952,3 54,25 49,48 -45,75 -50,52 2008 16777,5 2421,6 8988,9 116,87 215,41 16,87 115,41 2009 14800,5 444,6 -1977 103,10 88,22 3,10 -11,78 2010 16651,3 2295,4 1850,8 115,99 112,50 12,5 12,50 2011 20776,9 6421,0- 4125,6 144,73 124,78 24,78 24,78 2012 12773,3 -1582,6 -8003,6 88,98 61,48 -11,02 -38,52

In the next year 2004 we can observe an

increase with 10042,1 thousands tones, which mean by 69,95% more than in the same year 2002

In the following years there was a constant increase in cereals production, until in 2007.

In this year the production decreased with 65,67 thousands tones, meaning by 45,74%, comparison with the based year 2002

In the next four years the production of cereals increased again, the highest level being in 2008 with a production of 16777,5 thousands tones, by 2421,6 thousands tones more than in year 2002, meaning an increase by 16,87%.

The increase continues until in the last year in our study, 2012 when the production decreased by 1582,6 thousands tones, by 11, 02% less than in 2002.

If we compare each year with the previous year the evolution of the cereals production in Romania fluctuated during the analyzed period.

The highest production was in year 2004, namely 24398 thousands tones, by 11433,8 thousands tones more than in the previous year 2003 (88,20%).

Between years 2005 – 2007 we can observe that the cereals production decreased every year as compared to the previous year.

Thus in 2005 the production decreased by 5066,8 thousands tones, meaning by 20,77% less than in 2004, in 2006 by 3590,3 thousands tones less than in 2005, meaning a decrease by 18,57%. The most important decrease was in year 2007, when the cereals production was by 7952,3 thousands tones smaller than in the previous year 2006 which means by 50,52% less.

In the last year 2012 the cereals production decreased as compared to the previous year 2011 by 8003,6 thousands tones, meaning by 38,52% Mathematically speaking, on average, the cereals production of Romania, that of 16032,57 thousands tones, but, because of the fact that the values are so different and because the cereals production in Romania fluctuated a lot during the analyzed period the calculation of average indicators is not relevant.

The evolution of the cereals production in Romania is presented in Figure 1:

S. CONSTANTIN: Cereals Production Influence over the Trade Balance in Romania …

157

0

5000

10000

15000

20000

25000

30000

'2002 '2003 '2004 '2005 '2006 '2007 '2008 '2009 '2010 '2011 '2012years

1000

tone

s

cereals production

Fig. 1. Cereals production evolution in Romania.

From the graphic we may notice an

increase tendency of the cereals production in Romania from 2003 until 2004, then a sudden decrease until 2007. After Romania became a member of the European Union the cereals production of the country

increased until 2011. After that in 2012 the cereals production was almost near the production obtained in 2003. In the European Union the cereals production during the same period 2002 – 2012 was as in Table 2 [2].

Cereals production in European Union-(thousands tones) Table2

year Cereals production

∆t/0 ∆t/t-1 It/0 [%]

It/t-1 [%]

Rt/0 [%]

Rt/t-1 [%]

2002 211645,2 2003 187164,2 -24481 -24481 88,43 88,43 -11,57 -11,57 2004 289911,1 78265,9 102746,9 136,98 154,90 36,98 54,90 2005 259352,1 47706,9 -30559,0 122,54 89,46 22,54 -10,54 2006 245191,2 33546,0 -14160,9 115,85 94,54 15,85 -5,46 2007 258902,1 47256,9 13710,9 122,33 105,59 22,33 5,59 2008 314227,2 102582,0 55325,1 148,47 121,37 48,47 21,37 2009 294719,5 83074,3 -19507,7 139,25 93,79 39,25 -6,21 2010 277373,2 65728,0 -17346,3 131,06 94,11 31,06 -5,89 2011 288731,4 77086,2 11358,2 136,42 104,09 36,42 4,09 2012 278762,9 67117,7 -9968,5 131,71 96,55 31,71 -3,45 At the European Union level we can

observe that the evolution of the cereals production is not similar with the evolution of the same indicator in Romania. During the analyzed period there were not significant differences between years. Taking into consideration the comparison with the firs year 2002 we can observe that

the cereals production decreased only in 2003, by 24481 thousands tones, meaning by 11,57%. On average, each year, cereals production in the European Union situated at a level of 264180,01 thousands tones.

The cereals production evolution in the European Union is presented in Figure 2:


0

50000

100000

150000

200000

250000

300000

350000

'2002 '2004 '2006 '2008 '2010 '2012years

1000

tone

s

cereals production

Fig. 2. Cereals production evolution in the European Union.

From the graphic we observe an increase

tendency of the cereals production in the European Union starting with small fluctuations during the entire period without sudden increases or decreases. The largest quantity of cereals at the European Union level was produced in year 2008, reaching almost 320000 thousands tones.

3. The trade balance evolution in Romania and in the European Union

In Romania, statistical analysis of trade

balance during the same period 2002 – 2012 shows us the following results presented in Table 3 [4].

Trade balance in Romania-(million euros) Table 3

year Trade balance

∆t/0 ∆t/t-1 It/0 [%]

It/t-1 [%]

Rt/0 [%]

Rt/t-1 [%]

2002 -2042 2003 -2700 -658 -658 132.22 132,22 32,22 32,22 2004 -3187 -1145 -487 156,07 118,04 56,07 18,04 2005 -4915 -2873 -1728 240,70 154,22 140,70 54,22 2006 -7647 -5605 -2732 374,49 155,58 274,49 55,58 2007 -15314 -13272 -7667 749,95 200,26 649,95 100,26 2008 -16069 -14027 -755 786,92 104,93 686,92 4,93 2009 -6867 -4825 9202 336,29 42,73 236,29 -57,27 2010 -6963 -4921 -96 340,99 101,40 240,99 1,40 2011 -7789 -5747 -826 381,44 111,86 281,44 11,86 2012 -8561 -6519 -772 419,25 109,91 319,25 9,91

In the analyzed period Romania

registered adverse trade balance in each year from 2002 to 2012. Still from, 2008 start to recover the loss with a little increase but remaining adverse trade

balance [5]. The average situated at almost -7460 million euros. The evolution of trade balance in Romania during 2002 – 2012 is presented in Figure 3:

S. CONSTANTIN: Cereals Production Influence over the Trade Balance in Romania …

159

-18000

-16000

-14000

-12000

-10000

-8000

-6000

-4000

-2000

0'2002 '2004 '2006 '2008 '2010 '2012

years

mil.

euro

trade balance

Fig. 3. Trade balance evolution in Romania.

From the graphic we observe that during

the entire period Romania registered an adverse trade balance and registered the lowest level in year 2008. After Romania adhered to the European Union the situation started to improve even if

imports are still higher than exports. In the European Union, during the same

period the statistical analyze of trade balance reveals the following situation presented in Table 4.

Trade balance in the European Union-(million euros) Table 4

year Trade balance

∆t/0 ∆t/t-1 It/0 [%]

It/t-1 [%]

Rt/0 [%]

Rt/t-1 [%]

2002 95806 2003 90366 -5440 -5440 94,32 94,32 -5,68 -6,68 2004 76564 -19242 -13802 79,92 84,73 -20,08 -15,27 2005 69984 -25822 -6580 73,05 91,41 -26,95 -8,59 2006 77923 -17883 7939 81,33 111,34 -18,67 11,34 2007 63487 -32319 -14436 66,27 81,47 -33,73 -18,53 2008 73006 -22800 9519 76,20 114,99 -23,80 14,99 2009 64965 -30841 -8041 67,81 88,99 -32,19 -11,01 2010 70643 -25163 5678 73,74 108,74 -26,26 8,74 2011 66210 -29596 -4433 69,11 93,72 -30,89 -6,28 2012 71378 -24428 5168 74,50 107,80 -25,50 7,80

From the previous table we can observe

that at the European Union level the trade balance was positive during the entire period. Also, we can see that the values are not so different from one year to another.

On average the trade balance at the European Union level is situated around 7575 million euros. In evolution, the trade balance of the European Union is presented in Figure 4:


0

20000

40000

60000

80000

100000

120000

'2002 '2004 '2006 '2008 '2010 '2012years

mil.

euro

trade balance

Fig. 4. Trade balance evolution in the European Union.

From the graphic we observe that during

the entire period in the European Union registered a positive trade balance with a small decreasing tendency and almost linear

The highest value was registered in year 2002 and the lowest in 2007.

4. Correlation

The purpose of the paper was also to

demonstrate if there is any correlation between the analyzed indicators, cereals production and trade balance, in Romania as well as in the European Union.

For that a statistical model of regression and correlation particularly linear function, was used.

For Romania the regression shows that there is a direct or positive link between analyzed indicators. The Pearson correlation coefficient has a value of 0,39 meaning that between the indicators there is a direct but weak correlation.

In that case, cereals production influences the trade balance in proportion of 15%, the rest of 85% being the influence of other factors.

For the European Union the situation is different. The Pearson correlation coefficient has a value of -0,76, meaning an indirect or negative correlation.

That means that cereals production influenced in a negative way trade balance in proportion of 58%, the rest of 42% being the influence of other factors.

References 1. Lupşa-Tătaru, D.A.: Dezvoltarea

regională industrială a României în contextul integrării în UE (Romania's industrial regional development in the context of EU integration). In: RECENT 2007 Vol. 8, no. 2 (20), July, 2007. Available on: http://www.recentonline.ro/020/Lupsa-R20.pdf.

2. http://ec.europa.eu/eurostat. Accessed: 16-04-2014

3. http://www.cnp.ro/user/repository/piata_productiei_de_cereale.pdf. Accessed: 01-04-2014.

4. www.insse.ro. Accessed: 15-04-2014. 5. www.piataagricola.eu. Accessed: 2-04-

2014.


EFFECTIVENESS OF TRAINING AND

DEVELOPMENT ON EMPLOYEES’ PERFORMANCE AND ORGANISATION COMPETITIVENESS IN THE NIGERIAN

BANKING INDUSTRY

H. O. FALOLA1 A. O. OSIBANJO1 S. I. OJO1

Abstract: Training and development is indispensable strategic tool for enhancing employee performance and organizations keep increasing training budget on yearly basis with believe that it will earn them competitive edge. The main objective of this study is to examine the effectiveness of training and development on employees’ performance and organisation competitive advantage in the Nigerian banking industry. Descriptive research method was adopted for this study using two hundred and twenty three valid questionnaires which were completed by selected banks in Lagos State, South-West Nigeria using simple random sampling technique. The data collected were carefully analyzed using descriptive statistics to represent the raw data in a meaningful manner. The results show that strong relationship exists between training and development, employees’ performance and competitive advantage. Summary of the findings indicates that there is strong relationship between the tested dependent variable and independent construct. However, bank management should not relent in their quest to train their staff to develop new ideas that will keep improving and retaining employee performance. Key words: training, development, performance, competitiveness.

1Department of Business Management, School of Business, Covenant University, Ota, Nigeria.

1. Introduction

The survival of any organization in the competitive society lies in its ability to train its human resource to be creative, innovative, inventive who will invariably enhance performance and increase competitive advantage [17], [31], [46]. Training and development is an aspect of human resource practices that help in enhancing employees’ skills, knowledge,

and competence capable of improving employees’ ability to perform more efficiently [39]. Training and development play a vital role in the effectiveness of an organisation [21]. It is one of the most pervasive techniques for improving employees’ performance enhancing organisation productivity in the work place [22]. Employees are the indispensable asset and key element of gaining competitive advantage of any organization


and training is essential tool for its actualization [23]. The level of competency, skills and ability of the workforces of an organization influences its ability to preserve its obtained positions gain competitive advantage [3, 23]. Meanwhile, employees competence, skills and pro-activeness is directly proportional to the level at which organization can compete with others. Organizations are confronting with increased competition resulting from changes in technology, economic environments, globalization etc. [18]. As it could be inferred from above that not much research has been conducted on the relationship between all of these constructs. In this regard, this study aimed to contribute to the existing knowledge particularly in the sphere of capacity development. It is to this end that this paper seeks to critically examine the effectiveness of training and development on employees’ performance and organisation competitiveness. The significance of this work stemmed from its objectives as follows: (i) Examine how on the job training and development affect employees performance; (ii) Analyze the effectiveness of cognitive training methods on employees’ proficiency; (iii) Evaluate the impact of behavioural training techniques on employees productivity; and (iv) Analyze the benefits of training methods on organizational performance. 1.2. The Significance of the Study

Training becomes inevitable the moment

an organization realizes the need for improvement and expansion in the job. But often times, organizations embark on job enlargement and enrichment to promote employees' morale, motivation and satisfaction when in the fact the real problem with work performance lies in

capacity development. The study becomes necessary because many organizations in this contemporary world are striving to gain competitive edge and there is no way this can be achieved without increasing employees' competencies, capabilities, skills etc through adequate training designs. However, the study results will help the management to identify the challenges effects of employees’ training on organizational performance, hence determine the areas where improvements through training can be done. It will also help the management in planning for the development and implementation of ef-fective and efficient training needs that will lead to increased performance of the banks. 2. Literature Review 2.1. Training and Development

Training and development are

indispensable strategic tools for effective individual and organisation performance, thus, organisation are spending money on it with confidence that it will earn them a competitive advantage in the world of business [31], [17], [48], [7] However, for any organisation to achieve its stated goals and objective in this competitive world, adequate and relevance training and development of staff cannot be over emphasized. Organisation are expected to identify training need of its employees and design training programmes that will help to optimally utilize their workforce towards actualization of organisation objective [27]. Training and development is a techniques use to transfer to the employees relevant skills, knowledge and competence to improve employees performance on current jobs and future assignment [26], [35], [41]. It is not negotiable for organisations to adequately train their employees for efficient and

H. O. FALOLA et al.: Effectiveness of Training and Development on Employees’ ... 163

optimal performance toward the realization of their set goals and objectives [4]. Employees’ training and development is a strategic determination to facilitate learning of the job related knowledge, skills, ability and behavior that are crucial for efficient performance capable of enhancing organizational effectiveness [38]. Training is requisite to enhancing workers capability, reasoning faculty and competence [31] which will improve organizational performance [8] and as well help in gaining competitive edge [3]. Training and development increases employees’ efficiencies, innovation, invention, capacity to accept new technologies and techniques [35]. It is important to note that organizations must be able to identify the needs for training and development and select techniques suitable for these needs, plan how to implement them and thereafter evaluate outcome [33]. 2.2. Related Theories of Employee

Training and Development

There have been various theories propounded to explain the relevance of training needs in any establishment of organization. In social learning theory, employees acquire new skills and knowledge by observing other members of staff whom they have confidence in and as well believe to be credible and more knowledgeable [10], [34]. The theory posited that training and learning is influenced by persons self-efficacy and his ability to successfully learn new skills which can be influenced by encouragement, oral persuasion, logical confirmation, observation of others [28]. Reinforcement theory believed that training is a strategic tool to make job interesting to the workers and as the avenue for the employees to improve themselves for optimal performance which can culminating to promoting employees

for outstanding performance, innovation, creativity as a result of training attended [2]. The resource-based view (RBV) of the firm advocated that an organisation can gain competitive advantage by attracting and retaining competent human resources and as well identify relevant training for them that will keep improving their capacity for optimal performance. By implications, the effectiveness of training and learning depends on the pattern of the job related knowledge, skills, capability, competencies and behavior that are important for greater performance which invariably be capable of influencing organizational success. Hypotheses: training and development Training techniques are classified into behavioral or On-the-job (orientations, job instruction training, apprenticeships, internships and assistantships, job rotation and coaching) and cognitive or Off-the-job (Lectures, computer-based training, games and simulations etc. [36] These tend to influence employees’ performance and organizational competitiveness; therefore we propose: H1: Behavioral training techniques have no significant effect on employee performance and organizational effectiveness; H2: There is negative impact of cognitive training techniques on employees’ optimal performance. 2.3. Research Model

This study will give attention to the effectiveness of training and development on Employees’ Performance and organizational competitiveness in some selected banks in Lagos. However as obtained in the literature reviewed above, we proposed the following model depicted in figure 1.


Fig. 1. Proposed Study Model 3. Research Methodology

The empirical data for the study were

collected through a well-structured questionnaire, which was prepared and distributed among the members of staff in selected banks in Lagos State, South-West Nigeria. The reason for the choice of location for the study is because it plays host to the headquarters of most of the banks. Effectiveness of training and development was measured using a 16-item instrument which was divided into Sections A and B. Section A consisted of 6 items which was used to gatherer bio data information from the respondents such as their age, sex, marital status, education background, position, working experience; Section B consisted of 10 items regarding the constructs of the subject matter. Five-point Likert scale (5-Strongly Agreed, 4- Agree, 3-Undecided, 2-Strongly Disagree, 1-Disagree) that best describes the extent to which the respondents agree with each items in the questionnaire was used. Descriptive methods of analysis were used to analyze the data. A total of 250 copies of questionnaires were administered within the scope of selected location, having sorted the returned questionnaires, only 223 copies of questionnaires representing 89.2% were validly used while 27 copies

(10.8%) were either discarded due to improper filling or unreturned. The study tends to add to the existing study on Human Resource issues and organizational competitive advantage. 4. Result & Discussion

The demographic characteristics of the

respondents indicate that 117(52.5%) of the sample size was male while 106(47.5%) were female, which implies that the population of male respondent is higher than female. Meanwhile, 177(79.4%) (Cumulative) of the respondents were within an economically active population. Moreover, 103(46.3%) of the respondents were married, while 117(52.5%) were single and 5(2%) were either divorced or separated, though the reason for their present marital status could not be ascertained as at the time of documenting this report. Regarding the years of work experience; 97(43.5%) of the respondents had worked between 1 and 9 years; while 88(39.5%) have put in between 10-19 years; 38(17%) have spent 20 years and above. Hypotheses Testing

The skewness and kurtosis are of primary important because they are


indicative of extent to which variables are not normally distributed. Kline, 1998 posited that skewness above 3.0 and kurtosis above 10 indicates serious departures from normality in a distribution. With this criterion, none of the variables posed any problem of normality. However, from Table 1, induction and orientation is effective in equipping employees with the practice and core value of the organisation and what is expected of them to do (Mean = 4.2197). In addition, most of the respondents agreed that

mentoring plays a significant role in training employees for better performance (Mean = 4.1166). Meanwhile it was also discovered that Coaching is a strategic methods of getting the best out of the employees (Mean of= 3.9148). While Apprentice and Job rotation enhance employee performance (Mean = 4.1883, 3.9686) respectively. Therefore, it would be concluded that behavioral training techniques have significant effect on employee performance and organizational effectiveness.

Further to Table 2, majority of the respondents were of the opinion that professional; training improves employees skills and competencies (Mean = 4.3139).

In addition, most of the respondents believe that the computer based training is the most effective off-the-job training techniques to train employees to gain competitive advantage. (Mean = 4.5785).

Table 2Descriptive statistics of respondents on effectiveness of cognitive training techniques

N Mean Std. Deviation Skewness Kurtosis Statistic Statistic Statistic Statistic Std. Error Statistic Std. Error Professional Course/Training 223 4.3139 .83835 -1.248 .163 1.107 .324

Lecture 223 3.7399 1.17196 -.548 .163 -.967 .324 Role Playing 223 3.8206 1.07976 -.742 .163 -.234 .324 Computer Based Training 223 4.5785 .61650 -1.641 .163 3.634 .324

Game and Simulation 223 3.9552 1.13414 -.884 .163 -.312 .324

Valid N (listwise) 223

Table 1 Descriptive statistics of respondents on effectiveness of behavioral training techniques

N Mean Std. Deviation Skewness Kurtosis Statistic Statistic Statistic Statistic Std. Error Statistic Std. Error Induction and Orientation 223 4.2197 .81161 -1.545 .163 3.720 .324

Mentoring 223 4.1166 .92748 -.918 .163 .346 .324 Coaching 223 3.9148 .92848 -.715 .163 .083 .324 Apprentice 223 4.1883 .82770 -.845 .163 .418 .324 Job Rotation 223 3.9686 1.06285 -1.005 .163 .398 .324 Valid N (listwise) 223


However, it was also discovered that Lecture, role playing and game and simulation can also wilding the employees reasoning and be innovative (Mean = 3.7399, 3.8206 and 3.9552 respectively). Therefore, it would be concluded that cognitive training techniques have significant effect on employees’ optimal performance and creativity.

The results in table 3 indicate that both behavioral and cognitive training techniques enhances employees’ capacity (Mean=4.4170) enrich employees efficacy (Mean= 4.4619) promote innovation and creativity for competitive advantage (Mean = 4.3857) and it developed employees skills and knowledge for optimal performance (Mean = 4.4350).

Managerial Implications In the modern and complex business

environment, employee training and development is one of the reliable source of competitive advantage to compete with the changing and competitive business world. Training and development is beneficial to employees in particular and the organisation in general. This research work will help organization to understand the importance of training and development. It will also help organization to understand which factors are important to keep in mind during the training and how a good training can be

delivered to their employees. It will help them to understand that it is very necessary for them to give training to their employees so that they could perform the assign task in a better way. Above all, it becomes imperative to state that without training, there will be no development. Therefore, for every organization to survive, training must be seen by management as "a means to an end". 5. Conclusion/Recommendations

Training is importation for the survival of any organisation. It is also imperative for effective performance of employees, enhancement of employees’ ability to

Table 3Descriptive statistics of respondents on Impact of behavioral and cognitive training

techniques on effectiveness

N Mean Std. Deviation Skewness Kurtosis Statistic Statistic Statistic Statistic Std.

Error Statistic Std.

Error Enhance Employee capacity 223 4.4170 .78331 -1.906 .163 5.249 .324

Enrich Employees' Efficiency 223 4.4619 .72107 -1.684 .163 4.316 .324

Promote Innovation and creativity for Competitive Advantage

223 4.3857 .77933 -1.486 .163 2.900 .324

Develop Employees' Skills and Knowledge 223 4.4350 .67386 -.964 .163 .494 .324

Improves organisation performance 223 4.1211 1.06908 -1.248 .163 .959 .324

Valid N (listwise) 223


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THE EUROPEAN WELFARE MODEL. IS ROMANIA A WELFARE STATE?!

Ioana POP-RADU1

Abstract: The paper presents the various interpretations of the social model and welfare regime concepts. In order to observe Romania’s position within the European welfare regimes, the paper presents a short analysis of the main characteristics of the welfare regimes identified in Europe – i.e. the corporatist welfare regime, the liberal welfare regime and the social democratic/Scandinavian welfare system. We analyze the dynamics of several indicators relevant for establishing the performance of the Romanian welfare regime. Using the results of this study, the current research might offer a new approach on proving that Romania’s case is a particular one among the CEE countries and its sustainability could become a model for other countries. Key words: welfare regime, growth rate, tax burden, social cohesion.

1 PhD. Candidate in Finance, Doctoral School of Babes Bolyai University of Cluj-Napoca, Faculty of

Economic Sciences and Business Administration, Cluj-Napoca, Romania.

1. The conceptualization of Social Model and Welfare State Model

The literature on this topic is consistently

and rather controversial. Academic analyses have theorised and compared these concepts beginning with 1950’s when Titmuss distinguishes tax-funded welfare based on citizens social rights based on the social insurance contributions of the employees.

As Marshall T.H. pointed out that the 18th century was when civil rights became established as the legitimate goal of social reform, the 19th century has legitimated the political rights and the 20th century recognized the social rights. Nowadays, Standing G. (2001) appreciates and predicts that the 21st century will consolidate the economic rights in order to

sustain long-term development of an economy [8].

The relatively close connection between economic development and the level of social security have imposed the usage of the both two concepts: “social state” and “welfare state”. Even if the terms are generally synonymous, Heise A. and Lierse H. (2011) identify several asymmetries. Therefore, they propose to use the term “welfare state” only when state intervention involves not just a social adjustment or social protection but broader social and economic policy change in order to increase societal welfare. Respectively, the “social state” is reserved for the states that adopt and apply social protection against the five basic life risks – old age, illness, unemployment, accident and poverty. In


consequence, by contrast, the welfare state concept is more comprehensive and requires more instruments than the ones of social policy – i.e. economic policy, social cohesion and environmental protection which defines the “magic triangle” of a sustainable welfare development that has been subscribed to the European social strategy (Lisbon, Stockholm and Nice) [3].

Complementary, Tulai C. & Serbu S. (2005), Bunescu L.M.& Verez J.C. (2011), Dobrota G. (2011), Heise A. & Liese H. (2011), Sirovatka T., Greve B, Hora O. (2011) and Bernaciak M. (2012) address that the welfare regime is being defined by three interconnected dimensions, in order to promote a sustainable development of the states: economic dimension, social dimension and fiscal dimension [1], [2], [5], [10].

Concerning the welfare systems of the Central and Eastern European countries, there exist some common characteristics among the countries. Sengoku M. (2004, 2009) identifies that one of the initial common characteristics of welfare reform in the CEE countries was the neglect of social policy. The main common characteristics of these reforms at this time can be summarized as follows [7]:

a) Withdrawal of the state of the (public) welfare sector: various kinds of subsidies on many goods and services have been abolished or suspended; some privatization and marketization of health and social-care services are introduced; and activities of the “third sector” such as the voluntary sector and nongovernmental organizations are encouraged.

b) Introduction of an institutionally pluralized welfare system: social security funds are separated from the state budget; pension funds are separated from health care insurance; social security is

implemented by a number of independent institutions; and the power and responsibilities of the regional and local governments have been enlarged.

In addition, Whiteside N. (2010) sustains that the growth of the global economy has had a series of impacts on welfare developments worldwide, which are partly based on ideological shifts; partly they are the consequences of changes in institutional structures and responsibilities as countries have opened up their trade, economies and political institutions to new and powerful forces. And as a consequence, the welfare states have changed their assumptions about the role of the state towards the well-being of its citizens (and towards those who are not citizens but inward migrants or looking for asylum).

Whiteside N. (2010) explains that welfare states have expanded and became consolidated after the Second World War being promoted by several treaties that have started define the EU common social policy, namely [12]:

a. The Treaty of Rome (1957) had no stipulations concerning European welfare. Yet it has been left under the powers of member states in order to converge to a single market which has required the creation of equal or equivalent labor market conditions to secure fair competition.

b. Maastricht Treaty and the Treaty of Amsterdam have set strictly conditions and direct concerns with social policy in order to assure the labor right, promoting equality for all the EU citizens and to use the social dialogue to create equivalent labor market conditions for all.

c. Post-Maastricht commitment to European Monetary Union (EMU) strengthened the need to regulate state social protection.

d. Lisbon 2000 Act. The restructuring

I. POP-RADU: The European Welfare Model. Is Romania a Welfare State?! 173

of welfare has fostered a major reappraisal of social dependency, reinforcing the promotion of National Action Plans for employment at Lisbon, Amsterdam and Nice (1998-2000) and the creation of the EU’s social agenda (i.e. European Employment Strategy (abr. EES)).

Today, the EU social agenda is maintained towards ECOFIN – the main committee sustaining the Council of Ministers of Finance, having attributions on following the Growth and Stability Pact which constrains the objectives and the strategy of EU member states in social policy terms. As a consequence, over the social policy the Commission now sets the main paths of development in terms of public expenditure. For example, ‘good’ expenditure, on education, health and retraining, is viewed positively; contrarily, ‘bad’ expenditure, on welfare benefits that sustain social dependency (notably pensions and unemployment benefits), is sanctioned and pressure put on member states to reform their systems accordingly. Also, much attention has been paid to the promotion of more ‘flexible’ labor markets, to make European economies more responsive to the labor requirements of enterprise in the post-industrial age.

2. The European Welfare Model

The academic literature presents several

models of the European welfare regimes beginning with the Espring-Andersen in 1990. According to Espring approach on welfare systems conceptualization, the European welfare states can be classified and analyzed in terms of their regime characteristics. Therefore, Espring-Andersen established a triple typology of welfare state regimes in Europe.

The three world of welfare is covered by the the Nordic welfare model, the Continental or Conservative model and the Liberal (Anglo-Saxon) welfare model [7].

Other studies have identified distinctive models for Greek welfare system – Symeonidou, 1997; Italian welfare system –Trifiletti, 1998; Spain and welfare system – Guillen, 1997; Flaquer, 2000; Guillen & Alvarez, 2001, all defining the Mediterranean welfare model.

As a result of the fall of the communist block and the process of its integration, a new type of welfare model was born, i.e. the case of the states in Central and Eastern Europe. Focusing particularly on the case of Central and Eastern Countries, authors like Ferge Z. (2001), Stiropoulous D.A., Neamtu I. & Stoyanova M.(2003), Sengoku M. (2004), Standing G. (2004), Fenger H.J.M. (2007), Cook J.L.(2010), Tache I. & Neesham C.(2011), Adascalitei D. (2012), Tache I. & Dumitrache V.(2012) and others, have identified the importance of welfare development in the post-communist states in order to change the welfare state status.

Recent papers alike Tache & Neesham’s (2011) brings key data available on the socio-economic performance of Romania and Bulgaria, with a view to acquiring an integrated understanding of the impact of diverse economic and political factors on the state of welfare provision in these countries [9].

In order to obtain an insight into the distinctive characteristics of the European Union groups, Heinisch Reinhard, Professor of Political Science at University of Pittsburg from Johnstown, distinguishes the following main characteristics of the welfare regimes (Table 1.):


.

Source: Heinisch R., 2007, (available online at http://www.pitt.edu/~heinisch/concept.html)

Main characteristics of the welfare regimes in Europe Table 1

Model Definitory aspects Advantages Disadvantages Corporatist Welfare State, conservative type

• conservative, strong states • weak, liberal tradition • status conscious, middle and artisan class • strong presence of the Catholic Church • the case of Austria, Belgium, Germany, Greece, Italy, Malta, Cyprus, Turkey, the Netherlands, Spain and Portugal

• enjoys high level of public support • allows benefit

recipients to maintain their level of income • allows for private

service system without rationing (e.g., in health care) • benefits increase

as contributions increase • intermediate tax

burden

• maintains and reenforces social cleavages • sensitive to

employment conditions and demographics • drives up labor

cost (payroll taxes) and low wage unemployment (in/out groups) • tends to penalize

those in unstable, non-traditional or part-time job situations • often provides

few benefits for those outside the insurance model (new poverty)

Liberal Welfare Regime, Anglo-Saxon type

• politically powerful middle/commercial class • liberal/anti-state political tradition • dominant position of the market • immigrant society or society with high potential to advance socially • weak state • Protestant tradition • The case of Switzerland, the United Kingdom and Ireland

• least sensitive to demographic changes in the population • low taxes • differentiated

services • stimulates job

growth, especially in low-skills sector

• high inequality, great social cleavages (two class society) • low level

services for poor people • welfare state is

politically unpopular and not sustainable • negative stigma

attached to benefit recipient

Scandinavian Welfare Regime, Social-democratic type, Nordic Model

• Protestant, liberal tradition with great regard for individualism and equality • cooperation between

working and peasant class • dominant role of leftist

parties in politics • the case of Denmark,

Norway, Iceland, Finland and Sweden

• universality encourages support of population • high benefits,

differentiated services • employment effects

(services) • reduces social

cleavages

• very complex to administer • expensive and

bureaucratic • high tax burden • strong government

orientation • pressure on budget

because of high cost


3. Is Romania a welfare model? To analyze the position of Romania in

Espring-Andersen’s typology of welfare states, we choose to present the most appropriate indicators that allow grouping countries with similar characteristics (i.e. the Eastern welfare model countries).

The most striking differences stem from a more relaxed economic development over the last few years. This is reflected in the levels of economic growth [9]. Correspondingly, Hiese A. & Lierse H. (2011) asses that with an average growth rate of 6.7% Romania seemed to develop a regional model for growth and prosperity (Figure 1). They explain that Romania’s role model status came under strain with the onset of the global economic crisis (domestic demand fell by 13.7%, exports by 10.1% and capital inflows fell by 20%, as a result of which unemployment rose to 7.8% at the end of 2009. Therefore, the revenue reduction and the increasing

spending have deepened the budget deficit well over the Stability and Growth Pact criterion. In order to prevent insolvency, the granted loan from IMF (May 2009) has imposed an extensive package of measures to rein in fiscal policy and external imbalances. As a result, the government austerity plan was based mainly on social cuts (wage cuts of 25% for the public sector, cuts in all social transfers of 15% and increasing VAT from 19 to 24 per cent in July 2010), which have been cutting back the welfare in Romania [5].

On the other hand, we might consider that the withdrawal of the Romanian state from social policy responsibilities with social cuts in the social state have been a radical solution in order to increase other taxes and incentives that would have retreated the private investments and demand and respectively to cut the country’s welfare.

Fig. 1. Romania’s position among European Welfare Models by economic growth rate, 2000-2012

Source: Pop-Radu I. & Ulici-Ciupac M.L. (2014)


The comparison of Eastern Model with the EU average of the economic growth rate provides the following evidence on Romanian welfare model:

a) Romania’s case is particularly within the Eastern Model since the growth rate in Romania is above the EU average during most of the time, except year 2005, 2009 and 2010, being slightly above countries like Poland, Estonia, Lithuania, Latvia and Hungary [6]. Although the development plan in Romania was hampered by the 1990’s transformations, Romania experienced an enormous upturn of 12% per year between 2004 and 2007. Moreover, its accession into the EU in 2007 appeared to boost the economy despite the economic crisis.

b) In contrast to other EU member states, the fiscal pressure in Romania is among the lowest [4], only Lithuania, Latvia and Bulgaria are even below the average rate of the Eastern model fiscal pressure [10]. Even if the fiscal pressure is low, these countries experience a tax burden proper to undeveloped or still emerging economies.

c) Romania stands out from the Eastern Welfare states since the unemployment rate closely follows the Continental Welfare model, both evidencing lower rates than the average of the EU unemployment rate.

d) In terms of public debt and budget deficit dynamics during 2000-2012, Romania is evidencing that has complied the convergence and economic stability EU regulatory.

All in all, we might observe that Romania’s economic and social policy is slightly oriented towards Western welfare states [6] which provide for freedom of employment, minimum wages, paid holidays and unemployment benefit, as well as health care and pensions. But in the reality, in order to correspond to modern welfare state conditions, the situation is different. As a fact, EU statistics confirm

these findings, Romania’s situation experiencing a different real situation where the social security spending is comparatively low and the income inequalities are extremely high.

In addition, there are other facts that affect the Romania’s welfare status and which become new challenges in order to sustain the economy’s development:

• the income distribution is unequal accented toward the European context and does not tend to the reduction despite the economic growth. Even in the years of strong economic growth, which the Romanian economy experienced before the outbreak of the crisis, income inequality did not change. Therefore, this income inequality affects the social cohesion. For example, Romania stands among the European countries with the lowest minimum wage in the EU, way below the European average. For example, in 2011, the minimum wages in Romania were amounted at 157,2 EUR/month, being ten times smaller than the one in Luxemburg, at 1/7 than the minimum wage in France, at 1/5 from Greece’s or Spain’s average or ½ of the Hungary’s data. Only Bulgaria presents a lower rate than Romania, with 122, 71 EUR/month [2].

• the poverty still has high values despite the economic growth, being highly elastic to the GDP changes. The poverty risk is highly registered in several social groups alike: rural residents, peasants, unemployed people, roman people and persons without education or low education. The disparities among rural and urban medium are still large.

• education becomes a key issue in order to assure a sustainable economy, since a highly educated human capital is developing the culture and the quality of life.

• the ageing process is accelerated by a decreasing demography (defined by a decreased rate of fertility and a high rate of elderly people in the total population and the population migration) – all with negative


consequences for the population reduction. As a fact, Romania has become a source country for the European immigrants.

• the population migration arises other issues derived from the scale of gap in labor costs and incomes, combined with the flexible labor market regimes. As a consequence, this situation leads is leading to social dumping spreading which spurs a wave of company relocations from west to east. First, we can expect that this might serve as a magnet for foreign direct investments, but this sustains the current wage standard (i.e. lower than the European minimum wage). Secondly, in the context of EU enlargement, the influx of migrant workers from the poorer accession states may vary substantially from east to western countries for new benefits. In addition, political and social actors in the “old” EU member states feared that the influx of Eastern Europeans might have a negative impact on their welfare systems. Bernaciak M. (2012) argues that an excess of inflow in the Western population would represent a heavy financial burden and could the domestic population’s access to social services [1]. Moreover, the Easterners started to be considered the ones that have introduced “unfair competition and social dumping to old EU member states labor markets”.

Today, a core issue in Romania and in almost of the CESEE countries is the allegation of social dumping. In this matter, the labor cost is lower in other EU Member States, fact that raises two questions: Are Romanians better competitors on the labor market (in terms of being better alternatives for the same productivity?) and Why Romanian economy supports the lowest wages in Europe? The last question arises as a hypothetical appeal for understanding the social dumping issue, since lately there are several theories that address the importance of such countries e.g. Romania that export cheap labor force to support the development of others.

4. Final remark Ironies on globalization and the

integration of Romania in the EU, all have led to strengthening the economic and social area in Europe. As a fact, we might address that Romania has found a path to prosperity and growing in order to develop into a regional model.

References

1. Bernaciak, M.: Social dumping –

political catchphase or threat to labour standards? In: Working paper 2012.06, European Trade Union Institute, Brussels, 2012.

2. Bunescu, L.M., Verez, J.C.: The allegation of social dumping, A case study of Romania. Centre International de formation Européenne. Institut Européen des Hautes Etudes Internationales, 2011. Research paper

3. Ciupagea, C. et al.: Directii strategice ale dezvoltarii durabile in Romania (Strategic Directions of sustainable development in Romania). Institutul European din Romania, 2006.

4. Dobrota, G., Chirculescu, M.F.: The fiscal pressure in the EU Member States. In: Analele Universitatii Constantin Brancusi din Targu Jiu, Seria Economie 2001 nr.1, p.157-166.

5. Heise, A., Lierse, H.: Budget consolidation and the European Social Model. Berlin, Germany. Friedriech Ebert Stiftung Study, 2011.

6. Pop-Radu, I., Ulici-Ciupac, M.L.: Romania within the European Welfare Models. In: International Conference “Monetary, Banking and Financial Issues in Central and Eastern EU Member Countries. 10-12 April 2014 at “Alexandru Ioan Cuza” University of Iasi (Romania), Faculty of Economics and Business


Administration, organized under Jean Monnet project, www.mbf-eu.info

7. Sengoku, M.: Emerging Eastern European Welfare States: A variant of the “European” Welfare Model? Seinan Gakuin University, 2004. Retrieved from http://src-h.slav.hokudai.ac.jp/coe21/publish/no2_ses/3-2_Sengoku.pdf at 10.09.2013

8. Standing, G.: Globalisation. The eight crisis of social protection. Geneva. International Labor Office, 2001.

9. Tache, I., Dumitrache, V.: New welfare regimes in eastern Europe: the cases of Romania and Bulgaria. In: Review of Economic and Business Studies, “Lucian Blaga” University of Sibiu, Volume 5, Issue 2, pp. 59-84, 2012, Retrieved from http://www.rebs.ro/articles/pdfs/142.pdf at 15.09.2013.

10. Tulai, C., Serbu, S.: Fiscalitate comparata si armonizari fiscale (Comparative taxation and tax harmonization). Cluj Napoca. Editura Casa Cartii de Stiinta, 2005.

11. Ulici-Ciupac, M.L., Pop-Radu, I. : Study on the European Welfare and Tax Systems Models to Support Economic Growth and Overcome the Effects of the Crisis, accepted for publication at the mid-december 2013 In: Acta Universitatis Danubius, Oeconomica.

12. Whiteside, N.: Handout of Tutor Module: Restructuring welfare. European Perspectives, 2010-2011, University of Warwick, Department of Sociology, Program Sessions for MA Social Research & Postgraduate PHD Training Program: Social Policy, Social Work and Health Studies.


ECONOMIC DIPLOMACY – THE CASE

OF SLOVENIA

Dejan ROMIH1

Abstract: This paper deals with economic diplomacy, which is the activity of managing economic relationships between countries, in the case of Slovenia. Additionally, it also deals with economic promotion (especially trade and investment promotion), which is one of the main tasks of economic diplomacy, in the same case. Nowadays, economic diplomacy plays a very important role in restoring economic stability, which is, in addition to political stability, essential for peace and prosperity, both in Slovenia and elsewhere in the world. Key words: economic diplomacy, economic promotion, foreign investment, foreign trade, Slovenia.

1 University of Maribor, Faculty of Economics and Business, Department of International Economics and

Business, Slovenia.

1. Introduction Diplomacy is the activity of managing

relationships between countries (see, e.g., [1], [2]). There are several types of diplomacy. One is economic diplomacy, which is the activity of managing economic relationships between countries (see, e.g., [3], [4]). Economic diplomacy plays an increasingly important role both in Slovenia and some other countries, due to several reasons. One is the growing need for economic cooperation between countries as a result of their growing economic interdependence and certain other factors, such as the effects of the current financial and economic crisis on their economies and the consequent need for joint action [5, 6]. Increasing the effectiveness and efficiency of Slovenia’s economic diplomacy is therefore essential to accelerate Slovenia’s economic growth and development, which are crucial for

improving Slovenia’s economic and social situation.

Slovenia’s economic and social situation is anything but good. One of the reasons for this is the current financial and economic crisis, which continues to affect its economy. Slovenia is thus facing certain economic and social problems. Foremost among them is increased unemployment (see figure 1). Additional measures are therefore needed to promote employment and social inclusion of unemployed people. These measures are also needed to prevent the migration of people from Slovenia to other countries (mainly in Europe and North America), which will help in overcoming the current financial and economic crisis. However, these measures and also some others may not eliminate all the negative consequences of economic mismanagement in Slovenia.


Fig. 1. Number of unemployed people in Slovenia and its cohesion regions Source: [7].

2. Economic promotion

Economic promotion is the activity of

promoting an economy. It is very important for Slovenia [8, p. 135] and certain other countries (regardless of their size). There are several reasons for this. One is the contribution of a country’s economic promotion to the country’s economic performance (in terms of achieving certain economic goals such as reducing unemployment (especially among young people), which is a big challenge for Slovenia and certain other countries (see, e.g., [9]). However, economic promotion is not a panacea for economic mismanagement, which is one of the main reasons for the current financial and economic crisis in Slovenia and elsewhere. Generally, economic promotion may contribute to: an increase in foreign trade (i.e. exports

and imports of goods and services), an increase in the number of trading

goods and services, an increase in the number of exporters

and importers, an increase in the number of trading

partners, an increase in foreign investment, an increase in the number of foreign

investors,

an increase in economic growth, an increase in economic security, an increase in employment and

competitiveness. Economic promotion is thus a matter of

national interest. This is particularly the case with Slovenia, whose economy has been in recession for some time. One of the reasons for this was the failure to address the financial and economic crisis. However, the situation has improved.

Economic promotion is one of the main tasks of economic diplomacy [10, p. 6–9]. There are several reasons for this. One is the contribution of a country’s economic diplomacy to the achievement of certain economic goals, such as increasing exports. This is one of the reasons why economic diplomacy is becoming increasingly important for countries whose economic growth is driven by exports, as is the case with Slovenia. Increasing exports is therefore very important to improve economic performance. Additional measures are also needed, such as the promotion of cooperation between companies in entering foreign markets [11].

There are several subtypes of economic promotion, such as trade and investment promotion (see, e.g., [12], [13]). Trade promotion is the activity of promoting

D. ROMIH.: Economic Diplomacy – The Case of Slovenia 181

foreign trade, which is very important for a country or part of it. This is especially the case for countries that are heavily dependent on trade with other countries (see, e.g., [14]). Investment promotion, which is the activity of promoting foreign investment, is as important as trade promotion, especially in times of financial and economic crisis.

3. Trade promotion as a subtype of

economic promotion Foreign trade is the activity of trading

goods and services with other countries. It is very important for Slovenia, contributing to its economic growth and development, which are the main goals of Slovenia’s economic policies [15, p. 95]. Trade promotion, which is a subtype of economic promotion, is therefore essential to achieve these goals, especially in times of financial and economic crisis. This is one of the reasons why trade promotion has become one of the main tasks of Slovenia’s diplomatic and consular representatives.

Slovenia is heavily dependent on trade with other European countries (e.g., Austria, Italy and Germany) (see figures 2 and 3). Foreign trade diversification is thus essential to accelerate Slovenia’s foreign trade. Additionally, it is also essential to accelerate Slovenia’s economic growth and development, which are needed to restore economic stability (which is, in addition to political stability, essential for peace and prosperity) in Slovenia. Removing foreign trade barriers is therefore essential to achieve some of the main goals of Slovenia’s economic policies. These are more or less inconsistent, making them less effective and efficient, which is one of the reasons why Slovenia is less competitive in comparison to some other countries. Chile,

for example, ranks 34th out of 148 countries, according to the Global Competitiveness Index 2013–2014, which is 28 rankings higher than Slovenia [16, p. 15]. This requires immediate action at all levels of governance [17]. In order to become more competitive, Slovenia needs to carry out some economic reforms, which should be consistent, making them more effective and efficient [18, p. 101]. It is essential to increase public confidence in these reforms (especially during the current financial and economic crisis) and to create an environment conducive to economic reforms, which are necessary to adapt to changing economic conditions both at home and abroad. Additionally, it is also essential to accelerate Slovenia’s foreign trade, which is crucial in order to improve labour market conditions in Slovenia and stop the ‘brain drain’ to more competitive countries. This is another reason for Slovenia to accelerate its trade promotion. In doing so, it should follow the example of Chile (particularly ProChile – see http://www.prochile.gob.cl/) or some other countries (e.g. Austria and Finland) [11]. Foreign trade is crucial for a large number of Slovenian companies (regardless of their size) [19, p. 113–114]. Removing foreign trade barriers is therefore essential for these companies’ continued survival, especially in the times to come. Economic diplomacy, which can help in entering foreign markets [20–23], is becoming increasingly important for Slovenia, whose economy is heavily dependent on other economies that are more powerful, making it more difficult for Slovenia to enforce its economic interests abroad. Making alliances is therefore very important [24], although these can be a double-edged sword, especially when used as a device to ‘beggar thy neighbour’.


Fig. 2. Slovenia’s exports of goods by groups of countries Source: [25, p. 398–402].

Fig. 3. Slovenia’s imports of goods by groups of countries

Source: [26, p. 398–402]. 4. Investment promotion as a subtype of

economic promotion Investment promotion is a subtype of

economic promotion. It is very important for a country or part of it. One of the reasons for this is the impact of foreign investment on economic growth and development.

For Slovenia, foreign investment is particularly important because the country lacks domestic investment [27]. One of the reasons for this is the financial and economic crisis, which has had a negative impact on Slovenia’s economy. Investment promotion is therefore very important.

There are certain barriers to foreign investment in Slovenia. One is Slovenia’s ‘national interest’, favouring domestic over foreign investors (see, e.g., [28]). Further privatization (for details, see [29, p. 13–14]) is therefore a great opportunity to rethink Slovenia’s ‘national interest’.

5. Recommendations to the Slovenian

government My recommendations to the Slovenian

government are: further coordination of Slovenia’s

economic and other policies in order to increase their effectiveness and efficiency,

D. ROMIH.: Economic Diplomacy – The Case of Slovenia 183

further modernization of Slovenia’s economic and other policies in order to adapt to the change of economic and other conditions both at home and abroad,

further implementation of economic and other reforms in order to improve Slovenia’s financial and economic environment,

further implementation of other measures in order to accelerate Slovenia’s economic growth and development,

further development of Slovenia’s economic relationships with other countries (mainly outside Europe) in order to improve Slovenia’s economic and social situation,

further development of Slovenia’s economic diplomacy in order to improve the enforcement of Slovenia’s economic interests abroad, and

further improvement of Slovenia’s economic promotion.

5. Conclusion

Economic diplomacy is very important

for Slovenia. One of the reasons for this is the importance of foreign trade and investment for Slovenia’s economic growth and development. Economic diplomacy, which can help promote foreign trade and investment, is therefore essential to improve Slovenia’s economic and social situation in the short and long term. Acknowledgements

The author expresses gratitude to Aleš

Cantarutti (Chamber of Commerce and Industry of Slovenia), Klavdij Logožar (University of Maribor, Faculty of Economics and Business), Tomáš Siviček (Jan Evangelista Purkyně University in Ústí nad Labem, Faculty of Social and Economic Studies) and Janez Šumrada (Ministry of Foreign Affairs of the Republic of Slovenia, Directorate for Economic Diplomacy) for their views on economic diplomacy.

References 1. Bergeijk, P.A.G. van, Okano-Heijmans,

M., Melissen, J. (Eds.): Economic diplomacy: economic and political perspectives. Leiden, The Netherlands. Martinus Nijhoff Publishers, 2011.

2. Bjola, C., Kornprobst, M.: Understanding international diplo-macy: theory, practice and ethics. Oxon, United Kingdom of Great Britain and Northern Ireland. Routledge, 2013.

3. Cantarutti, A.: Mednarodno poslovanje slovenskih podjetij v času finančne in gospodarske krize (International business of Slovenian companies during the financial and economic crisis). In: The Seminar on Economic Diplomacy, Maribor, Slovenia. 2 March 2012.

4. Cooper, A. F., Heine, J., Thakur, R. (Eds.): The Oxford handbook of modern diplomacy. Oxford, United Kingdom of Great Britain and Northern Ireland. Oxford University Press, 2013.

5. Erjavec, K.V.: Keynote address. Keynote address presented at the 2nd International 2-day Conference on Economic Diplomacy and Internationalisation, Ljubljana, Slovenia. 17 June 2013.

6. Gasparič, V.: Gospodarska diplomacija in razvojno sodelovanje (Economic diplomacy and development cooperation). In: The Seminar on Economic Diplomacy. Maribor, Slovenia. 16 March 2011.

7. Haddad, M., Lim, J., Munro, L., Saborowski, C., Shepherd, B.: Volatility, export diversification, and policy. In: Managing openness: trade and outward-oriented growth after the crisis, M. Haddad & B. Shepherd (Eds.). Washington, United States of America. The World Bank, 2011, p. 135–144.


8. Korez-Vide, R.: Trgovinska geografija (Trade geography). In: The Winter School on Economic Geography, Maribor, Slovenia. 20 December 2013.

9. Mills, G.: Trade and investment promotion. In: The Oxford handbook of modern diplomacy, E. F. Cooper, J. Heine & R. Thakur (Eds.). Oxford, United Kingdom of Great Britain and Northern Ireland. Oxford University Press, 2013, p. 402-418.

10. Rana, S., Chatterjee, B.: Introduction: the role of embassies. In: Economic diplomacy: India’s experience, K.S. Rana & B. Chatterjee (Eds.). Jaipur, India. CUTS International, 2011, p. 3-25.

11. Rojec, M., Šušteršič, J.: Cena nacionalnega interesa (Price of national interest). Ljubljana, Slovenia. Fakulteta za družbene vede, 2010.

12. Romih, D., Logožar, K.: Pomen gospodarske diplomacija za izhod iz krize in nadaljnji razvoj slovenskega gospodarstva (The importance of economic diplomacy for the exit from the economic crisis and the further development of Slovenian economy). In: LeXonomica, 3(1), 2011, p. 113–115.

13. Romih, D., Logožar, K.: Vloga častnih konzulov v gospodarske diplomacija. (The role of honorary consuls in economic diplomacy). In: The Seminar on Economic Diplomacy. Maribor, Slovenia. 2 April 2011.

14. Romih, D.: Gospodarska diplomacija in varnost v času krize (Economic diplomacy and security in times of crisis). In: LeXonomica, 5(1), 2013, p. 100–102.

15. Romih, D.: Gospodarska geografija (Economic geography). Speech presented at the Winter School on Economic Geography. Maribor, Slovenia. 20 December 2013.

16. Romih, D.: The role that economic diplomacy and security play in a time

of crisis – the case of Slovenia. In: International Journal of Scientific Research, 2(8), 2013, p. 95–96.

17. Sovič, B.: Gospodarska diplomacija (Economic diplomacy). Speech presented at the Seminar on Economic Diplomacy. Maribor, Slovenia. 2 March 2012.

18. Woolcock, S., Bayne, N.: Economic diplomacy. In: The Oxford handbook of modern diplomacy, E. F. Cooper, J. Heine & R. Thakur (Eds.). Oxford, United Kingdom of Great Britain and Northern Ireland. Oxford University Press, 2013, p. 385–401.

19. *** European Commission: Slovenia – review of progress on policy measures relevant for the correction of macroeconomic imbalances. Brussels, Belgium. 2014.

20. *** International Labour Organization: Global employment trends. Geneva. ILO, 2014.

21. *** Statistical Office of the Republic of Slovenia: Statistical yearbook of the Republic of Slovenia 2013. Ljubljana, Slovenia. 2013.

22. *** Statistical Office of the Republic of Slovenia: Unemployed by duration of unemployment, sex and cohesion regions, Slovenia, annually. Ljubljana, Slovenia. Retrieved from: http://pxweb.stat.si/pxweb/Dialog/varval.asp?ma=0762111E&ti=&path=../Database/Demographics/07_labour_force/02_07008_active_pop_ADS/02_07621_active_pop_ADS_yearly/&lang=1. Accessed: 17 March 2014.

23. *** The global competitiveness report 2013–2014. In: Schwab, K. (Ed.). Geneva. World Economic Forum, 2013.

24. *** United Nations: Promoting investment and trade: practices and issues. New York, United States of America. 2009.


CONTINUING EDUCATION AND

DEVELOPMENT OF EMPLOYEES IN ENTERPRISES

M. SIRKOVÁ1 V. ALI TAHA1 M. FERENCOVÁ2

Abstract: The purpose of this paper is to present the reality of implementation of the continuing education and practices in Slovak business environment. Questionnaire survey was a tool for obtaining primary data. The survey examines the complex of continuing education and practices in Slovak businesses such as what forms, methods and techniques of education are used in education and training. The paper presents partial results of the survey concerning the advantages/disadvantages of education and training staff, as well as what are their motives to continuing education. For data analysis were used descriptive and inferential statistical methods - Pearson correlation coefficient and t-tests. Key words: continuing education, forms, methods and techniques of education, employees.

1 University of Prešov in Prešov, Faculty of Management, Department of Management. 2 University of Prešov in Prešov, Faculty of Management, Department of Marketing and International Trade.

1. Introduction

Performance and success of organizations and businesses is significantly determined by human capital. According OECD (2007), human capital, in its narrower sense is represented by skills and abilities of workforce that directly affect the success of a particular company or industry [1]. Vodák and Kucharčíková (2011) indicate that the human capital of the company consists of employees, their congenital and acquired knowledge, skills, abilities, attitudes and competencies [2]. In order to create a sufficient supply of skills and competencies, i.e. capital people invest in their education, study and other ways of acquiring experience and skills. The return on such investment is long-term, it returns

usually in the form of salary or other compensation.

2. Corporate education and training

Concepts of education and training are often associated. Anyway, some authors, such as Witt (2008) distinguishes between these two concepts. He argues that while training teaches employees to expect specific things to happen, for which they’ll receive specific rewards or punishments, education teaches people to use brain tools. Training is about responding to some external stimulus and education is growth [3].

The corporate education is, according to Vodák and Kucharčíková (2011), recurring cycle based on the principles of corporate education policy which pursues corporate learning strategies and relies on


organizational and institutional prerequisites for learning [4]. In order education to have a positive impact on the organization/company it should be closely aligned with the mission, vision and strategy, and should be carried out in a professional manner. Corporate education can be realized by external institution, internal experts or in its own education training center.

Training is perceived as essential to the development of production processes based around teamwork and skilled employees (Blyton & Morris, 1992, in Heyes & Stuart, 1996) [5]. Training also increases the extent to which employees feel valued by the company (Storey & Sisson, 1993, in Heyes & Stuart, 1996) [6]. Education and training helps to make and keep the job interesting and according Keep (1991, in Heyes & Stuart, 1996) is vital to the successful harnessing of employee commitment in the pursuit of organisational and operational goals [7].

The main aim of corporate education and training is to improve knowledge, skills and abilities of employees and thus increase overall organizational performance and competitive strength. At the core of education is learning. Illeris (2003) sees learning in a broad sense and claims that learning should be understood as all processes leading to permanent capacity change i.e. physical, cognitive, emotional or social in nature [8]. It means that the learning concept also extends to such functions and fields as personal development, socialisation, qualification and competence development.

The continuing education of a company’s employees is a prerequisite in developing an excellence model for its quality management system [9]. At the EU level, the European Social Fund offers a lot of opportunities for the financing various training programs for corporate education [10].

There are a diverse range of reasons for implementation of corporate education and training. Schraeder referring to other authors argues that regardless of the stated purpose of training programs, the efforts are often intended to result in some level of improvement in the organizations’ operations or level of efficiency (Hughey and Mussnug, 1997; Ladyshewsky, 2007, in Schraeder, 2009) [11]. As stated by Mary Garnett (in Horowitz, 2003) the training process begins by understanding the gap between how an employee is per-forming and what level of performance is appropriate [12]. Then, goals are set. For identification of the gap between current and desired performance could be used packaged assessment programs Holstead (in Horowitz, 2003) [13].

Moreover, “corporate education can also play an integral role in succession planning, leadership development, building organisation capability and capacity, and facilitating innovation programmes to generate new products and services and identifying new markets and customers. Organisations with a strategic approach to corporate education that invest in the learning and skills development of their employees find their investment increases over time” (Ryan, 2010, p. 29) [14]. 2.1. Increase the effectiveness of

education and training

Horowitz (2003) give some advices that help people to learn and make them learn faster and better if they: (1) have willingness to learn, (2) know why is for them important to learn, (3) believe that what they will learn will help them in real ways, (4) are in a supportive environment and are free from threat, (5) feel good about themselves and able to learn what is expected of them, (6) are provided the information they are to learn in several different ways, (7) learn by doing the task,

M. SIRKOVÁ et al.: Continuing Education and Development of Employees in Enterprises 187

(8) have a chance to practice what they have learned, (9) are given feedback on their performance, (10) are praised when doing things well [15].

Interesting look at increasing the efficiency of education and training offers Schraeder (2009) who recommends perceive employees as customers [16]. The organization efforts should be focused not only on meeting, but on exceeding a employees'/trainees' expectations. “If employees, in a training environment, are viewed as customers, and steps are taken to augment the training experience by not only meeting, but exceeding the employees' expectations, then the effectiveness of the concomitant training may be improved” (Schraeder, 2009, p. 134) [17]. Following this author offers strategies for augmenting employee training: 1. Adopt flexibility. In a training environment, learning may be enhanced by being flexible in the design of the training (Hornik et al., 2007, in Schraeder, 2009) [18]. This flexibility could relate to the content of the training in which the specific topics covered are targeted directly to the needs and interests of trainees.

2. Infuse active participation. Training should include some degree of active participation by the learners, engaging them in activities that directly relate to the intended objectives of the training session.

3. Create an environment conducive to learning. It means to organize physical environment in a manner that is conducive to learning. The quality of learning could be enhanced by organizing the seating so that it is comfortable and laid out in a way that reflects the nature of training that will ensue.

4. Focus on different learning styles. It is acknowledged that individuals tend to learn differently based on preferred styles of learning (Chambers, 2005, in Schraeder, 2009) [19].

5. Promote networking. Given evidence that the support from peers in a training

venue can impact the overall effectiveness of the learning (Cromwell & Kolb, 2004, in Schraeder, 2009), it might be beneficial to augment training by providing contact information on other training participants, encouraging trainees to communicate and interact following the training session [20].

6. Promote professionalism through quality of interaction and materials. It is highly likely that individuals attending the training session will begin formulate perceptions about the training well in advance of the actual training event.

7. Provide pertinent local information. Training is often conducted at central locations, requiring participants to travel to the training venue. In pursuing this strategy, details regarding the local area where the training will be conducted should be sent to participants (Schraeder, 2009) [21]. 3. Material and Methods

A statistical population consists of employed people in the productive age who are willing to learn. Since the population was very large, respondents were selected in random manner i.e. probability random sampling was used. . The collection of primary data was conducted through questionnaire survey among employees. Total number of people interviewed was 500 and the rate of return is 15.78%. Research sample consists of 79 respondents from the field of administration (53) and production (26).

Fig. 1. Research sample

Source: authors


The main objective of the research was to determine whether organizations provide education; what forms, methods and techniques of education are used in education and training. We also investigated what advantages/ disadvantages of education and training trainees see, as well as what are their motives to continuing education. Partial objective was to determine whether there are differences between the administrative staff and workers in manufacturing.

For data analysis were used descriptive and inferential statistical methods - Pearson correlation coefficient and t-tests. The statistical software SPSS was used.

4. Results

In formulating hypotheses we assumed

that employees positively perceive corporate education and training because of its benefits for their work and that staff from different sectors differently perceive continuing education and training. Based on these assumptions, the following hypotheses were formulated: H1: There is a general tendency of respondents to see continuing education beneficial for their work and it is the main reason for their education and training. H2: There is significant relationship between the elements of continuing education (participation in it, importance for the profession and for self-development, its need and knowledge and acquired knowledge) and its benefits (general benefits, career development, assessment, interpersonal relationships, motivation). H3: There is a significant difference between administrative staff and manufacturing staff (production workers) with respect to how they perceive continuing education.

4.1. The importance of education for professional development

To the question “Do you consider

continuing education important for your professional development?” most respondents answered in the affirmative (75%) (Figure 2). Thus, we can conclude that there is a general tendency of respondents to see continuing education beneficial for their profession (work).

Fig. 2. The importance of professional

development Source: authors 4.2. Testing the relationship between

continuing education and its benefits

This hypothesis was verified by

frequency analysis using the correlation coefficient. Relationships between five elements of employees' education: participation on it, the need for education performance, importance for job performance, importance for self-development, acquiring exploitable knowledge and its five benefits: general benefits, career development, assessment, interpersonal relationships, and motivation were measured by using the Pearson correlation coefficient. The interpretation of value of the correlation coefficient is as follows: < 0.1 is trivial correlation, 0.1 - 0.3 is small correlation, 0.3 - 0.5 medium correlation, > 0.5 is high correlation. Results are visualized in Table 1.


Denomination of the table Table 1

Elements of education

Participation in

education and training

Importance of

education for the

profession (job perfor-

mance)

Importance of

education for self-

development

The need for

education performanc

e

Exploitable knowledge

General benefits of education & training

, 414** , 316** , 269**

Influence on career development

, 356* , 166*

Influence on staff assessment

Influence on interpersonal relationships

, 332* , 567** Ben

efits

of e

duca

tion

Influence on motivation

Source: author Statistical significance of differences in terms of the work area respondents Table 2

Question Average Standard deviation

T (Test criterion)

Sig (2-tailed)

administration 2,35 Are you educated in your work? manufacturing 2,15

,650 3,931 ,105

administration 3,35 Do you think it is important for your profession continuing education? manufacturing 2,61 ,541 4,075 2,598

administration 2,20 Is your continuing education important to you? manufacturing 3,61 ,417 3,572 3,722

administration 2,19 Is continuing education necessary to pursue your profession? manufacturing 2,37

,600 5,384 3,642

administration 3,15 Are acquired knowledge exploitable in your job? manufacturing 2,68 ,283 3,211 1,614

administration 3,05 Do you see any benefits of continuing education? manufacturing 2,11 ,164 3,407 ,681

administration 3,35 Does your continuing education influence your career development? manufacturing 2,69 ,082 3,388 ,483

administration 2,35 Has participation in continuing education an impact on staff assessment?

manufacturing 2,11 ,639 4,531 1,723


Question Average Standard deviation

T (Test criterion)

Sig (2-tailed)

administration 3,30 Does education improve interpersonal relationships in the workplace? manufacturing 2,21 ,033 4,037 2,805

administration 3,05 Is continuing education motivating for you? manufacturing 2,79 ,617 3,711 3,776

administration 3,33 Does your employer support staff education, training and development? manufacturing 2,66 ,377 5,484 1,540

administration 3,04 Has your organization developed a program for staff education, training &development? manufacturing 2,61 ,525 3,565 3,987

administration 2,35 Do you educate yourself during working hours? manufacturing 2,19 ,350 3,192 ,646

administration 2,30 Are you satisfied with the conditions for education provided by your employer? manufacturing 2,11 ,013 4,067 2,845

administration 3,33 Does the content of education relate to your job performance? manufacturing 2,66 ,477 5,489 1,549

administration 3,04 Do you meet existing forms and methods of education in the workplace? manufacturing 2,61 ,544 3,735 ,787

Source: authors

The most important findings and results: - There is a significant relationship between the participation in corporate education and interpersonal relationships. - This result indicates that the education brings improvement in relationships in the workplace. - There is a significant relationship between the importance of education for self-development and a shift in interpersonal relationships. - There is a significant relationship between the awareness of education importance for the job performance and career development. Respondents indicated that continuing education is important for their profession and that may affect their career development. - Respondents perceive continuing education as beneficial for them, knowledge gained can apply in practice.

- There are no significant relationship between education and its impact on motivation. - There are no significant relationship between education and staff assessment. 4.3. Testing the significant difference

between administrative and manufacturing staff

In hypothesis we assume significant

differences between administrative staff and manufacturing staff with respect to how they perceive continuing education. Verification of this hypothesis was verified by means of t-tests. Responses on individual question were by t-tests compared in relation to the work area. Results are shown in Table 2 (above).

In no item were found statistically significant differences between administration staff and manufacturing staff. Our assumption that administrative


staff is likely to show greater interest in and attach greater importance to education, training a development than manufacturing staff was not confirmed. That is why our (alternative) hypothesis assuming the existence of differences between administrative staff and manufacturing staff in perceiving continuing education is rejected in favour of the null hypothesis. 5. Conclusion

Based on the analysis , we can conclude that employees have a positive outlook on further education and its benefits. Education influences on their career development, assessment, motivation and interpersonal relationships. Appreciate that it is possible to find continuing education and training benefits as marked mainly the acquisition of new information, self-development, acquiring new contacts and a new perspective on the issue. Often mentioned that they that can be educated within the working hours and in doing so to let off steam, because there is a pleasant atmosphere.

The most important benefits for their work also included improving communication with people, acquire new knowledge, self-knowledge, streamlining workflow, better use of working time, getting hindsight, a better understanding of the decisions of superiors and improvement in assertive communication.

Based on the above, we recommend that educate employees especially during their working life in the field of communication and language competence, presentation skills which may help them continue to acquire and improve their professional skills. Acknowledgements

The article is part of the solution of the

research grant KEGA 017PU-4/2013

Networking of some element of faculty structure.

References 1. Chiţu, I.B.: The real impact of projects

financed through European Social Fund–Sectoral Operational Programme for Human Resources Development - over target audience. In: Journal of Applied Economic Sciences, vol. 7, Issue 4(22), 2012. See: [10]

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9. Schraeder, M.: Leveraging potential benefits of augmentation in employee training. In: Industrial and Commercial Training, Vol. 41, Iss. 3, 2009. See: [11], [16], [17], [18], [19], [20], [21].

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(Effective education of employees 2nd updated and extended ed.). Praha. Grada Publishing, 2011. See [2], [4].

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MANAGING BUSINESS IN EUROPE. SPECIFIC ISSUES IN THE EASTERN

AND CENTRAL EUROPEAN COUNTRIES

Bianca TESCAŞIU1

Abstract: The European business environment became a well-defined one. Specific elements such as: European cultural values, euro-clusters, European marketing, strategies for Europe, etc. can be found now in the specific literature, and almost all the firms working in European Union take into consideration specific aspects on doing business in this part of the world. This article tries to point out some of these aspects and it intend to apply some of them in the new economic context created by the Central and Eastern European Countries accession to EU. Key words: European cultural values, multicultural diversity, euro-clusters, The Single Market.

1 Faculty of Economic Sciences and Business Administration, Transilvania University of Braşov.

1. Introduction Defining the “culture” concept is quite

difficult. It supposes to take into consideration a few approaches, approaches referring to the following:

• Culture is a system of values and social norms

• Culture is learned • Culture is shared • Culture has many faces

Applying this concept in the economic

environment implies especially to analyse the consequences of cultural differences on the attempt to do business at the international level. Cultural differences may affect the business attitude, so, understanding the cultural norms (particularly organizational structures

employed) and the individual culture becomes necessarily.

The culture components complete the significance of this concept, knowing the fact that culture covers a lot of areas:

Elements of culture Table 1

Elements of culture Material culture (technology, economy) Social culture (family, education) People (value system) Estetics (arts, music, theatre, dans) Language

2. Objectives

There is a challenge in the economic literature to establish if the Single Market/the Internal Market needs a “personalized” approach. Understanding its


structure – including the cultural environment – could answer to these preoccupations. To achieve this objective, it is recommended to define the specific European cultural values and to establish the way they influence the business environment (at microeconomic and macroeconomic level)

3. Materials and Methods In the world economy, the Single European Market is a unique one. Its laws and regulations give it particular characteristics, such as:

• The removal of physical, technical, fiscal barriers

• The free movement of labour force • The social market economy • The single currency – euro

The Single Market represents the most developed integration structure from the world (economic and monetary union). At the same time, the Single Market is one of the most heterogeneous integration structures in the world. It is composed of 28 nations, with different culture, with high level of nationalism, with different levels of development, with different attitudes regarding the European integration process. These are the reasons why the cultural differences should be taken into consideration when the decision to involve in European business is taken. The main question is what cultural values should be considered relevant for the European business environment. At international level the following values could be considered important to define the cultural environment:

1. Language – can determine the results of a business either by spoken language (official language – the case of minorities, translation mistakes, special

meanings of the same expressions, etc.) or unspoken/silent language (language of space, language of time)

2. Material culture - can influence by the way that people relates to material possession, the way that people regard pay and remuneration for work

3. Religion – provides attitudes and beliefs, values for individuals and groups

4. Education and training – the educational systems provides individual or group values

5. Values and attitudes – by determining behavioural patterns

Fig. 1. Cultural values Cultural organization is a concept largely used today trying to extend the meaning of “doing business at the international level”. There are different cultural organization values perceived in specific way in the world economy. For instance:

1. the relation between masculinity and feminity determines the way that women are accepted in the labour market. Speaking of this, some different situations can be presented:

Religion

Educatio n

Values and

attitudes

Material culture

Language

Cultural values

B. TESCAŞIU: Managing Business in Europe. Specific Issues in the Eastern and Central … 195

• Near East, Japan – traditional view about the female implication in the economic activity (low rates of female participation in the labor market)

• Nordic, USA – supportive with women

2. regarding the relation between individualism and collectivism there are different ways of appreciating it: • Greece and Portugal, Japan – are

economies oriented to collectivism • Europe, USA – individualism is a

primary value. 3. also, the orientation on short or long

term gives useful informations about the way that the strategies should be planned: • UK, Germany, Sweden,

Netherlands – the firms are oriented on short perspective

• Japan, France – long term planning At the international level, some clusters with similar cultural attitudes can be identified, starting from the cultural common values shared by the countries:

Fig. 2. How to act in a multicultural environment – global market

This kind of “grouping” countries, helps the entrepreneurs to manage in the cultural diversity of the world economy. In the same way, in European Union some “Euro-clusters” could be created, with the objective of identifying some groups with cultural similarities.

European Union economy is based on what we know as “The Single Market” (or The Internal Market”). Defining The Single Market supposes to cover a complex concept. The Single Market continues the Common Market. Those two concepts are two different stages of integration specific in European integration. On its way to achieve a high level of integration, European Union passed through these two phases:

The Common Market (The Rome Treaty - 1957) • Custom union • Free movement of factors (labor, capital) • Common politics • Harmonized politics The Single Market (The Maastricht Treaty - 1993) • Economical union (common and harmonized politics) • Monetary union • Political union

Fig 3. The common Market and The Single Market

4. Results and Discussions

The Single Market determines a new perspective on studying economics for this new environment, created as an over-national one. For instance, the new members of European Union have common characteristics because of their common history and these characteristics determine special approaches to their markets. In the same time, they have to be able to act in this over-national level, competing with countries with higher level of development. But, because of economic reasons, they should be taken into consideration, so, might become n


important specific segment for the EU Single Market. So, describing this segment might become useful. We include in this category: Poland, Hungary, Czech Republic, Slovakia, Slovenia, Latvia, Lithuania (2004), Romania, Bulgaria (2007), Croatia (2013). This segment might be described by the following:

• they come from another type of economy (centralised economies), so they passed through a transition period during the last years

• they had to accomplish some conditions to join EU

• they belong to a former common market (other than the European Common Market)

• they have specific cultural values (sometimes common cultural values)

Cultural changes determine different feed-back from different groups. Each culture will react in specific way to new ideas, new products and new environments – as the Single Market represents. Also, the degree of nationalism may, also, have an important bearing on the willingness to change. Starting from these premises, the following groups become relevant for the European business environment:

Euro-clusters Table 2

Euro-cluster Countries Anglo UK, Ireland Nordic Finland, Sweden, Denmark,

Norway Germanic Austria, Germany,

Switzerland Latin European

Spain, Portugal, Italy, France, Belgium

Near East Greece, Poland, Hungary, Czech Republic, Slovakia, Slovenia, Romania, Latvia, Lithuania, Serbia, Montenegro, etc

An analysis of some cultural values shows us the following:

• Anglo Multicultural societies

(especially UK, as a result of their former domination on some countries – India, Pakistan). This aspect gives to these countries a mixture of ethnic groups and cultures

Reserved and private people

Attached to values like “personal freedom” and “private property”

• Nordic Egalitarian societies Competition is not so

encouraged Open minded to give the

“official status” to other languages

• Germanic Attachment to family

values Conservative societies Business culture is based

on very well knowing an planning of activities and sub activities

People - honest, hard-working, punctual and very responsible

• Latin European People – attached to

culture, history, family and language

Open minded to novelty, and new ideas

• Near East People - attached to

religion and family Bureaucracy – business

needs a lot of time to achieve especially the managerial perspective

B. TESCAŞIU: Managing Business in Europe. Specific Issues in the Eastern and Central … 197

Knowing these aspects, the foreign investors have the opportunity to adapt their business style to the European environment. Even though the Single Market establishes common laws and regulations, the cultural aspects cannot be changed by this

For a better understanding, we will briefly analyse some cultural differences between the Romanian and Finnish environment. According to some basic cultural information, the two countries are characterized by the following:

Table 3Basic cultural information

Romania and Finland

Issue Romania Finland Official language Romanian Finnish and Swedish

Religion (2012) Romanian 89.5% Hungarian 6.6% Roma 2.5%, Ukrainian 0.3% German 0.3% Russian 0.2% Turkish 0.2% other 0.4%

Evangelical Lutheran Church of Finland - 75.2% Finnish Orthodox Church – 1.1% Other – 1.5% No religious affiliation – 22.1%

Education Bologna system (rank 32*)

Bologna system (rank 1*)

*http://thelearningcurve.pearson.com/index/index-ranking Doing business in these two countries implies to take care about some issues coming from different cultural aspects: 1) Personal relationships

a) The importance of relationships - Romanians are very attached to

personal relationships - Finns are transactional and do not

need long-standing personal relationships in order to conduct business

b) Cooperation estimated time - Romanians do not value long-

term cooperation - Finns are interested in long-term

cooperation

2) Business style a) Using e-mail

- In Romania, e-mail is often used, but to signing an agreement

needs a face-to-face contact - Finns do not necessarily need

face-to-face contact, using e-mail is enough

b) Formal/non-formal character - Romania – non-formal character - Finland – formal character

c) Time management - Romanians – do not always

respect dead-lines, not so good in managing time

- Finns – excellent time-managers

3) Decisions and communication a) Communication

- Romanians do not respect always verbal commitments

- Finns – a verbal commitment is as important as a written contract


b) Decision - Romania – decisions are made by the senior members of the firms and usually are related to the political environment - Finland – decisions are taken in concordance with technical and scientific support

5. Conclusions A good strategy in international marketing supposes to take into consideration the following aspects:

• The national context • The international environment • The local, foreign market

Apart from the above mentioned, today, in the regionalization context, new issues influence the international business. In this context, European Union offers an example of the way that, even if a common market with common rules was created, the cultural differences still have an important role in defining the national markets.

For The Single Market, multicultural diversity is still a component that cannot be avoided. For an efficient investor this aspect has to be taken into consideration, and for the business success the cultural

environment - and its impact on the economic activity - has to be studied. References 1. Boscor, D.: Marketing international

(International Marketing) Braşov. Editura Universitatii “Transilvania” din Brasov, 2008.

2. Chitu, I.B.: Dezvoltarea comerţului din mediul rural în perspectiva integrării României în Uniunea Europeană (Trade development in rural areas in perspective of Romania's integration in the European Union). Braşov. Editura Universităţii “Transilvania” din Braşov, 2006.

3. Mercado, S., Welford, R., Prescott, K.: European Business, fourth edition. Prentice Hall, 2001.

4. http://europa.eu/pol/pdf/flipbook/ro/ culture_audiovisual_ro.pdf Accessed: 27.04.2014.

5. http://www.kwintessential.co.uk/ resources/global-etiquette/uk.html Accessed: 27.04.2014.

6. http://www.telegraph.co.uk/comment/ telegraph-view/3618632/Ten-core-values-of-the-British-identity.html Accessed: 27.04.2014.

ECONOMIC DATA PROCESSING


STATISTICAL EVALUATION OF THE EU

COUNTRIES USING ECONOMIC INDICATORS

M. OPRIŞ (STĂNILĂ)1 T. DEMETER1

A. PALADE1

Abstract: The purpose of this paper is to evaluate the EU development area for the year 2012, using main statistical indicators. The cluster analysis and the Principal Component Analysis are the methods used to compare the 28 EU countries, the EU members, with each other and to determine the resemblances and the differences between them. The results show that the optimal solution is to create three clusters, allowing a suitable differentiation between the countries, while keeping the homogeneity among the countries it comprises. Key words: EU countries, Principal Component Analysis, Cluster analyses.


1. Introduction

European economies have faced a number of challenges in the past few years. After a hard recovery from the significant difficulties brought by the global economic crisis, concerns about the sustainability of debts in Greece and a number of other European countries continue to raise questions about the viability of the euro itself, and some about the sustainability of the European Union. Some countries are now facing another deep recession in the region, with the inflation rising, and concerns arise about the effects of these difficulties on other parts of the world.

Despite these challenges, several European countries continue to feature among the most competitive economies in the world prominently.

The present paper highlights the importance of the economic indicators of the EU countries members, using the latest theories in the field, an original model for determining the connection between economic factors. The paper aims to answer the problem of evaluating the EU development area for the year 2012, presenting the results of a comparative analysis conducted from the economic point of view, using the most recent statistical data.

The paper covers an empty space in the field of regional development evaluation, especially the EU economic development, using official statistics of Eurostat collected from a recent period, the year 2012. The work attempts at presenting the latest data, analysed with state of the art methods.


The present paper contains a presentation of the economic variables used in this analysis, followed by a cluster analysis and then by a Principal Component Analysis.

The cluster analysis has the purpose to identify the groups (the EU Countries in this case) that are similar to each other, but different from other individual countries from the groups. 2. Methodology

The paper aims to scientifically discover an indicator by means of an analysis instrument of statistic data, SPSS, used for making a cluster analysis and a principal components analysis.

Cluster analysis represents a statistical and modern method for classification, through which relatively homogeneous complex groups of variables result, based on the values of the considered characteristics. After that, for a profound analysis and for retaining the significant variables for analysis, a principal components analysis was performed.

The principal components analysis method is a factorial method through which a number of new variables are constructed, as combinations of the initial variables, named primary indicators, having no correlation between them and a maximum variance. Within the principal components analysis the entire variance of the variables is explained.

The proximity indices express the similarities or the lack of them, which can be found between two subjects, considering all the active variables that describe the subject.

In this analysis, the SPSS program calculates the Euclidian distance for the quantitative data.

For the cluster analysis, the Ward’s Method was used, because the goal of this cluster analysis is to form similar groups, on the criterion used for measuring

similarity or distance. Distance is a measure of how far apart two objects are, while similarity measures shows how similar two objects are. For cases that are alike, distance measures are small and similarity measures are large.

The current analysis is made regarding the data found on eurostat.com, for 2012. For the economic analysis of the cluster, we have chosen to study the 28 countries now part of the European Union by looking at major economic indices like: • Population -in this section we can find

the number of persons, counted on the 1st of January 2013. • GDP - represents the gross domestic

product, which is an indicator for a nation’s economic situation, in this case at market prices. • Employment rate by age group 20-64 • Inflation • Comparative Price Levels of final

consumption by private households including indirect taxes (EU28 = 100). • General Government - General

Deficit/Surplus % of GDP • Imports of goods and services at

current prices. • Exports goods and services exports at

current prices.

3. Results Having all the criteria analysed

simultaneously offers the big picture for the economic development of the 28 EU member countries and it allows the comparison of these countries. The data are collected from previous research made by Eurostat, so we can say that they are all valid and no missing value can be found.

The Agglomeration Schedule shows how each case was grouped during the grouping phases. The second column, Cluster Combined, contains the grouped cases; the stage cluster shows the stages in which the elements appeared previously, while the

M.OPRIŞ (STĂNILĂ) et al.: Statistical Evaluation of the EU Countries Using … 203

next stage column shows the case in which it will later appear again.

We can find the lowest value for the coefficient (22.013) for the pair of countries Cyprus and Slovenia, which means that the two countries formed a

group in the very first step, showing a lot of similarities, having the smallest distance between groups. The whole clustering process contains a total of 27 stages.

Agglomeration Schedule Table 1

Cluster Combined Stage Cluster First Appears Stage

Cluster 1 Cluster 2

Coefficients

Cluster 1 Cluster 2

Next Stage

1 13 24 22.013 0 0 4 2 6 14 48.701 0 0 6 3 17 23 84.517 0 0 9 4 13 22 127.040 1 0 15 5 15 25 171.115 0 0 8 6 6 18 235.086 2 0 11 7 10 28 308.983 0 0 19 8 3 15 404.648 0 5 14 9 2 17 501.802 0 3 18 10 4 27 623.329 0 0 20 11 6 11 777.402 6 0 14 12 7 20 934.960 0 0 17 13 1 9 1100.946 0 0 23 14 3 6 1285.046 8 11 21 15 8 13 1470.127 0 4 21 16 12 19 1660.897 0 0 19 17 7 26 1865.055 12 0 20 18 2 21 2096.926 9 0 24 19 10 12 2487.660 7 16 23 20 4 7 3024.006 10 17 22 21 3 8 3663.398 14 15 24 22 4 16 4788.602 20 0 25 23 1 10 6194.896 13 19 25 24 2 3 7874.151 18 21 27 25 1 4 15997.744 23 22 26 26 1 5 34791.602 25 0 27 27 1 2 63812.057 26 24 0


The table above shows how clusters can be formed. We took into consideration three hypotheses; in the first one, we have grouped the countries into three clusters, having the following structures:

The first cluster is formed by: Belgium, Denmark, Ireland, Spain, France, Italy, Luxembourg, the Netherlands, Austria, Finland, Sweden, and the United Kingdom.

The second cluster is formed by: Bulgaria, the Czech Republic, Estonia, Greece, Croatia, Cyprus, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovenia, and Slovakia.

The third cluster is formed by: Germany. For a more accurate classification we

tried to divide the countries into four groups and we had the result illustrated below:

The first cluster is formed by: Belgium, Spain, France, Italy, the Netherlands, and the United Kingdom.

The second cluster is formed by: Bulgaria, the Czech Republic, Estonia, Greece, Croatia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Portugal, Romania, Slovenia, and Slovakia.

The third cluster is formed by: Denmark, Ireland, Luxembourg, Austria, Finland, and Sweden.

The fourth cluster is formed by: Germany.

When we grouped the countries into five clusters, we have obtained this result:

The first cluster is formed by: Belgium, Spain, France, Italy, the Netherlands, and the United Kingdom.

The second cluster is formed by: Bulgaria, Hungary, Poland, Romania.

The third cluster is formed by: the Czech Republic, Estonia, Greece, Croatia, Cyprus, Latvia, Lithuania, Malta, Portugal, Slovenia, and Slovakia.

The fourth cluster is formed by: Denmark, Ireland, Luxembourg, Austria, Finland, and Sweden.

The fifth cluster is formed by: Germany.

As it can be seen, Germany is an outliner, it is a country that is different from all the other 27 countries, and it seems that it cannot be grouped together with other counties in any of the 3 hypotheses.

If a visual representation of the distance at which clusters are grouped is wanted, one can look at the display called the dendrogram. The dendrogram is always read from left to right. Vertical lines show joined clusters. The scale indicates the distance at which clusters are joined. The observed distances are rescaled so they can fall into the range from 1 to 25, so that the actual distances are not seen; however, the ratio of the rescaled distances within the dendrogram is the same as the ratio of the original distances.

When one reads a dendrogram, one wants to determine at what stage the distances between clusters that are combined is larger. One must look for large distances between sequential vertical lines.

The dendrogam allows the graphic representation of the cohesion of the clusters formed. It represents a tree-shaped graph that shows the level at which two clusters are joined by marking a vertical line that connects the horizontal lines, the so called branches, which correspond to the united groups. The cluster is obtained by cutting the dendrogram at a certain level.

From the dendrogram bellow it can be noticed that Germany stays apart from the other 27 counties, having a different economic situation. Besides that, we have two other clusters formed, as already mentioned. The first cluster is formed by: Belgium, Denmark, Ireland, Spain, France, Italy, Luxembourg, the Netherlands, Austria, Finland, Sweden, the United Kingdom.

The second cluster is formed by: Bulgaria, the Czech Republic, Estonia,


Greece, Croatia, Cyprus, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovenia, Slovakia.

It is clear that the countries are grouped by the economic status that they had in 2012.

Fig. 1. Dendogram

Principal Component Analysis The principal component analysis is part

of the descriptive methods, which analyse the interdependencies between variables. It has the role to identify the main components by explaining certain components or attitudes of individuals.

In the principal component analysis, it can be noticed the interdependencies between several variables, where we can identify two main components that gather the main information detained by the variables and are able to explain and simplify the process of reading the final result. A factorial analysis is accomplished, precisely a principal components analysis, in order to retain only the indicators that are essential for the study of the economic development of the EU countries.

This analysis was performed in SPSS, considering all the variables used in the cluster method.

The table below shows the mean for each variable included in the model. It can be seen that the mean is quite different for each variable, except for the imports and exports variables.

Descriptive Statistics Table 2

Mean Std. Deviation Analysis N GDP 24.9036 10.64677 28 Employment Rate 67.9321 6.41613 28 Inflation 2.8750 .92681 28 Comparative Price Levels 90.9429 24.69036 28 General Government General Deficit/Surplus -3.8250 2.66939 28 Imports 19.8855 27.16741 28 Exports 20.7810 29.20998 28


Then the SPSS System calculates the correlation coefficients between the variables taken into consideration, two by two.

There are some strong correlations between GDP and the Comparative Price Levels, the Employment Rate and Comparative Price Levels, but the strongest correlation is between Imports and Exports.

The lowest correlation is between Imports and Government General Deficit/Surplus followed by the correlation Price Levels and Government General Deficit/Surplus.

Establishing the main 2 components, the program calculates the correlation coefficients between all the variables and the main components.

Communalities Table 3

Initial Extraction GDP 1.000 .502 Employment Rate 1.000 .712 Inflation 1.000 .584 Comparative Price Levels 1.000 .717

General Government General Deficit Surplus

1.000 .829

Imports 1.000 .580 Exports 1.000 .589

Extraction Method: Principal Component Analysis. Table 4 shows the total value explained

by each component. It can be observed that 64.4% of the total variance is explained by the two components, the last components explaining fewer and fewer.

The third one can explain a plus 19.2%, but we will take into consideration only two main components.

Total Variance Explained Table 4

Initial Eigenvalues Extraction Sums of Squared Loadings

Rotation Sums of Squared Loadings

Com-ponent

Total % of Variance

Cumu-la-tive %

Total % of Variance

Cumu-lative %

Total % of Variance

Cumulative %

1 3.090 44.136 44.136 3.090 44.136 44.136 3.068 43.827 43.827 2 1.423 20.331 64.468 1.423 20.331 64.468 1.445 20.641 64.468 3 1.350 19.282 83.750 4 .613 8.761 92.510 5 .375 5.353 97.864 6 .145 2.076 99.940 7 .004 .060 100.000

Extraction Method: Principal Component Analysis.

Notice that ComparativePriceLevels, GDP, Employment Rate, Imports and Exports are strongly correlated with the first component, whereas the General Government General Deficit Surplus and Inflation are connected with the second component.

The process of the axes rotations does not change much of the whole picture. The

process of rotation has the purpose of enlarging the correlation between the variables and the two main components. The results concerning the correlation coefficients are obtained by the axes rotation using the Varimax method (it has the effect of maximizing the highly correlated variables with the components).


Component Matrix Table 5

Component 1 2

GDP .709 .001 Employment Rate .694 .479 Inflation -.504 .575 Comparative Price Levels .808 -.253 General Government General Deficit Surplus .175 .893 Imports .761 -.009 Exports .767 .014

Extraction Method: PrincipaL Component Analysis. a. 2 components extracted.

The graphic representation of the

association between variables and the two main components shows that the first component is formed especially by social indicators and import and export values, and the second component is formed by governmental indicators such as inflation and Governmental General Deficit/Surplus, but they are represented in different quadrants, which means that those indicators are in strict opposition.

Fig. 2. Component Plot in Rotated Space–

The graphic representation of the association between components

and variables

There is a noticeable vicinity of attitudes of the countries with respect to the first factor, regarding the GDP, Employment Rate, Comparative Price Levels, Imports and Exports.

4. Conclusions

After a long period of economic

uncertainty, the EU countries are trying to recover and gain ground, but unfortunately the world economy is facing new challenges. 2012 was a turning point for the economy of the European Union. 2013 is showing to be quite a good year, national economies are starting a slow growth, but the expectations for 2014 are big.

After six consecutive quarters of stagnation or contraction, the EU economy has posted positive growth in the second quarter of 2013. The recovery is expected to continue, and to gather some speed next year. However, it is too early to declare the crisis over and many challenges are here to come.

The goal of this cluster analysis is to form similar group. Distance is a measure of how far apart two objects are, while similarity measures how similar two objects are. For cases that are alike, distance measures are small and similarity measures are large.


The cluster analysis grouped the countries into three clusters, having the following structure:

The first cluster is formed by: Belgium, Denmark, Ireland, Spain, France, Italy, Luxembourg, the Netherlands, Austria, Finland, Sweden, and the United Kingdom.

The second cluster is formed by: Bulgaria, the Czech Republic, Estonia, Greece, Croatia, Cyprus, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovenia, and Slovakia.

The third cluster is formed by: Germany. It seems that Germany is the most

different country, from an economic point of view; it stands out from the 28 EU countries.

There are some strong correlations between the GDP and the Comparative Price Levels, the Employment Rate and Comparative Price Levels, but the strongest correlation is between Imports and Exports.

For the principal component analysis we shall notice the interdependencies between several variables, on which we can identify two main components that gather the main information detained by the variables and are able to explain and simplify the process of reading the final result. A factorial analysis was accomplished, precisely a principal components analysis, in order to retain only the indicators essential for the study of the economic development of EU countries. The association between variables and the two main components shows that the first component is formed especially by social indicators and import and export values, and the second

component is formed by governmental indicators such as inflation and Governmental General Deficit/Surplus, but they are represented in different quadrants, which means that those indicators are in strict opposition.

A moderate expansion of the economic activity is expected in the second half of 2013. It remains the hope that 2012 was the final year for the major economic crisis, and now things will go only better.

References 1. Constantin, C.: Sisteme informatice de

marketing (Marketing Systems). Braşov. Infomarket Publishing, 2006.

2. Duguleana, L.: Metode de previziune economică (Methods of Economic Forcasting). Braşov. Transilvania University Publisher, 2011.

3. Duguleana, L.: Bazele statisticii economice (Basics of Economic Statistics). Bucureşti. CH Beck Publisher, 2012.

4. Petcu, N.: Statistica (Statistics). Braşov. Infomarket Publishing, 2003.

5. *** The Global Competitiveness Report 2012–2013, Klaus Schwab, World Economic Forum, 2012

6. http://ec.europa.eu/economy_finance/publications/european_economy/2013/pdf/ee7_en.pdf. Accessed: January 2014.

7. http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/. Accessed: January 2014.

8. www.wikipedia.org


FACTORS THAT INFLUENCE THE

NUMBER OF STUDENTS ENROLLED IN THE HIGHER EDUCATION

SYSTEM IN ROMANIA

A. PALADE1 G. BRATUCU2 M. OPRIŞ1

Abstract: The present article begins with a short analysis of the scientific literature, represented by theoretical and methodological aspects regarding the regression analysis. Then, it continues with the description of the data used for analysis and econometric model construction. The present paper also presents the adjusting and forecasting curve for the data analysed, as well as the final conclusions. The general conclusion is that in the following period the number of students will increase constantly. Key words: regression analysis, higher education system, econometric model, forecasting.

1 Ph.D. Student, Dept. of Economic Sciences and Business Administration, Transilvania University of

Braşov. 2 Dept. of Economic Sciences and Business Administration, Transilvania University of Braşov.

1. Introduction The education system in Romania has

gone through major changes recently. Whether we talk about adopting the Bologna system, which means structuring the higher education system on three levels (undergraduate, master’s and doctoral studies), the emergence of private universities or classifying educational facilities in Romania, the increasing number of students, at the end, all of them have had an impact on the quality of the Romanian education.

The economic development of any country is closely related to the quality of human resources. Therefore, the development of higher education is essential for the Romanian economy.

Barro’s studies, carried out in more than 100 countries, from 1965 to 1995, show that education (especially higher education) has a direct impact on the rate of economic growth [2].

Therefore, in this article some theoretical aspects regarding the multiple regression analysis will be reviewed. The paper will continue with the construction of the econometric model, followed by the forecast for the next two academic years, respectively 2012/2013 and 2013/2014.

The analysed data are the following: students enrolled in the national system of higher education (in thousands), higher education institutions, the faculties in Romania, the number of teachers (in thousands), university graduates (in thousands) and the real wage indices. The


period analysed is from 1990/1991 and 2011/2012 academic year, and the analysis was performed at the level of the Romanian education system.

2. Theoretical and methodological

aspects regarding the regression analysis

Multiple regression analysis is useful for

the construction of econometric models. Therefore, a socio-economic phenomenon is influenced by the action of several factors.

The multiple regression analysis allows estimating the parameters of the econometric model, analysing correlations between variables, testing the significance of the explanatory variables, establishing the validity of the multiple regression model, and can be used for forecasting [4].

Manifestations of interdependent relationships are extremely varied and most of the time pretty difficult to observe.

In order to highlight the law which is manifested in each relation and for statistical measure of the tendency, the estimating equations shall be used. This function is known as the regression function [5].

The purpose of multiple regression (a term used by Pearson in 1908), is to highlight the relationship between a dependent variable (explained, endogenous, outcome) and several independent variables (explanatory,

factors, exogenous, predictors). The best model is the one that has the most explanatory variables.

3. Econometric model construction and

forecasting As mentioned before, the analysed data

are the following: students enrolled in the national system of higher education (in thousands), higher education institutions, the faculties in Romania, the number of teachers (in thousands), university graduates (in thousands) and real wage indices.

The period analysed is from the year 1990 and until 2012, and the analysis was performed at the level of the Romanian education system.

The notations further used for constructing the econometric model are:

explained variable:

(y) - students enrolled

explanatory variables: (x1) - higher education institutions (x2) - faculties in Romania (x3) - teachers (x4) - university graduates (x5) - real wage indices. The following table presents the data

used for the multiple regressions. It can be observed that the analysed period is between 1990 and 2012.

A. PALADE et al.: Factors that Influence the Number of Students Enrolled in … 211

Data used for multiple regression Table 1

Academic year Students enrolled (in thousands)Higher

education institutions

The faculties

Teachers (in thousands

University graduates (in thousands)

Real wage

indices

Y X1 X2 X3 X4 X5

1990/1991 193 48 186 271 25 100

1991/1992 215 56 257 274 29 81,5

1992/1993 236 62 261 283 33 70,8

1993/1994 250 63 262 283 34 58,9

1994/1995 255 63 262 288 47 59,1

1995/1996 336 95 437 296 57 66,5

1996/1997 354 102 485 306 80 72,7

1997/1998 360 106 516 313 67 56,2

1998/1999 407 111 556 309 63 58,4

1999/2000 452 121 632 311 67 57

2000/2001 533 126 696 301 76 59,4

2001/2002 582 126 729 294 93 62,4

2002/2003 596 125 742 300 103 63,9

2003/2004 611 122 754 286 110 70,8

2004/2005 641 117 742 281 108 78,3

2005/2006 716 107 770 285 112 89,5

2006/2007 785 104 755 281 125 97,4

2007/2008 896 106 631 277 232 111,8

2008/2009 891 106 630 272 214 130,3

2009/2010 775 107 629 268 191 128,3

2010/2011 673 107 621 252 186 123,6

2011/2012 539 108 614 260 103 121,3

Source: Statistical Yearbook of Romania, National Institute of Statistics, Breviary Statistically, Romania in figures 2012, Bucharest, Quality Barometer - 2010 The State of Quality in higher education in Romania, the Romanian Agency for Quality Assurance in Higher Education, The Romanian Statistical Yearbook, Chapter 8, Education, http://www.insse.ro/cms/files/pdf/ro/cap8.pdf http://www.insse.ro/cms/files/Anuar%20statistic/08/08%20Educatie_ro.pdf http://statistici.insse.ro/shop/

The table of the regression for the data presented can be found below.


Table of the regression model with five explanatory variables Table 2

554433221101ˆ xaxaxaxaxaay ∗+∗+∗+∗+∗+=

SUMMARY OUTPUT

Regression Statistics Multiple R 0,99224

R Square 0,98454 Adjusted R Square 0,97970

Standard Error 31,64867

Observations 22

ANOVA

df SS MS F Significance F

Regression 5 1020335,239 204067,0479 203,7332407 6,77207E-14

Residual 16 16026,21524 1001,638452

Total 21 1036361,455

Coefficients Standard Error T Stat P-value Lower 95% Upper 95% Lower

95,0% Upper 95,0%

Intercept -254,22707 295,16016 -0,86132 0,40179 -879,93865 371,48452 -879,93865 371,48452

X Variable 1 -4,99428 1,01501 -4,92045 0,00015 -7,14599 -2,84256 -7,14599 -2,84256

X Variable 2 1,05440 0,12028 8,76585 0,00000 0,79941 1,30939 0,79941 1,30939

X Variable 3 1,43615 0,94648 1,51735 0,14869 -0,57030 3,44260 -0,57030 3,44260

X Variable 4 2,43471 0,25523 9,53916 0,00000 1,89364 2,97578 1,89364 2,97578

X Variable 5 0,38832 0,73498 0,52834 0,60452 -1,16977 1,94640 -1,16977 1,94640

The result model is

543211 38.043.243.105.199.422.254ˆ xxxxxy ∗+∗+∗+∗+∗−−= Determination coefficient of 0.98

indicates that the model explains the variance of students enrolled annually in a proportion of 98%, and the correlation coefficient of 0.99 shows a very powerful correlation between the indicators.

It has to be noted that the variables X3 and X5 should be eliminated from the

model. Based on this, it can be concluded that the number of teachers and real wage indices does not significantly influence the number of students enrolled in Romania. At the beginning, the variable X3 will be eliminated, which represents the number of teachers. The regression will be performed again with the remaining variables.


Table of the regression model with four explanatory variables Table 3

5544221101ˆ xaxaxaxaay ∗+∗+∗+∗+= SUMMARY OUTPUT

Regression Statistics

Multiple R 0,99112

R Square 0,98231 Adjusted R Square 0,97815 Standard Error 32,83860

Observations 22

ANOVA

df SS MS F Significance F

Regression 4 1018029,105 254507,276 236,010 1,19207E-14

Residual 17 18332,349 1078,373

Total 21 1036361,455

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95,0%

Upper 95,0%

Intercept 183,35953 65,22739 2,81108 0,01202 45,74176 320,97730 45,74176 320,97730

X Variable 1 -4,33258 0,95101 -4,55576 0,00028 -6,33904 -2,32612 -6,33904 -2,32612

X Variable 2 0,99400 0,11777 8,43981 0,00000 0,74552 1,24248 0,74552 1,24248

X Variable 3 2,49335 0,26178 9,52470 0,00000 1,94105 3,04565 1,94105 3,04565

X Variable 4 -0,39897 0,54014 -0,73864 0,47020 -1,53855 0,74062 -1,53855 0,74062 The resulting model is yi = 183,35 − 4,33 ∗ x1 + 0,99 ∗ x2 + 2,49 ∗ x4 − 0,39 ∗ x5

The determination coefficient has remained 0.98 and indicates that the model explains the variance of students enrolled annually in a proportion of 98%. The correlation coefficient of 0.99 indicates a very powerful correlation between

indicators. However, it is noted that variable X5, which represents real wage indices, needs to be removed from the model as well. The regression is performed again for the remaining variables.


Table of the regression model with three explanatory variables Table 4

55221101ˆ xaxaxaay ∗+∗+∗+=

SUMMARY OUTPUT

Regression Statistics Multiple R 0,99083 Research Square 0,98174 Adjusted R Square 0,97870 Standard Error 32,42144 Observations 22

ANOVA df SS MS F Significance F

Regression 3 1017440,756 339146,919 322,644 7,87524E-16

Residual 18 18920,698 1051,150

Total 21 1036361,455

Coefficients Standard Error t Stat P-value Lower 95% Upper 95%

Lower 95,0%

Upper 95,0%

Intercept 143,0428 35,2589 4,0569 0,00074 68,966 217,119 68,966 217,119

X Variable 1 -3,9963 0,8243 -4,8477 0,00013 -5,728 -2,264 -5,728 -2,264

X Variable 2 0,9745 0,1133 8,5986 0,00000 0,736 1,212 0,736 1,212

X Variable 3 2,3367 0,1515 15,4225 0,00000 2,018 2,655 2,018 2,655

After obtaining the regression table, the model is:

5211 33,297,099,304,143ˆ xxxy ∗+∗+∗−= It is observed that the determination

coefficient of 0.9817 is close to 1, showing that the linear model is valid and the explanatory variables explain the dependent variable in a proportion of 98.17%. The multiple correlation coefficient of 0.9908 indicates a very strong correlation between the explanatory variables and the explained variable. The Fisher test value indicates a significant overall regression, Significance F, being very small.

By applying Fisher’s test, it may be observed, from the previous regression table, that 322,6.=F* This value compared with the theoretical Fisher value with 3 and 18 degrees of freedom, which for significance threshold α=5% is

15,3%51, ==

−−α

knkF . Because F* > Ftheoretical the alternative

hypothesis H1 is accepted, the overall regression is significant, and therefore the model is well constructed.


Fig. 1. Adjusting and forecasting curve for higher education institutions in Romania

The previously presented graph shows

the forecasting for the next two years. A slight increase in the number of higher

education institutions can be observed.

Fig. 2. Adjusting and forecasting of graduates in Romania during 1990-2014

As shown above, in the academic year

2007/2008 the number of university graduates has doubled as compared to the

previous year. It is noted that for the period 2012-2014

the number of graduates is on the increase.

Fig. 3. Adjusting and forecasting of students enrolled in Romania between 1990 – 2014


The graph above also shows, the adjusted values, which, starting from the year 2012, are separated into three directions which mark the lower and respectively the upper limit. Between them there is a punctual forecast for students, for the next two years. As expected, in the period 2012-2014 the number of students will increase from year to year.

4. Conclusions

The analysed phenomenon appeared and

was developed as a result of various causes, which may act in the same direction or in the opposite direction, usually with varying degrees of intensity.

In the studied situation, the evolution of the number of students enrolled in the national higher education system is the result of many influencing variables. Not all dependency ratios have the same significance, and for this reason two variables have been removed from the model (number of teachers and real wage indices).

Regarding the evolution of the number of students, it can be observed that, after a period of constant growth, a normal period of adjustment followed.

The Recorded significant increases can be explained mainly through the very fast development of the private segment, while the decrease that followed is due to demographic trends and the decrease in the number of high school graduates. However, the reduction of the places at “distance” learning at private universities may also have an important role.

The main objective of this analysis was to explain and forecast the evolution of the dependent variable (in this case, the number of students), depending on the independent variables (it refers to the number of higher education institutions, faculties and graduates). As it was expected, the general conclusion is that in the next period, 2012-2014, the number of students will increase constantly.

Other information may be obtained from the addresses:

[email protected] [email protected] [email protected]

References 1. Constantin, S., Petcu, N.: Statistică -

studii de caz (Statistics – Case Studies). Braşov. Infomarket, 2000.

2. Drăgoescu, R. M.: Transformări în sistemul de învăţământ superior din România după 1990 (Transformations in Higher Education System in Romania after 1990). In: Revista Română de Statistică, nr. 3/2013, p. 19.

3. Duguleană, L.: Metode de previziune economică (Methods of Economic Forecasting). Braşov. Ed. Universităţii “Transilvania” din Braşov, 2011.

4. Duguleană, L.: Bazele statisticii economice (Basis for Economic Statistics). Bucureşti. CH Beck Publisher, 2012.

5. Petcu, N.: Statistică (Statistics). Braşov. Ed. Universităţii “Transilvania” din Braşov, 2009.

6. *** Anuarul Statistic al României, Capitolul 8 – Educaţie (Statistical Yearbook of Romania, Chapter 8 Education)

7. *** Institutul Naţional de Statistică, Breviar Statistic, România în cifre 2012, Bucureşti (National Institute of Statistics, Breviary Statistically, Romania in figures 2012, Bucharest).

8. *** Quality Barometer – 2010. The State of Quality in higher education in Romania, the Romanian Agency for Quality Assurance in Higher Education

9. http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/. Accessed: March 2014.

10. http://statistici.insse.ro/shop/. Accessed: March 2014.

11. http://www.insse.ro/. Accessed: March 2014.

AUTHORS INDEX

A Ali Taha, V. ....................................... 185 Albu, R.G.. ........................................... 77 Antonoaie, C. ...................................... 67 Antonoaie, N. ...................................... 67 Antonoaie, V. ...................................... 71 Armăsar, P.I. ..................................... 141 B Bălăşescu, M. ........................................ 9 Bălăşescu, S. ....................................... 17 Băltescu, C. ....................................... 149 Beleaua, I.C. ........................................ 97 Boşcor, D. ......................................... 149 Brătucu, G. ................................ 115, 209 C Chiţu, I.B. ............................................ 25 Constantin, C. ...................................... 31 Constantin, S. .................................... 155 D Demeter, T. ............................... 115, 201 Dovleac, L. .......................................... 37 Duguleană, C. ...................................... 43 Duguleana, L. ...................................... 43 F Falola, H. O. ...................................... 161 Ferencova, M. ................................... 185 Funaru, M. ........................................... 53 G Guga, L. ............................................... 85

I Ispas, A. ............................................. 123 Ivan, M. ............................................... 77 M Madar, A. ...................................... 59, 89 N Neacşu, A.N. ................................. 59, 89 O Ojo, S.I. ............................................. 161 Opriş (Stănilă), M. .................... 201, 209 Osibanjo, A.O. .................................. 161 P Palade, A. .................................. 201, 209 Popa, B. ............................................. 131 Popescu, M. ......................................... 97 Pop-Radu, I. ...................................... 171 R Rada, D. ............................................ 123 Romih, D. .......................................... 179 S Sava, A. ............................................. 123 Sirkova, M. ........................................ 185 Sumedrea, S. ..................................... 107 T Tecău, A.S. .......................................... 25 Tescaşiu, B. ....................................... 193

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