New Approaches to CSR, Sustainability and Accountability, Volume I [1st ed. 2020] 978-981-32-9587-2, 978-981-32-9588-9

Table of contents :
Front Matter ....Pages i-xvi
Front Matter ....Pages 1-1
Introduction: Why Do We Need to Talk About Climate Change Risk as Accountants and Auditors Urgently? (Kıymet Tunca Çalıyurt)....Pages 3-10
Front Matter ....Pages 11-11
Sustainable Development in India: A Case Study of Vedanta (Renu Jatana, Mehjabeen Barodawala)....Pages 13-23
Implementation of Lean Management: Sustainability in the Construction Industry: The Case of Brazilian Companies (Alberto Eduardo Besser Freitag, Osvaldo L. G. Quelhas, Sergio Luiz Braga França, Marcelo Jasmim Meiriño)....Pages 25-44
The Importance of Sustainability and Sustainability Reporting (Zeynep Şahin, Fikret Çankaya)....Pages 45-59
Sustainable Development and Industry Revolutions (Meltem Okur Dinçsoy)....Pages 61-79
Sustainability Officer in Indonesia’s Palm Oil Companies (Elvia Ivada, Hasan Fauzi)....Pages 81-102
The Effects of Leadership Styles on Organizational Trust and Disclosure of Unethical Behaviors (Whistleblowing): A Practical Research (Feyza Çağla Oran, Agah Sinan Ünsar)....Pages 103-137
Front Matter ....Pages 139-139
Corporate Social Responsibility in Bulgaria: Perspectives and Possibilities (Diana Kopeva, Nikolay Sterev, Dimitar Blagoev)....Pages 141-158
Property Inheritance by Women in Kosovo (Simeana Beshi)....Pages 159-171
Women Rights for Sustainable Business and Entrepreneurship: Case from Balkan Area (Kıymet Tunca Çalıyurt)....Pages 173-192
The Relationship of Public Banks in Turkey with Sustainable Macroeconomic Factors (Başak Oktay Akın, Enver Erdinç Dinçsoy)....Pages 193-206
Cultural Profiles and Assertiveness of Women in Bulgarian Business Environment (Milen Baltov, Diana Sabotinova Mladenova)....Pages 207-224
Investing in Women’s Entrepreneurship: Inclusive and Sustainable Economic Growth (Arzu Özyol)....Pages 225-248
The Relationship Between Sustainable Economic Development and Tourism in Turkey: Panel Data Analysis (Dilek Tandoğan)....Pages 249-263
Back Matter ....Pages 265-271

Citation preview

Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application

Kıymet Tunca Çalıyurt Editor

New Approaches to CSR, Sustainability and Accountability, Volume I

Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application Series Editor Kıymet Tunca Çalıyurt, Iktisadi ve Idari Bilimler Fakultes, Trakya University Balkan Yerleskesi, Edirne, Turkey

This series acts as a forum for book publications on current research arising from debates about key topics that have emerged from global economic crises during the past several years. The importance of governance and the will to deal with corruption, fraud, and bad practice, are themes featured in volumes published in the series. These topics are not only of concern to businesses and their investors, but also to governments and supranational organizations, such as the United Nations and the European Union. Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application takes on a distinctive perspective to explore crucial issues that currently have little or no coverage. Thus the series integrates both theoretical developments and practical experiences to feature themes that are topical, or are deemed to become topical within a short time. The series welcomes interdisciplinary research covering the topics of accounting, auditing, governance, and fraud.

More information about this series at http://www.springer.com/series/13615

Kıymet Tunca Çalıyurt Editor

New Approaches to CSR, Sustainability and Accountability, Volume I

123

Editor Kıymet Tunca Çalıyurt Trakya University Edirne, Turkey

ISSN 2509-7873 ISSN 2509-7881 (electronic) Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application ISBN 978-981-32-9587-2 ISBN 978-981-32-9588-9 (eBook) https://doi.org/10.1007/978-981-32-9588-9 © Springer Nature Singapore Pte Ltd. 2020 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Acknowledgements

As the founder of the International Group on Governance Fraud Ethics and CSR, I would like to dedicate this book to the distinguished academician, 8th conference president Prof. Nauman Farooqi, Dean of Business and Social Sciences, Mount Allison University. https://isletme.trakya.edu.tr/pages/2017-konferans-kitabi. Prof. Dr. Nauman Farooqi has been attending International Conference on Governance Fraud Ethics and CSR as keynote speaker since 2010 and also acting as member in scientific committee. Prof. Nauman is the most recognized academician on Hawala System in the world. We would like to express our sincere respects and thanks to Prof. Dr. Nauman Farooqi for his support to our conference series. Kıymet Tunca Çalıyurt, CFE, CPA Book Series Editor

v

Contents

Part I 1

Overview

Introduction: Why Do We Need to Talk About Climate Change Risk as Accountants and Auditors Urgently? . . . . . . . . . . . . . . . . . Kıymet Tunca Çalıyurt

Part II

3

New Approaches in Sustainability

2

Sustainable Development in India: A Case Study of Vedanta . . . . . Renu Jatana and Mehjabeen Barodawala

3

Implementation of Lean Management: Sustainability in the Construction Industry: The Case of Brazilian Companies . . . . . . . Alberto Eduardo Besser Freitag, Osvaldo L. G. Quelhas, Sergio Luiz Braga França and Marcelo Jasmim Meiriño

13

25

4

The Importance of Sustainability and Sustainability Reporting . . . Zeynep Şahin and Fikret Çankaya

45

5

Sustainable Development and Industry Revolutions . . . . . . . . . . . . Meltem Okur Dinçsoy

61

6

Sustainability Officer in Indonesia’s Palm Oil Companies . . . . . . . . Elvia Ivada and Hasan Fauzi

81

7

The Effects of Leadership Styles on Organizational Trust and Disclosure of Unethical Behaviors (Whistleblowing): A Practical Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Feyza Çağla Oran and Agah Sinan Ünsar

Part III 8

New Approaches in CSR

Corporate Social Responsibility in Bulgaria: Perspectives and Possibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 Diana Kopeva, Nikolay Sterev and Dimitar Blagoev vii

viii

9

Contents

Property Inheritance by Women in Kosovo . . . . . . . . . . . . . . . . . . 159 Simeana Beshi

10 Women Rights for Sustainable Business and Entrepreneurship: Case from Balkan Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173 Kıymet Tunca Çalıyurt 11 The Relationship of Public Banks in Turkey with Sustainable Macroeconomic Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 Başak Oktay Akın and Enver Erdinç Dinçsoy 12 Cultural Profiles and Assertiveness of Women in Bulgarian Business Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 Milen Baltov and Diana Sabotinova Mladenova 13 Investing in Women’s Entrepreneurship: Inclusive and Sustainable Economic Growth . . . . . . . . . . . . . . . . . . . . . . . . . 225 Arzu Özyol 14 The Relationship Between Sustainable Economic Development and Tourism in Turkey: Panel Data Analysis . . . . . . . . . . . . . . . . . 249 Dilek Tandoğan Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265

Editor and Contributors

About the Editor Prof. Dr. Kıymet Tunca Çalıyurt, CPA, CFE graduated from the Faculty of Business Administration at Marmara University, Istanbul, Turkey. Her Masters and Ph.D. degrees are in the Accounting and Finance Programme from the Social Graduate School, Marmara University. She has worked as Auditor in Horwath Auditing Company, Manager in McDonalds and finance staff in Singapore Airlines. After vast experience in the private sector, she has started to work in academia. She is holding CFE and CPE titles. Her research interests are in accounting, auditing, fraud, social responsibility, corporate governance, finance and business ethics, with a special interest in aviation management, NGOs, women rights in business. She has been as visiting researcher in Massachusetts University Amherst Business School. She is the founder of the International Group on Governance, Fraud, Ethics and Social Responsibility (IGonGFE&SR) which was founded in 2009. In 2009, she also founded the International Women and Business Group, which organizes global, annual conferences. Kıymet has published papers, book chapters and books both nationally and internationally on fraud, social responsibility, ethics in accounting/ finance/aviation disciplines in Springer and Routledge. She is book series editor in Springer with the title Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, and book series editor in Routledge with the title Women and Sustainable Business. Some book titles: Emerging Fraud (with Sam Idowu), Corporate Governance: An International Perspective (with Sam Idowu), Women and Sustainability in Business: A Global Perspective, Sustainability and Management: An International Perspective (with Ulku Yuksel), Globalization and Social Responsibility (with David Crowther), Regulations and Applications of Ethics in Business Practice (with Dr. Jiang Bian), Ethics and Sustainability in Accounting and Finance, Volume I. She is acting as member in editorial board Journal of Financial Crime, Social Responsibility Journal, International Journal on Law and Management, Journal of Money Laundering Control. She is a regular speaker at International Economic Crime Symposium in Jesus College, Cambridge University.

ix

x

Editor and Contributors

She is member in editorial board Social Responsibility Journal, Journal of Financial Crime, International Journal of Law and Management. She is a partner of Herme Consulting in Trakya University Technopark.

Contributors Başak Oktay Akın Department of Banking and Insurance, Keşan Yusuf Çapraz School of Applied Sciences, Trakya University, Edirne, Turkey Milen Baltov Burgas Free University, Burgas, Bulgaria Mehjabeen Barodawala ICSSR, MLS University, Udaipur, Rajasthan, India Simeana Beshi Faculty of Law, FAMA College, Pristina, Kosovo Dimitar Blagoev University of National and World Economy, Sofia, Bulgaria Kıymet Tunca Çalıyurt Business Administration Department, Trakya University, Edirne, Turkey Fikret Çankaya Black Sea Technical University, Trabzon, Turkey Feyza Çağla Oran Kadir Has University, Istanbul, Turkey Enver Erdinç Dinçsoy Department of Banking, School of Applied Sciences, Trakya University, Edirne, Turkey Meltem Okur Dinçsoy Department of Economics, Faculty of Economics and Administrative Sciences, Trakya University, Edirne, Turkey Hasan Fauzi Center for Social and Environmental Accounting Research and Development (ICSEARD); Faculty of Economics and Business, Sebelas Maret University, Surakarta, Indonesia Sergio Luiz Braga França Fluminense Federal University, Rio de Janeiro, Brazil Alberto Eduardo Besser Freitag Fluminense Federal University, Rio de Janeiro, Brazil Elvia Ivada Faculty of Teacher Training and Education; Faculty of Economics and Business, Sebelas Maret University, Surakarta, Indonesia Renu Jatana UCCMS, MLS University, Udaipur, Rajasthan, India Diana Kopeva University of National and World Economy, Sofia, Bulgaria Marcelo Jasmim Meiriño Fluminense Federal University, Rio de Janeiro, Brazil Arzu Özyol Ankara University, Ankara, Turkey Osvaldo L. G. Quelhas Fluminense Federal University, Rio de Janeiro, Brazil Diana Sabotinova Mladenova Burgas Free University, Burgas, Bulgaria

Editor and Contributors

Nikolay Sterev University of National and World Economy, Sofia, Bulgaria Zeynep Şahin Black Sea Technical University, Trabzon, Turkey Dilek Tandoğan Karadeniz Technical University, Trabzon, Turkey Agah Sinan Ünsar Trakya University, Edirne, Turkey

xi

List of Figures

Fig. 2.1

Fig. 6.1 Fig. 7.1 Fig. 7.2 Fig. 7.3 Fig. 7.4

Fig. 8.1 Fig. 8.2 Fig. 8.3 Fig. 8.4 Fig. 8.5 Fig. 8.6

Sustainable developmentmodel. Source http:// sustainabledevelopment.vedantaresources.com/sustainabledevelopment/approach-and-strategy.html . . . . . . . . . . . . . . . . . Percentage of companies’ in each sustainability stage. Source The result of the data analysed by authors . . . . . . . . . . . . . . . Archetypal traits exhibited by a whistleblower. Reference Banerjee and Roy (2014, p. 10) . . . . . . . . . . . . . . . . . . . . . . . Newly developed advanced whistleblowing antecedent (process) model. Reference Banerjee and Roy (2014, p. 12) . Conceptual model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SEM model (v2/df = 3.324; NFI = 0.846; NNFI = 0.814; IFI = 0.887; CFI = 0.887; RMSA = 0.049; GFI = 0.801; AGFI = 0.785; PNFI = 0.805; and PGFI = 0.741) (AW explicit whistleblowing, DKL democratic leadership, DW external whistleblowing, EL ethical leadership, FW formal whistleblowing, IFW informal whistleblowing, IW internal whistleblowing, OL autocratic leadership, OG organizational trust, SL delegative leadership, YG managerial trust, ZW implicit whistleblowing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross domestic product (GDP) per capita by regions at NUTS 2 in Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchasing power standard (PPS) per capita by regions at NUTS 2 in Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchasing power standard (PPS) per capita by regions at NUTS 2 in Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unemployment rates from 15 to 74 years by regions at NUTS 2 in Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unemployment rates from 15 to 74 years by regions at NUTS 2 in Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rate of natural change of population by regions at NUTS 2 in Bulgaria (‰) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

..

20

..

99

. . 107 . . 108 . . 109

. . 114 . . 149 . . 149 . . 150 . . 150 . . 151 . . 151 xiii

xiv

Fig. 8.7 Fig. 8.8 Fig. 9.1 Fig. 10.1

Fig. 10.2 Fig. 10.3 Fig. 10.4 Fig. 11.1

Fig. 12.1 Fig. 12.2 Fig. 12.3

Fig. 12.4 Fig. 12.5 Fig. 13.1 Fig. 14.1 Fig. 14.2 Fig. 14.3

List of Figures

Rate of net migration by regions at NUTS 2 in Bulgaria (‰) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Participation rates in primary and lower secondary education by regions at NUTS 2 in Bulgaria (%) . . . . . . . . . . . . . . . . . . Structure of respondents in chart form . . . . . . . . . . . . . . . . . . Preferred salaries when men and women are up for the same role. Source 2017 Women, work, and the state of wage inequality, https://hired.com/gender-wage-gap-2017 . . . . . . . . Gender inequality index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Turkey’s rank in the human development index (HDI) . . . . . . Turkey’s rank in gender inequality index. http://hdr.undp.org/ en/composite/GII. Accessed May 15, 2019 . . . . . . . . . . . . . . . Average number of employees per bank. Source https://www. tbb.org.tr/Content/Upload/Dokuman/7349/TBB_sube_ personel_bilgi_notu_100316.pdf . . . . . . . . . . . . . . . . . . . . . . . EU-28 trends in employment rates, people aged 20–64, by gender [%] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of part-time to total employment by gender, 20–64, per Member State, 2017q3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in the proportion of women on the boards of the largest publicly listed companies in the EU, October 2010–October 2018 (percentage points) . . . . . . . . . . . . . . . . . Gender gap by country, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . Exploring the global gender gap index data . . . . . . . . . . . . . . Women entrepreneurship, innovation, and internationalization (Own elaboration of Verheul and Van Stel) . . . . . . . . . . . . . . Number of tourists arrived in Turkey in 2004 and 2017 on subregions basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total employment in Turkey in 2004 and 2017 on subregions basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Women employment in Turkey in 2004 and 2017 on subregions basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . 152 . . 152 . . 166

. . 176 . . 186 . . 187 . . 188

. . 203 . . 209 . . 211

. . 214 . . 215 . . 222 . . 235 . . 253 . . 254 . . 254

List of Tables

Table 3.1 Table 3.2 Table 3.3

Table Table Table Table Table

5.1 5.2 5.3 5.4 6.1

Table 6.2 Table 6.3 Table Table Table Table

6.4 6.5 6.6 7.1

Table 7.2 Table 7.3 Table Table Table Table Table

7.4 7.5 7.6 7.7 7.8

Table 7.9

Integration between lean and sustainability in construction industry, based on literature review . . . . . . . . . . . . . . . . . . . Ranking of lean construction practices . . . . . . . . . . . . . . . . . Conceptual framework between lean construction practices, lean tools/techniques for sustainability and their deployment phases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sustainable Development Goals . . . . . . . . . . . . . . . . . . . . . . Primary technological developments in Industry 1.0 . . . . . . . Primary technological developments in Industry 2.0 . . . . . . . Primary technological developments in Industry 3.0 . . . . . . . Annual report and sustainability report available in the IDX and company’s website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miller and Serafeim (2014) sustainability stage . . . . . . . . . . Framework for developing sustainability stage in Indonesian palm oil companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Example of triangulation made by researcher . . . . . . . . . . . . Characteristic of SO in Indonesian palm oil company . . . . . Sustainability score of Indonesian palm oil companies . . . . . Descriptive statistics of demographic characteristics of participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Explanatory factor analysis of the leadership scale . . . . . . . . Explanatory factor analysis of the organizational trust scale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Explanatory factor analysis of the whistleblowing scale . . . . Reliability analysis results of the scales . . . . . . . . . . . . . . . . Results of factor correlations. . . . . . . . . . . . . . . . . . . . . . . . . Results of the measurement model . . . . . . . . . . . . . . . . . . . . Structural model results and bootstrap confidence interval values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SEM model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

.. ..

33 35

. . . . .

. . . . .

38 64 67 68 72

.. ..

89 91

. . . .

92 92 94 97

. . . .

. . 109 . . 111 . . . . .

. . . . .

112 113 115 116 119

. . 121 . . 122

xv

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List of Tables

Table 7.10 Table 7.11 Table 7.12 Table 7.13 Table 7.14 Table 7.15 Table 9.1 Table 10.1 Table Table Table Table Table Table

11.1 11.2 11.3 11.4 11.5 13.1

Table 13.2 Table Table Table Table

14.1 14.2 14.3 14.4

Mann–Whitney U test result for sub-dimensions of leadership styles scale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mann–Whitney U test results of intergroup differences among leadership style scale . . . . . . . . . . . . . . . . . . . . . . . . . Mann–Whitney U test result for sub-dimensions of organizational trust scale . . . . . . . . . . . . . . . . . . . . . . . . . Mann–Whitney U test results of intergroup differences among organizational trust scale . . . . . . . . . . . . . . . . . . . . . . Mann–Whitney U test result for sub-dimensions of whistleblowing scale . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mann–Whitney U test results of intergroup differences among whistleblowing scale . . . . . . . . . . . . . . . . . . . . . . . . . Structure of respondents in table form . . . . . . . . . . . . . . . . . Shadow groups reports related to Cedaw regulatıons in Balkan area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Number of banks in Turkey according to their types . . . . . . Loan volumes in Turkish banking sector (in thousands) . . . . Deposit volumes in Turkish banking sector (in thousands) . . External debt and loan usage (million USD) . . . . . . . . . . . . Branch and staff information of public banks . . . . . . . . . . . . Differences of Women in Development (WiD) and Gender and Development (GaD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regional comparison on women’s participation in firm ownership, in management and as workers . . . . . . . . . . . . . . Variables used in panel data analysis and their definitions . . Levin, Lin and Chu unit root test results . . . . . . . . . . . . . . . Panel causality test results of total employment models . . . . Panel causality test result of total women employment models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . 122 . . 123 . . 126 . . 127 . . 129 . . 130 . . 166 . . . . . .

. . . . . .

178 195 197 197 200 203

. . 231 . . . .

. . . .

243 258 258 259

. . 260

Part I

Overview

Chapter 1

Introduction: Why Do We Need to Talk About Climate Change Risk as Accountants and Auditors Urgently? Kıymet Tunca Çalıyurt

As the International Group on Governance Fraud Ethics and CSR, we wrote this book while we were organizing the 8th conference in Canada and 9th conference in India. I would like to thank Prof. Nauman Farooqi, Dean of Business and Social Sciences and Prof. Harpreet Kaur, Head of Corporate Governance Department, National Law University for their hospitality. In this book, we have thirteen chapters around five countries: Turkey, Bulgaria, Indonesia, Brasil, and India. Our authors have discussed recent issues on sustainability and corporate social responsibility in their chapters. In four chapters, we focused on women in sustainability and corporate social responsibility. As an accounting professor, my plan is to have your attention on a very urgent issue, climate change risk and its management. Why? Because our world is dying… Most of the companies don’t pay attention to environmental problem, they don’t like to publish sustainability report, they don’t like to get training for their staff on environmental issues, they don’t like to measure and disclose carbon emission, etc. However, all of us know that irresponsible companies make environmental issues worse everyday therefore accountant and finance staff in companies have responsibilities to push managerial board and shareholders to include sufficient expenses about environmental issues in the budget continuously. Climate change is a change in the pattern of weather, and related changes in oceans, land surfaces, and ice sheets, occurring over time scales of decades or longer. (Australian Academy of Science 2019) Latest reports issued by the Intergovernmental Panel on Climate Change (IPCC) provide multiple lines of evidence that the global climate is changing as a consequence of the rapidly increasing atmospheric concentrations of greenhouse gases (IPCC 2013). The rate of greenhouse gases in the atmosphere started to increase after the industrial revolution that started in the 1750s, and the carbon dioxide rate increased by 40% to 280–394 ppm. According to the Intergovernmental Panel on Climate Change (IPCC), the increase in carbon dioxide is primarily due to the use of fossil fuels. An K. T. Çalıyurt (&) Business Administration Department, Trakya University, Edirne, Turkey e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability, Volume I, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_1

3

4

K. T. Çalıyurt

essential second factor is a change in land use, especially deforestation. The Intergovernmental Panel on Climate Change has shown that global average temperatures increase as a result of the impact of human activities on the atmosphere. According to the IPCC, 56% of the human-sourced greenhouse gas emissions in 2004 belong to the carbon dioxide produced by fossil fuel use. (www.wwg.org.tr) In the fight against climate change, the responsible companies (carbon majors) has more important role than others because it is known that hundred companies responsible for 71% of global emissions (Climate Accountability 2018). Climate change has become a critical environmental narrative of the twenty-first century. The climate is no longer just the subject of meteorologists that this is also one of the critical risk factors for the business world. The use of nature as a raw material to meet the inexhaustible needs of people and the failure to put this use in place have triggered climate change. Nowadays, there are new stakeholders besides creditors, tax authorities, shareholders, customers, and suppliers that companies need to account for environment and the future. In this chapter, we will focus on the effects of climate change on corporate governance especially the regulations, application, reporting, and accountability on accounting, finance, and auditing. These three areas, which provide the preparation of the financial statements and financial accountability of the companies, have been under severe pressure for many years about the environment. Sakhel (2017) stated that regulated industries implement more regulatory response measures than firms that are part of non-regulated industries, while, interestingly, there are no significant differences between the two groups in exposure and responses to physical and market risks. Some regulations and rationality about CCR are as follows; • International Federation of Accountants (IFAC) has presented a letter to United Nations Framework Convention on Climate Change (UNFCCC), IFAC issues its support of the UNFCCC’s facilitation of the forthcoming international climate negotiations at the 21st session of the Conference of the Parties (IFAC 2015). As the global organization for the accountancy profession, IFAC is advocating for a universal agreement and active international dialogue that encourages the transition toward resilient, low-carbon societies and economies. In addition to providing our commitment to climate action on long-term global emissions, IFAC is raising awareness of the important role played by the accountancy profession and professional accountants in facilitating governments, capital markets, and organizations to implement plans for climate change mitigation and adaptation. IFAC is comprised of over 175 Members and Associates in over 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce. • United Nations Global Compact (UNGC) also plays a prominent role in the sustainable development of the global climate, and new multilateral, bilateral, and domestic climate funds have emerged as well as growing private sector investments in clean technologies (Pickering et al. 2015). 13,483 institutions promised to UNGC for following 17 Sustainable Development Goals (SDGs)

1 Introduction: Why Do We Need to Talk About Climate …

5

that 381 companies among them primarily focused on Caring for Climate, 96 companies are Carbon Pricing Champions, 84 companies are in Responsible Climate Policy Engagement, but only one company is in Pathways to Low-Carbon and Resilient Development. • G20’s Financial Stability Board’s (FSB) has announced “Task Force on Climate-Related Financial Disclosures (TCFD)” which develops voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders (FSB 2018). The TCFD has received significant support from leading companies and organizations around the world since its voluntary recommendations were released in June 2017. The TCFD’s Final Report recommends to companies specific disclosures in four areas: a. Governance—an organization’s governance around climate-related risks and opportunities; b. Strategy—the actual and potential impacts of climate-related risks and opportunities on an organization’s businesses, strategy, and financial planning; c. Risk Management—how an organization identifies, assesses, and manages climate-related risks; d. Metrics and targets used to assess and manage relevant climate-related risks and opportunities. (TCFD 2018) • Another critical issue for the companies is carbon trade, pricing, and reporting that also carbon pricing is moving up the agenda for investors as a material risk that companies must consider in their decision-making which is mandated by the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (TCFD). • Recent global advances such as the 2015 United Nations Climate Change Conference (COP21) in Paris, the Kigali Amendment to the Montreal Protocol, and a pact to limit airline emissions under the International Civil Aviation Organization (ICAO) signal growing momentum toward a low-carbon transition. Platforms such as the U.N. Global Compact Business Leadership Criteria on Carbon Pricing, the World Bank’s Carbon Pricing Leadership Coalition, and business statements in support of the Paris Agreement illustrate that companies are preparing for this low-carbon future. • International Federation of Accountants (IFAC)’s subcommittee IAASB asks auditors to pay attention to environmental issues. According to IAPS 1010, “The Consideration of Environmental Matters in the Audit of Financial Statements,” the auditor needs to consider environmental matters in the audit of the financial statements. • International Financial Reporting Standards Foundation (IFRS) announces standards for accounting, however, as mentioned in Jagd’ s study (2017), the classic logic and virtues of the financial statement, according to the International Financial Reporting Standards (IFRS), can actually be reused and/or extended at least the following connotations to existing IFRS rules, for which the inner logic can be reused/extended through relatively simple means, thus obtaining quite

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good TCFD reporting for IFRS 7: Financial Instruments: Information, IFRS 9: Financial Instruments, IFRS 36 Impairment of Assets, and IFRS 37: Provisions, Contingent Liabilities and Contingent Asset. According to some studies, there are also difficulties in understanding and using of IPCC reports, IAS 36. Budescu and colleagues mentioned in their study (2009) “the judgment literature indicates that there are large differences in the way people understand such phrases and that their use may lead to confusion and errors in communication” and they made some recommendations in their study on this issue. • Integrated Reporting is supported by The International Integrated Reporting Council (The IIRC)’s mission is to establish integrated reporting and thinking within mainstream business practice as the norm in the public and private sectors. The IIRC responded to consultation on the FSB Task Force on Climate-related Financial Disclosures recommendations on 10 February 2017: “The IIRC welcomes the recommendation that companies should ‘integrate’ their risk management in the face of the threat of climate change, made in the report from the FSB Task Force on Climate-related Financial Disclosures. The IIRC believes that genuine action to combat climate change can only be achieved by extending the disclosure horizon. We are committed to supporting efforts to align the Task Force recommendations with existing attempts to improve corporate governance by extending accountability for the management of multiple, interconnected resources and relationships. The implementation of these recommendations should lead to a fundamental realignment of corporate and investment behaviours and decision-making, as well as acting as a catalyst for a more cohesive and aligned corporate reporting system” (IIRC 2017). However, ultimately, the climate change risk (CCR) is one of the risk should be considered by companies. Disasters caused by climate change are reflected in the financial statements. Due to disasters such as floods, whirlwind, freezing, tsunami, ice rains, the loss of the assets of the companies, the cancelation of the contracts, the loss of the customers requires the strategic decision of the management. CPA, CFO, external auditor, internal auditor, board, CFE, the actuary will be active in the process of budgeting, accounting, reporting, and inspection of CCR applications because they should govern, record, measure, and report environmental issues. Corporate boards and executive management needs to understand, decide, and implement new strategies against climate change risks that previous literature suggests classification in three categories: Physical risks, Regulatory risks, and Market risks (Busch et al. 2012; Elijido-Ten 2017; Nikolaou et al. 2015). Managerial boards and also the auditing committees in the companies should ensure that environmental reporting is “subject to internal governance processes that are the same or substantially similar to those used for financial reporting”. This will probably mean that some boards should be supplemented with new skill levels, and that audit and corporate governance structures should be upgraded in the nonfinancial area (PDF) TCFD = IFRS + Climate Risks (Jagd 2017). However, managers and corporate understanding of climate change and related energy issues remains fragmented, incomplete, and lacks the urgency this problem deserves

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(Busch and Shrivastava 2011). The international climate change regime started very constructively, although there has been progressing over the last 25 years, this progress falls short of what is needed to address the climate change problem. (Gupta 2016) The most important problem about “climate change management risk” in business is the estimate of time, place, amount, style of climate damage to the companies and its properties. Proactive methods are recommended to corporate boards and management, and also they need to redesign management system by “wearing eyeglass with climate perspective.” Recent developments, problems on CCR in corporate governance, accounting, finance, and auditing are listed in following but of course issues are not limited. It is easy to see that “climate change risk and its management” is an emerging issue in accounting that professionals need to spend time and money. • Determining and addressing physical risks, regulatory risks, market risks on CCR by publicly held companies, • Rewriting corporate strategies against CCR, • Developing a budget, plan, and program against CCR, • Training accounting, finance, and auditing staff on environmental issues, sustainability and CCR, • Sustainability reporting for CCR, • Valuating CCR, • Budgeting precautions against CCR, • Estimating the cost of CCR • External Auditor planning, auditing, documenting on CCR, • Governing, measuring, reporting on corporate energy efficiency and corporate carbon footprint, • Investment decision against CCR, • Application of IFRS 7: Financial Instruments: Information, IFRS 9: Financial Instruments, • IAS 37: Provisions, Contingent Liabilities, and Contingent Assets and IAS 36 Impairment of Assets for CCR, • • • • • • • • •

What is the role of the external auditor and auditing committee against CCR? How does external auditor will audit CCR, sustainability reporting? What is the role of the International Financial Reporting Standards (IFRS)? Difficulties in understanding and interpreting the Task Force on Climate-Related Financial Disclosures (TCFD), IAS 6, IAS 7, IAS 37, IAS 36? Information system for CCR The differences in approaching environmental and climate change managerial issues between developed, developing under developed countries, Classifying, valuating, booking, reporting stranded assets, Evaluating, classifying, addressing CCR in integrated reporting (IR) and role of accountant, auditor in preparing IR. Fraud examination on CRR valuating, planning, budgeting, costing, reporting, auditing.

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The Synthesis Report confirms 95% certain that humans are the main cause of the current global warming. (IPCC 2014) If the company management doesn’t want to damage the nature, they have to pay attention to environmental issues. Top executives and employees of the company should follow the latest regulations regarding climate change even if it has not been announced as company policy. I would like to finalize my chapter with an example from the construction sector. In one of our book published in book series, Prof. Vassigh recommends that building design, development, and construction are an interdisciplinary endeavor and effective collaboration among various domain experts is critical to the sustainability and resiliency of the environment. Recent scientific research has established that climate change is primarily due to human activities that produce heat-trapping gas emissions. These emissions are mostly a result of burning fossil fuels, changing land use, deforestation, and other activities. Research also shows that among all human activities contributing to climate change, the construction and operation of buildings are among the most energy, pollution, and resource intensive. In the USA alone, buildings and their operations consume three billion tons of raw materials, 40% of the nation’s total energy, and 77% of its electricity use each year. Materials utilized in constructing buildings have high embodied energy, high carbon emissions, and high levels of toxins and pollutants in their production cycle (UNEP 2007). It is estimated that buildings contribute as much as one-third of total global greenhouse gas (GHG) emissions primarily through the use of fossil fuels during their operational phase (UNEP 2009). Vassigh (2018, 88)

Difficult but the most important part is to convince management to include climate risk costs in the budget.

References Australian Academy of Science. (2019). What is Climate Change? https://www.science.org.au/ learning/general-audience/science-booklets-0/science-climate-change/1-what-climate-change. Accessed on January 9, 2019. Budescu, D. V., Broomell, S. B., & Han-Hui, P. (2009). Improving communication of uncertainty in the reports of the intergovernmental panel on climate change. Psychological Science. Busch, T., Berger, S. G., & Paquin, R. (2012). Managing for climate risk. In D. R. Gallagher (Ed.), Environmental leadership: A reference handbook (pp. 527–535). Thousand Oaks: SAGE. Busch, T., & Shrivastava, P. (2011). The global carbon crisis. UK: Greenleaf Publishing. Climate Accountability Institution. (2018). http://climateaccountability.org/carbonmajors.html. Accessed on January 5, 2019. Elijido-Ten, E. O. (2017). Does recognition of climate change related risks and opportunities determine sustainability performance?. Journal of cleaner production, 141, 956–966. Accessed on January 10 2017. Financial Stability Board (FSB). (2018). Task force on climate-related financial disclosures, https://www.fsb-tcfd.org/about/#. Accessed on January 20, 2019. Gupta, J. (2016). Climate change governance: History, future, and triple-loop learning? Wiley Interdisciplinary Reviews: Climate Change, 7(2), 192.

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Intergovernmental Panel on Climate Change (IPCC). (2013). Climate change 2013: The physical science basis. Cambridge: Cambridge University Press. International Auditing and Assurance Standards Board (IAASB). (2019). Auditing standard which is mandatory for independent auditors Practice statement 1010 the consideration of environmental matters the audit of financial statements. http://www.ifac.org/system/files/ downloads/b007-2010-iaasb-handbook-iaps-1010.pdf. Accessed on January 14, 2019. International Federation of Accountants (IFAC). (2015). IFAC and climate action: Letter of support to the UN framework convention on climate change. https://www.ifac.org/ publications-resources/ifac-and-climate-action-letter-support-un-framework-conventionclimate-change. Accessed on January 12, 2019. International Financial Reporting Standards Foundation. (2017, November). Wider corporate reporting, Staff Paper, IASB Agenda ref 28B. https://www.ifrs.org/-/media/feature/meetings/ 2017/november/iasb/wider-corporate-reporting/ap28b-update.pdf. Accessed on January 15, 2019. IPCC. (2014). Climate change 2014: Synthesis report. Contribution of working groups I, II and III to the fifth assessment report of the intergovernmental panel on climate change. In R. K. Pachauri, & L. A. Meyer (Eds.), (p. 151). Geneva, Switzerland: IPCC. Retrieved September 5, 2017 from http://www.ipcc.ch/pdf/assessment-report/ar5/syr/SYR_AR5_FINAL_full_ wcover.pdf. Accessed on March 5 2019. Jagd, J. T. (2017). TCFD = IFRS + Climate risks, revision and Regnskabsvæsen (Vol. 9). Karnov Group. Nikolaou, I., Evangelinos, K., & Leal Filho, W. (2015). A system dynamic approach for exploring the effects of climate change risks on firms’ economic performance. Journal of cleaner production, 103, 499–506. Pickering, J., Jotzo, F., & Wood, P. J. (2015). Sharing the global climate finance effort fairly with limited coordination. Global Environmental Politics, 15(4), 39–62. Sakhel, A. (2017). Corporate climate risk management: Are European companies prepared. Journal of Cleaner Production, 165(1), 103–118. Sustainability Accounting Standards Board (SASB). (2017). Converging on climate risk: CDSB, the SASB, and the TCFD the emerging alignment of market-based approaches to climate-related financial disclosure September 2017. https://www.cdsb.net/sites/default/files/ sasb_cdsb-tcfd-convergingonclimaterisk-091317-web.pdf. Accessed on January 20, 2019. TCFD. (2018). Core elements of recommended climate-related financial disclosures. https://www. tcfdhub.org/home/recommendations. Accessed on January 10, 2019. The International Integrated Reporting Council. (2017). IIRC responds to FSB task force on climate-related financial disclosures. http://integratedreporting.org/news/iirc-responds-to-fsbtask-force-on-climate-related-financial-disclosures/. Accessed on January 7, 2019. UNEP PH. (2007). Building and climate change. Status Challenges And Opportunities. United Nations, Environment Program, Sustainable Consumption and reduction Branch, illustrated edition. UNEP DTIE Sustainable Consumption & Production Branch. (2009). Buildings and climate change: A summary for decision-makers. Paris, France: UNEP. Retrieved by CAKE http:// www.cakex.org/virtual-library/885. Vassigh, S. (2018). Complexity of sustainable and resilient building design and urban development. Sustainability and social responsibility of accountability reporting systems. A Global Approach, Book Series: Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, Springer Nature Singapore Pte Ltd.

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Recommended Readings Filling the information black hole: How are fossil fuel companies reporting on the stranded asset risk? https://www.accaglobal.com/content/dam/ACCA_Global/Technical/oil-gas/ea-strandedassets.pdf. Integrated reporting and climate change: A perfect marriage. https://www.ifac.org/globalknowledge-gateway/business-reporting/discussion/integrated-reporting-and-climate-change.

Kiymet Tunca Caliyurt CPA, CFE, graduated from the Faculty of Business Administration at Marmara University, Istanbul, Turkey. Her Masters and Ph.D degrees are in Accounting and Finance Program from the Social Graduate School, Marmara University. She has worked as Auditor in Horwath Auditing Company, Manager in McDonalds, and Finance Staff in Singapore Airlines. After vast experience in private sector, she has started to work in academia. She is holding CFE and CPE titles. Her research interests are in accounting, auditing, fraud, social responsibility, corporate governance, finance, and business ethics, with a special interest in aviation management, NGOs, women rights in business. She has been as visiting researcher in Massachusetts University Amherst Business School. She is the Founder of the International Group on Governance, Fraud, Ethics and Social Responsibility (IGonGFE&SR) which was founded in 2009. In 2009, she also founded the International Women and Business Group, which organizes global, annual conferences. Kiymet has published papers, book chapters, and books both nationally and internationally on fraud, social responsibility, ethics in accounting/finance/aviation disciplines in Springer and Routledge. She is book series editor in Springer with the title Accounting, Finance, Sustainability, Governance, and Fraud: Theory and Application, and book series editor in Routledge with the title Women and Sustainable Business. Some book titles: Emerging Fraud (with Sam Idowu), Corporate Governance: An International Perspective (with Sam Idowu), Women and Sustainability in Business: A Global Perspective, Sustainability and Management: An International Perspective (with Ulku Yuksel), Globalization and Social Responsibility (with David Crowther), Regulations and Applications of Ethics in Business Practice (with Dr. Jiang Bian), and Ethics and Sustainability in Accounting and Finance, Volume I. She is acting as member in editorial board Journal of Financial Crime, Social Responsibility Journal, International Journal on Law and Management, Journal of Money Laundering Control. She is a regular speaker at International Economic Crime Symposium in Jesus College, Cambridge University. She is member in editorial board Social Responsibility Journal, Journal of Financial Crime, International Journal of Law and Management. She is a partner of Herme Consulting in Trakya University Technopark.

Part II

New Approaches in Sustainability

Chapter 2

Sustainable Development in India: A Case Study of Vedanta Renu Jatana and Mehjabeen Barodawala

Abstract From the time of barter system to the modern era of plastic money, the mankind has travelled an impressively long journey. Undeniably, “profitability” has been the major source behind all the efforts being made by the business in particular and society in general. This profit motive has not only benefited in the form of growth and development of present and future generation but has also supported the growth of cut throat competition and business rivalries which has threaten the peaceful co-existence of business and society. Hence, business houses have realized that they would have to raise over and above the profitability and take care of all those associated with their survival in the society directly or indirectly. This realization resulted in the evolution of the concept of Sustainable Development. This research paper moves around developing an understanding about the Sustainability, exploring into its concept and finding out its scope taking the case study of the Vedanta which has demonstrated the sense of responsibility towards the upliftment of common masses and protection of the environment and sustainable development of the nation for today as well as tomorrow.










Keywords Sustainable development Economic growth Sustainability Economic development Social welfare Social development and vedanta




2.1




Introduction

Economic growth, development and sustainability along with growing population and its never gratifying needs and demand are a matter of great concern nowadays for many countries including India. In order to satisfy the increasing demand of population, greater exploitation of available resources is required which exert R. Jatana UCCMS, MLS University, Udaipur, Rajasthan, India M. Barodawala (&) ICSSR, MLS University, Udaipur, Rajasthan, India e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability, Volume I, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_2

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additional burden not only on the aggregate resource base of the economy harming the environment but also the need and interest of the future generation. In order to overcome this problem, economists and business houses come up with an idea of economic development along with sustainability which they termed as Sustainable Development. The concept of Sustainable Development is a process of economic development which not only concentrates on the needs of present generation but also works to safeguard the interest and ability to meet the needs for future generation. Hence, it is assumed that the Sustainable Development is broader in scope and has greater significance in comparison to Economic Development as it talks about environment in general and exploitation, allocation and utilization of environmental resources in particular. The previous studies and research on sustainability seem heavily focused on the developed western markets (ef. Birch 2003; Moon 2002; Regelbrugge 1999). However, reliability of these findings is often inappropriate on emerging Asian markets, and sustainability research focusing exclusively on the emerging market setting is insufficient (Sharma 2002). Moreover, empirical evidences from existing literature support the assumption that the firms in the emerging Asian markets are lagging behind in their sustainability agenda in comparison of Europe (ef. Welford 2004). However, the potentiality of such incidental studies is wide in range, and they are expected to contribute significant outputs. Hence, with a view to further assimilate the sustainability agenda in the core business research as well as practices and generate a solid base of empirical evidences, it is crucial to expand sustainability research in India, which is not only one of the highly emerging Asian market but also one of the fastest growing economies of the world. Indian economy has been undertaking the planned efforts to speed up its economic development. This necessitates assessing the state of Sustainable Development in India and the efforts of the state of Indian economy in this direction. It is against this overall backdrop, the present paper endeavours to the empirical evidences of Sustainable Development with reference to Vedanta, the only Indian natural resources company with a Sustainable Development Report. The main purpose and objective of this paper is to know how the Vedanta has achieved Sustainable Development; what specific activities, programs and strategies it has set, devised and implemented for the same.

2.2

Sustainable Development in Indian Context

In recent years efforts have been made to map the terrain of Sustainable Development in the way it is being practised and perceived in India. However, consultants (Kumar and Balsari 2001; British Council et al. 2002) and non-profit organizations (CSM 2001; PiC 2004) have mainly conducted studies exploring corporate level Sustainable Development in India. Apart from a marginal instance

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(Mohan 2001; Ruud 2002), Sustainable Development research with academic rigour is still lacking in India. In order to have a comprehensive understanding on the aspects of Sustainable Development perceptions and practices in India, it is imperative to discuss influence that the nature of Indian economy—especially the Economic Reforms of 1990s—has had on Indian Sustainable Development practices.

2.2.1

Influence of the Indian Economic Reforms on Sustainable Development

According to Chong (2002), the post independence history of Indian economy can be divided into three phases. The first phase (1947–1966) was motivated by the goal of building a solid industrial base (Sawhney 2004) and was characterized by nationalization of heavy industries. This led to a highly centralized economy (Davies 2002) and saw a rapid growth in capital intensive manufacturing plants. While featuring protectionism for these home-grown industries (Nag et al. 2003), the national 5-year economic plans did not have any provisions to offset environmental damages, and as a result industrial base came at the cost of ecological capitals (Sawhney 2004). However, corporate philanthropy practices flourished during this period (Mohan 2001), contributing in building a firm base for the social sustainability efforts in later years. The second phase of development (1966–1991) shifted its focus back on the traditional agrarian society and exhibited the modernization of Agricultural Production Technologies (Chong 2002). Protectionism continued, and MNCs faced many restrictions in their activities (Nag et al. 2003). In the 1970s, India began to adopt industrial pollution control measures, and the first set of environmental regulations began to emerge (Sawhney 2004). However, implementation and enforcement of these laws have not been comprehensive. The Ministry of Environment and Forests was established at the wake of the Bhopal disaster in 1984. The Environmental Protection Act was enacted in 1986, followed by a number of related environmental regulations (Divan and Rosencranz 2001). The third phase in 1991 brought great economic reforms in India, with the home market finally opening up to the world economy (Chong 2002). This liberalization also the government officially including Sustainable Development in the growth agenda (Sawhney 2004). As a result, domestic environmental protection policies to revert the damages done over the previous four decades were formalized in an Environmental Action Plan (Sawhney 2004). India’s accession to the World Trade Organization (WTO) meant that Indian firms also thrived to meet international benchmarks in their operations, products and processes (Ghoshal et al. 2001). Greater level of privatization thus resulted in increased foreign trade, meeting the international ecological and social sustainability standards.

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MNCs and Sustainable Development in India

Empirical evidence also shows conflicting evidence on the role of MNCs in this context. Ruud (2002) opines that the multinational corporations in India are the drivers of the sustainable development agenda. They act in a more environmentally sustainable manner than local companies do and follow stricter standards in accordance with their headquarters in the West. As a result, sustainable business practices often threaten the competitive advantage for the MNCs that are more responsible. However, Mohan (2001) finds no discernible differences between the sustainable development policies of MNCs and local companies in India. This finding is corroborated by Sawhney (2004). The survey by Kumar and Balsari (2001) reveals the existence of the general perception that “MNCs are not giving their due to the Indian society” (Kumar et al. 2002, p. 1). Thorpe and Prakash Mani (2004) essentially convey the same message in a more neutral tone, saying that a MNCs in India view sustainable development only as a risk management issue, with little integration in the core management practices. Another study shows that MNCs in India only practise sustainable development partially and hardly engage in policies and practices in tune with their parent companies in Europe. Kumar et al. (2002) opined that very few MNCs actively pursue sustainable development measures and reported that the public perception of MNCs concerning trustworthiness in general is very low. In fact, MNCs rated responsible in India were graded upon their good quality products and services’, ‘trusted brand’, ‘good company’ and ‘personal knowledge about the company’ and not based on the social and environmental performances (Kumar et al. 2002). To sum up, although there have been some specific initiatives taken by certain corporations, the propagation still seems restrained and chaotic. Therefore, the roles of (both local and multinational) corporations in India with relation to sustainable development remain ambiguous, vague, controversial and unsolved. The existence of conflicting evidences (e.g. Ruud 2002; Kumar and Balsari 2001) among studies from Indian companies clearly shows that their role in the context of sustainable development is yet to be determined.

2.3

Vedanta and Sustainable Development

Vedanta Resources PLC is a London Stock Exchange listed, globally diversified and natural resources company with interests in zinc, lead, silver, copper, iron ore, aluminium, power, and oil and gas. The company is principally owned by Indian billionaire Anil Agarwal through Volcan Investments, a holding vehicle with a 601.7% stake in the business. Its operational footprints span four continents encompassing India, Zambia, Namibia, South Africa, Liberia, Ireland, Sri Lanka and Australia.

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Company’s Brief History

The company was established by Anil Agarwal in Mumbai (than Bombay) in 1976 by the name Sterlite Industries. Later on, in 1986, he endowed Vedanta Resources bringing together a variety of businesses owned by the family. It was first listed on London Stock Exchange in 2003 when it raised $876 million through an Initial Public offering. Thereafter in 2006, it acquired Sterlite Gold, a gold mining business. It raised an additional $2 billion through an ADR issue in 2007. In 2008, it bought $26 billion of the assets of Asarco, a copper mining business. In December 2011, it announced the US$8.67 billion acquisition of Cairn India, a subsidiary of Crain Energy, heralding its foray in the oil sector.

2.3.2

Company’s Vision and Core Values

Vedanta is a globally diversified natural resources company with low-cost operation. With the business model of growth, constant value creation and improved operations, the company’s vision is focused towards building the wealth of the shareholders and sustainably engaging the community they operate in. Accountability being a core characteristic of Vedanta’s work philosophy, their long-term business approach adopts best practices towards fulfilling vital customer needs in a safe and responsible manner. The company demonstrates world-class standards of governance, safety, sustainability and social responsibility.

2.3.3

Sustainable Development and Community

The organization seeks to add and share value through everything that they do. As a business, they make a considerable economic impact; through employment, payment of taxes, royalties and other contributions to local, state and national governments. They also build local infrastructure that benefits local communities in the form of roads, schools and healthcare centres. They play a significant role in growing local skills and in the development of local infrastructure, including roads, sanitation, education and medical facilities. They made a community investment of Rs. 160 crores in 2015–2016, reaching around 1.75 million people and providing support for schools, hospitals, health centres and farmers. They also contributed Rs. 20,600 crores to the Indian exchequer through direct and indirect taxes, royalty and oil tax. As a responsible corporate citizen, the Company focuses on community development through its CSR activities. Their community activity is delivered at a local, regional and state/national level to ensure that the business is able to effectively maximize its impact in facilitating socio-economic development. The majority of

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their initiatives are carried out in collaboration with community organizations and are developed in partnership utilizing a needs-based approach to community investment, underpinned by the use of ‘Public–Private–People–Partnership’ (4Ps) model. Fundamentally, they work to help communities identify their priorities through externally delivered needs assessment programs and then work closely with them to design programs that seeks to make progress towards meeting these. In order to maximize the outcomes and impacts that the business can have, they focus on the following seven key areas through their community investment activities. • Health, Nutrition and Sanitation These activities include the delivery of medical infrastructure such as the hospitals that run across the group. These hospitals are supported by medical outreach services, which include mobile health vans and medical outposts to enable isolated ruler communities’ access to medical services. Ten Ruler Health Posts and 16 Medical Health Units and other outreach programs covered 1.8 lakh people in year 2015–16. • Education The work for children’s education is targeted at the pre-school level, particularly through VBCA project-Integrated Child Development Scheme (ICDS), which is the centrally sponsored scheme of the government of India aimed at providing services to pre-school children in rural, tribal and slum areas in an integrated manner so as to ensure their proper growth and development. In addition to pre-school support, they also support a mid-day meal programme through eight centralized kitchens, aimed at improving the health status of children from Class I to VIII in government-aided schools as well as encouraging regular attendance at school. • Sustainable Livelihood Farmers are being educated about yield improvements in order to maximize their returns by providing access to high-yield seeds and fertilizers, soil testing, watershed management and cultivation. Vocational training to youth in employable skills imparted through BPO Industrial Stitching benefited more than 770 youth. • Women Empowerment The company is able to assist in creating sustainable development through supporting initiatives that have women‘s empowerment at their heart. In addition to bringing women together in collaborative forums, the group dynamics and collective spirit create informal structures of support helping to create sustainable small businesses as well as enhancing the bargaining power of members. The programs cover over 22,000 women including a federation ‘Subalakshmi’ for 2700 women. • Community Asset Creation The initiatives enable the planning and development of infrastructure to improve the lives of communities surrounding the operations, for example creating several community welfare assets, which include building roads, community

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centres, wells, classrooms and drainage network across the areas of operation. The program benefits potentially 1.7 lakh people for whom the assets have been created. • Bio-investment Restoring and improving natural systems is key to the Bio-Investment Programme. Under bio-investment initiatives, the leftover food waste is converted into organic manure through the organic waste converter plant at mid-day meal kitchens. Other initiatives include: watershed management, social forestry, cattle breed improvement and cash crop framing. • Integrated Village Development The core objective of integrated Village Development Programme (IVDP) is enabling the holistic development of villages surrounding the operations. Under IVDP, villages are identified for assistance, and in collaboration with NGOs, government authorities and the village, an integrated development plan is prepared. The plan usually results in the development of infrastructure, including health and education support, along with environmental planning and the implementation of Sustainable livelihood programmes. From commencement of the IVDP to handover, the process takes between 3 and 5 years. This project has matured, and now presently, their intervention is in 2 villages covering 4000 people. Sustainable development is a core element of the company’s guiding strategy and supports their growth as a diversified natural resources company. This includes the activities they undertake across the operations to ensure the health and safety of their people; how they make valuable economic and social contributions to communities and regions where they operate; and how they manage environmental footprint. Their active engagement and deep understanding of the countries, communities and environments where they operate, combined with their Tier 1 assets, form the foundation of their business strategy and position their group to create value for their shareholders and other stakeholders. Sustainability model of the company was developed in financial year 2011–2012 which comprises four pillars—Responsible Stewardship, Building Strong Relationships, Adding and Sharing Value and Strategic Communications—each designed to support their long-term sustainability as a world-class diversified natural resource company, providing superior returns to their shareholders. These four pillars capture the processes and activities they undertake to ensure their future (Fig. 2.1). • Responsible Stewardship Responsible Stewardship means having effective and appropriate business processes, including robust compliance and risk management, protecting the health and safety of the employees and responsibly managing the environmental and social impacts.

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Fig. 2.1 Sustainable developmentmodel. Source http://sustainabledevelopment.vedantaresources. com/sustainable-development/approach-and-strategy.html

• Building Strong Relationships Building strong relationships captures the engagement with the people and organizations that are interested in the business. Doing this effectively can lead to the identification of new areas where they can find and unlock additional value as well as equipping them to foresee and appropriately main challenges. • Adding And Sharing Value Adding and Sharing Valueencapsulates the direct and indirect positive economic impact they make, by investing in people through employment, building infrastructure, developing technology and the payment of taxes, royalties and other payments to local, state and national governments. Additionally, it captures the value they offer by turning the knowledge and ideas sourced through engagement with their stakeholders into specific projects, including collaborating with governments and NGOs to bring value to the communities that host their operations. • Strategic Communications The Strategic Communication pillar interlocks with the other three pillars of the model and is the guiding principle which enables the organization to engage

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with their stakeholders in a transparent dialogue. This pillar is the vital element of sustainable development, in implementing and strengthening their ‘licence to operate’ efforts. This pillar further reflects their commitment to becoming a more transparent and responsible corporate citizen. The fourth pillar Strategic Communications was added in financial year 2014– 2015, which reflects their commitment to becoming a more transparent and responsible corporate citizen. This also reflects their emphasis on their principles of community dialogue and mutual respect, including free prior informed consent to access natural resources. Governance and Sustainable development are at the core of Vedanta’s strategy and they provide a platform to promote equal opportunities, with a focus on Education, Healthcare and Women Empowerment. The approach of community development is holistic, long term, integrated and sustainable. The community engagement process, alongside baseline studies and needs assessments, is embedded in the organization through the Sustainability Framework which is aligned to International Standard like IFC, ICMM and OECD guidelines. The Vedanta sustainability Assurance Program (VSAP) is used to monitor the effectiveness of sustainability framework implementation at a group level. The company positively impact livelihoods, through healthcare, education and skill development platforms, drawing on the company’s ‘Social Licence to Operate’. The company demonstrates world-class standards of governance, safety, sustainability and social responsibility, with a strong commitment to People, Planet and Prosperity. Their key programmes are the ones in which they support local governments. In 2015–2016, the company partnered with over 200 NGOs, schools, academic and government bodies to provide platforms promoting education, livelihood, healthcare, women empowerment and biodiversity conservation. Vedanta invested INR 160 crores, to benefit 1.75 million people in India–Africa in financial year 2015–16. The company’s Sustainable Development model benchmarks global best practice and helps them to uphold the consistency in the community investment approach. The approach draws from UN’s Millennium Development Goals (MDGs) and at the same time aligns with the development agenda of the country and resonates with Vedanta’s core values of trust, entrepreneurship innovation, excellence, integrity, respect and care, aligns with the development agenda of India.

2.4

Conclusion

For bringing back and maintaining the general balance in the economic and social arena, it is evident to think deeply and act wisely about sustainable development. Every business house owes some responsibility towards the society, nation and world in general which provide it with all human, material and natural resources. Considering the long run growth and sustainable development following the norms

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R. Jatana and M. Barodawala

of Sustainability, devising new policies and effective implementation is inevitable to bring and sustain a balance between corporate world and society, present generation and upcoming generation, man and nature. As far as the Vedanta is concerned, it has gone a long way in fulfilling its duty and responsibility towards the society and the nation by embedding sustainability in the DNA of company. It has reached the masses to elevate their lives, to nurture their dreams and to enhance their skills justify the philosophy of the founder, “businesses flourish, grow and evolve within communities, so corporate have a core responsibility to contribute substantially to the welfare of the community that has supported them to grow and prosper.”

References Birch, D. (2003). Corporate social responsibility: Some key theoretical issues and concepts for new ways of doing business. Journal of New Business Ideas and Trends, 1(1), 1–19. BritishCouncil, UNDP, Confederation of Indian Industries, & PricewaterhouseCoopers. (2002). Corporate Social Responsibility Survey India 2002. New Delhi. Chong, L. (2002). Business environmental and opportunities in India: Bangalore and its surrounding regions, international management series. St.Gallen: St. Galler Business Books and Tools. CSM. (2001). Corporate social responsibility: Perceptions of Indian business. Kolkata: Centre for Social Markets. Davies, R. (2002). Corporate citizenship and socially responsible investment: Emerging challenges and opportunities in Asia. Paper Presented at the Conference of the Association for Sustainable and Responsible Investment in Asia, July 10, 2002. Honk Kong. Divan, S., & Rosencranz, A. (2001). Environmental law and policy in India: Cases, materials and statutes (2nd ed.). New Delhi: Oxford University Press. Ghoshal, S., Piramal, G., & Budhiraja, S. (2001). World class in India: A casebook of companies in transformation. New Delhi: Penguin Books India. Kumar, R. D. M., & Balsari, V. (2001). Altered images: The 2001 state of corporate responsibility in India poll. New Delhi: Tata Energy Research Institute. Mohan, A. (2001). Corporate citizenship: Perspectives from India. Journal of Corporate Citizenship, Summer (2), 107–117. Moon, J. (2002). Corporate social responsibility: An overview (pp. 385–408). Europa: International Directory of Corporate Philanthropy. Nag, G., Ganesh, S. R. P., & Sharma, B. (2003). Through the eyes of an insider: Case study of an MNC subsidiary in an emerging economy. Thunderbird International Business Review, 45(4), 481–491. PiC. (2004). Third Report on Corporate Involvement in Social Development in India, Partners in Change. New Delhi. Regelbrugge, L. (1999). Promoting corporate citizenship: Opportunities for civil society and business engagement. Bloomfield, CT: CIVICUS and Kumarian Press. Ruud, A. (2002). Environmental management of transnational companies in India: Are TNCs creating islands of environmental excellence in a sea of dirt? Business Strategy and the Environment, 11(2), 103–118.

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Sawhney, A. (2004). The new face of environmental management in India. Hants, UK and Burlington, VT: Ashgate Publishing. Sharma, S. (2002). Research in corporate sustainability: What really matters? pp. 1–31. Welford, R. (2004). Corporate social responsibility in Europe and Asia: Critical elements for best practice. Journal of Corporate Citizenship (13), 31–47.

Renu Jatana was born in Jaipur, India, in 1960. She obtained her M.Com and M.Phil. degrees from University of Rajasthan, Jaipur. She obtained Ph.D. in commerce from Mohan Lal Sukhadia University, Udaipur, Rajasthan. Presently, she is the Dean and Faculty Chairman at Faculty of Commerce, ML Sukhadia University, Udaipur. She has attended and participated two times in International Conference held at London Metropolitan University, London. She has edited four volumes of ‘Social Corporate Responsibility’ along with Prof. David Crowther. She has successfully guided 32 Ph.D. scholars and has over 34 years of teaching experience in commerce. She has also completed major research project of ICSSR, New Delhi. Recently, she has visited Thailand for research work on ‘Leadership Qualities of Women executives in India and Thailand’. Her area for teaching interest includes Business Economics, Banking and Finance, and International Trade and Finance. She has published a number of research papers and articles in reputed Indian and International Journals. At present, she is Course director of Master of International Business. Prof. Jatana is married—a girl and a boy’s mother. Mehjabeen Barodawala was born in Udaipur, India, in 1988. She is Post-Doctoral Fellowship scholar from Indian Council Social Science Research in the Department of Banking and Business Economics at Faculty of Commerce, Mohan Lal Sukhadia University, Udaipur. She has completed her Ph.D. under the able guidance of Prof. Renu Jatana on the topic ‘A Study on Impact of Various Promotional Techniques towards Demand Generation among Children’ in 2016. She received master’s degree in commerce in 2013 and master’s degree in international business in 2011 from MLS University, Udaipur. She is NET qualified in commerce in July 2012. She has seven years of teaching experience as a lecturer in the Department of Banking and Business Economics. She also has interest in the field of international business studies and do take lectures on India’s foreign trade, international business environment and export-import procedure and documentation. She has a textbook on Indian banking system published in her name. She has a number of research papers being published in national and international Journals. Currently, she is also the Director of The Udaipur Urban Co-operative Bank Ltd., Udaipur. Dr. Barodawala is married—a boy and a girl’s mother.

Chapter 3

Implementation of Lean Management: Sustainability in the Construction Industry: The Case of Brazilian Companies Alberto Eduardo Besser Freitag, Osvaldo L. G. Quelhas, Sergio Luiz Braga França and Marcelo Jasmim Meiriño

Abstract The purpose of this paper is the development of a conceptual framework for integration of practices of the lean management philosophy in the construction industry, known as lean construction, with the lean tools that contribute to sustainability and their deployment phases. A mixed research strategy was used: at the qualitative phase, a systematic review of the literature was conducted correlating lean, construction, and sustainability; at the quantitative phase, 140 professionals involved with the civil construction sector of the State of Rio de Janeiro, Brazil, were interviewed between September and December 2015, and 60 responses were obtained. The results showed that most of the respondents have more than 20 years of market experience, 51.7% with graduate degrees. Despite this, only 43.3% of the companies know the concept of lean construction and only 28.8% adopt it, which reinforces the importance of dissemination of lean construction and sustainability themes in technical schools, universities, and in the labor market. The practical and academic implications of this study are the diffusion of both themes among the construction industry. The study is also useful for researchers, who can explore several gaps from the results found, in particular the lack of information which unfolds on slow technological diffusion. The originality of this study is the integration of practices of lean construction, with the lean tools that contribute to sustainability and their deployment phases. Keywords Lean management Sustainability Productivity





Lean construction
Waste reduction


A. E. B. Freitag (&)
O. L. G. Quelhas
S. L. B. França
M. J. Meiriño Fluminense Federal University, Rio de Janeiro, Brazil e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability, Volume I, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_3

25

26

3.1

A. E. B. Freitag et al.

Introduction

The strategic map of 2013–2022 for the Brazilian Industry (CNI 2013) is a study whose objective is to point the way that industry and Brazil should go in the next decade to increase the levels of productivity and efficiency and achieve a high degree of competitiveness, while respecting sustainability criteria. Sustainability has a direct relationship with the productivity and innovation. Productivity gains reduce the use of natural resources and eliminate waste. Innovation introduces new products, processes, and business models that generate less environmental and social impact. The productivity of the construction industry is one of the economic indicators of success, since this sector has a substantial impact on gross domestic product (GDP) and employment. Studies estimate that a 10% increase of productivity in the construction industry would result in an improvement of 2.5% of GDP (Ibrahim et al. 2010). Brazil’s productivity is still low, compared with USA and European countries (Bloom and Reenen 2010), and one of the explanations is largely based in the use of management practices, such as the adoption of lean manufacturing. Energy efficiency is strongly associated with a better level of company management, probably because good management practices (such as lean manufacturing) tend to save on energy consumption (Santos et al. 2019). The construction sector is one of the biggest consumers of energy and natural resources, as reported in the study Vision Brazil 2050 (CEBDS 2012), inspired by the Vision 2050 Project—the new agenda for business, of the World Business Council for Sustainable Development (WBCSD). The two studies have in common the purpose of presenting the vision of a sustainable future and of how it is possible to reach it from nine basic themes, one of them named “buildings and built environment.” Construction supply chain is responsible for 75% of the extraction of natural resources, especially water, minerals, and timber, generating about 50% of the municipal solid waste. The figures of material waste are high and may reach 40%, according to some estimates. Labor productivity is considered low, and most Brazilian constructions use inefficient tools and methods and employ labor almost completely without qualification. The exception occurs in large-scale business ventures, mainly in the capital. The actions, which are intended to be developed until 2020, under the Vision Brazil 2050 study (CEBDS 2012), include “Reassess the constructive methods to seek ways to reduce the generation of waste during the entire lifecycle of the building.” Considering the importance of the construction sector for the economy and the challenges raised in the light of the impacts arising from the extraction of natural resources and waste generation, it is necessary that construction companies from the State of Rio de Janeiro adopt modern management practices such as lean management, known as lean construction in the construction industry, to increase productivity, contributing to a greater sustainability.

3 Implementation of Lean Management: Sustainability …

27

Numerous studies have been developed regarding the integration of lean and sustainability in the construction industry, compiled by Freitag et al. (2017). There are also researches using Liker’s Toyota model (2004) applied to the sector. But it was not found, so far, a study which integrates practices of the lean management philosophy in the construction sector, with the tools/lean techniques that contribute to sustainability, considering its deployment. This work aims to fill such a gap, and it is structured in five sections. This first one contains the context that led to the development of the study, the second presents a review of the literature, the third describes the methodology, the fourth brings the results and discussion, followed by the conclusions in the fifth section and appendix.

3.2

Literature Review

Sustainability and lean concepts can be applied to the construction industry, to help waste minimization. Koranda et al. (2012) examined projects of different sizes and in different environments in the Midwest of the USA to determine which aspects hamper the integration of sustainability and lean concepts in the region. A model for planning the entire construction process was established so that waste can be reduced and the integration of lean concepts and sustainability is more feasible. Based on case studies, various aspects of waste in construction projects have been recognized, and a comparison between the interaction of lean concepts and sustainability was documented. In Koranda’s et al. (2012) model, performance indicators are a prerequisite for designers and contractors to be able to integrate lean and sustainability concepts. Ogunbiyi et al. (2014) presented an exploratory study of existing literature and the results of the use of a questionnaire with construction professionals based in the UK to explore the contribution of the application of lean construction techniques on sustainable construction. The global perspective of building industry professionals showed that 14 benefits are perceived due to the integration of lean construction principles and sustainable construction within the construction industry. Regarding the level of use of lean principles/techniques to enable sustainability in construction companies, 16 principles/techniques were found, in descending order of level of use: (1) just-in-time, (2) visualization tools, (3) daily huddle meetings, (4) Value analysis, (5) Value stream mapping, (6) Total quality management, (7) Fail safe for quality, (8) 5S, (9) Total preventive maintenance, (10) First run studies, (11) Last Planner, (12) Concurrent Engineering, (13) Pull approach, (14) Kanban, (15) Kaizen, and (16) Six Sigma. Ogunbiyi et al. (2014) identified 12 areas of connection between lean construction and sustainability. The objective of Firmawan et al. (2012) was to present practical examples of value engineering and lean construction application in the project of a green building and to evaluate qualitatively its benefits in terms of environmental impact and waste minimization. The technique of function analysis system was conducted

28

A. E. B. Freitag et al.

applying a complete Function Analysis System Technique (FAST) diagram as proposed by Grönqvist et al. (2006). Since the purpose of a green building concept is to create a sustainable building, protecting the environment is considered as the highest order function. Therefore, the main path of the FAST diagram is divided into two distinct issues: lean construction practices and green design. Firmawan et al. (2012) identified critical functions for green design features and practices in place that maximize the concept of lean construction, in comparison with the conventional construction. Lean construction practices were divided into three groups: reduce waste, reduce emissions, and reduce water. Sustainable construction of houses in the three dimensions of economic, environmental, and social effects is reachable through technologies and innovations. Nahmens and Ikuma (2012) propose the use of lean construction as a viable and effective strategy, using several case studies to show the effect of lean on the triple bottom line of sustainability in construction of modular homes. Each case study highlights a dimension of sustainability. Lean construction resulted in a significant environmental impact, reducing material wastage at 64%, a significant social effect, reducing or eliminating the main security risks due to excessive force, bad posture, workers hit, and a significant economic effect by reducing production hours in 31%. Studies have shown that sustainability and lean construction complement each other in building projects. By applying lean principles, the utilization of man power and materials is improved, namely the work is carried out more efficiently and only the materials that are needed are used with little or no waste (Harper and Hazleton 2014). The lean manufacturing of autoclaved aerated concrete (AAC) is a highlight in the modern industry of building materials (van Boggelen 2011). The waste reduction and energy reuse represent a serious potential for the AAC industry contribution to a sustainable future. The goal of Arayici’s et al. (2011) research was to develop a lean project practice through the adoption and implementation of Building Information Modeling (BIM). The BIM implementation approach used a socio-technical vision that not only considers the implementation of the technology, but also the socio-cultural environment that provides the context for its implementation. As a result of BIM technology adoption, Arayici et al. (2011) reported efficiency gains obtained through pilot projects and the project elaboration process was improved through elimination of waste and generation of value. Tykkä et al. (2010) identified innovative companies in six European countries which use molded wood in the construction industry and assessed its sources of innovation. The common factor that leads these companies to innovate are business opportunities that arise from demographic changes in the environment outside the company, such as environmental sustainability and affordable housing for low-income groups. Companies of case studies acknowledged that the traditional project-based approach and on-site construction is an incongruity, and established internal prefabrication, including the development of processes based on lean production to ensure quality, as well as effectiveness.

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Currently, most management approaches from engineering are focused on the outside world, that is, everything that is visible (structures–processes–result). This situation is creating a low sustainability of these approaches and tools, because it forgets central aspects of individual and collective person behavior. Pavez et al. (2010) state that if lean construction wants to evolve to become a practice of effective management, it must include some elements in order to harmonize technical and human development within an organization or project. Pavez et al. (2010) cited Tatum (2011), who defined the four main elements of construction engineering knowledge, which describe the knowledge base for a new engineer, including: • Technical fundamentals—if the next generation of construction engineers gain knowledge of sustainability and lean construction as additional technical fundamentals in higher education programs, the acceptance of these practices will accelerate within the construction industry while the requirements of efficiency and sustainability can be achieved; • Resources invested in construction sustainability and lean construction may affect materials, tools and equipment that are reusable or consumables. Consumption materials are materials that have a single use. All construction projects use consumption materials, but to maintain the principles of lean and sustainability, less waste and more reusable materials, tools, and equipment help to achieve these results. Andújar-Montoya et al. (2015) explain that Six Sigma is a methodology based on statistics that provides a structured model to organize and implement strategic initiatives of process improvement to achieve reductions in process variability. It has been used to improve the sustainability and quality in prefabricated composite structures, applying Six Sigma to improve quality management, and at the same time reduce energy consumption during the construction, as well as pollution, noise, and waste.

3.3

Methodology

To facilitate the discussion of characteristics of mixed design researches, case of this study, a notation system appears extensively throughout the literature of mixed methods, with “quan” to indicate quantitative methods of a study and “qual” to indicate qualitative methods (Creswell and Clark 2011). The short form aims to convey an equal status of the two methods (i.e., both abbreviations have the same number of letters and same format).The relative priority of both methods in the context of a particular study is indicated through the use of capital and lowercase letters—that is, the prioritized methods are indicated with capital letters (i.e., QUAN and/or QUAL) and secondary methods with lowercase letters (i.e., quan and/or qual). For the purpose of this study, a mixed research strategy was adopted,

30

A. E. B. Freitag et al.

with a qualitative phase (qual) followed by a quantitative (QUAN), in six steps, described below: 1. qual data collection—a search on Scopus scientific basis was held, initially with the search phrase (construction OR building AND industry AND lean OR lean construction), with results limited to articles and reviews, in which 299 records were identified. Whereas from 2010 there is a balance in the annual distribution of documents, and that almost half of the records (144) are available from that year on, it was decided to limit documents analysis from 2010. In this context, for the phrase (construction OR building AND industry AND lean OR lean construction AND sustainability), 12 records were identified; 2. qual data analysis—analysis of documents using the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (Prisma) method (Moher et al. 2009). After the reading of abstracts and elimination of incomplete or non-adherent records, 11 documents remained, which were included in the literature review of this study; 3. Develop an instrument—a research instrument (survey) for data collection was built, considering some of the 144 documents identified from 2010. This questionnaire is a self responded instrument, i.e., without interference of any interviewer in obtaining the information. The first part of the questionnaire aimed to obtain information about the basic profile of the company and of the respondents. In the second part of the questionnaire, respondents were asked to evaluate 35 attributes related to Liker’s Toyota model (2004), in terms of the extent to which they should be implemented in companies so that the lean management philosophy can be adopted by the construction industry of the State of Rio de Janeiro. To evaluate the practices, a Likert scale of 5 points and “I don’t understand” (DU) was used; 4. QUAN data collection—the non-probabilistic sample was formed by 140 professionals of five organized groups from the Rio de Janeiro State involved with activities related to the construction industry: (1) companies belonging to the civil construction industry union from the State of Rio de January, (2) companies from the materials, technology, productivity, and quality commission, (3) executive education courses for the civil construction sector, promoted by the Federation of industries of the State of Rio de Janeiro, (4) experts, consultants, and technicians of service companies for the construction sector, and (5) college professors. The data were collected by electronic means (e-mail) and attendance form, between the months of September and December 2015. Responses were obtained from 60 respondents; 5. QUAN data analysis—the R software was used for data analysis. After survey and data organization, the instrument reliability was validated using ordinal alpha, followed by a content and constructor validation, by means of Kaiser-Meyer-Olkin (KMO) and Bartlett’s sphericity tests. An exploratory factor analysis was held;

3 Implementation of Lean Management: Sustainability …

31

6. Interpretation—a ranking of 35 lean construction practices was produced, calculating the estimates of proportions of concordant to each of the practices and their respective 95% confidence intervals.

3.4

QUAN Data Analysis

This work makes use of exploratory data analysis techniques, to investigate latent features on the data that indicate possible patterns, trends, or models (de Freitas et al. 2008). These techniques are used in the data descriptive analysis which must be performed after collection and typing of data in a suitable database. The work also made use of multivariate data analysis, which refers to all statistical methods which simultaneously analyze multiple measures about each individual or object under investigation (Hair et al. 2009). There are multivariate techniques, solely designed to deal with multivariate issues such as factorial analysis, which can be exploratory or confirmatory, and identifies the underlying structure of a set of variables. Data were analyzed using the software R (R Core Team 2015). Descriptive statistics were used, including frequencies, percentages, and sets (most frequent value in the sample), to describe the characteristics of the analyzed sample. In order to determine the reliability, validity and objectivity (terminology used to verify the internal consistency of data and check the replicability of questionnaires) of the collected data, some specific tests were applied as ordinal alpha, the Kaiser-Meyer-Olkin (KMO) criterion and Bartlett’s sphericity test. For the application of factor analysis, the KMO (KMO > 0.50) test and Bartlett’s sphericity test were used. The main objective of the factor analysis in the case of this work was to explain the correlation or covariance between a set of variables, in terms of a smaller number of non-observable variables. These non-observable variables or factors are calculated by linear combination of the original variables. The ordinal alpha reliability coefficient proposed by Zumbo et al. 2007) considers as acceptable limit values greater than 0.6. For measurements involving ordinal data (qualitative data that have a natural ordering of their categories), the ordinal alpha estimates more precisely the internal consistency than the Cronbach’s alpha (Corrêa 2012), because it relies on a polychoric correlation matrix (a bivariate association measure used when the two variables are ordinal with three or more categories) instead of a Pearson covariance matrix (covariances matrix calculated for quantitative data). An attempt was made to adjust a confirmatory factor analysis to check how well the practices were allocated to the four layers of Liker’s Toyota model (2004); however, due to the small number of experimental units, it was not possible to proceed with such research. An exploratory factor analysis was then performed for ordinal data. To determine the number of factors the Kaiser criterion was used. A Varimax rotation was used to obtain the final factors. The Varimax rotation is an orthogonal rotation method and wants that, for each major component, there are only a few significant weights and all the others are close to zero, that is,

32

A. E. B. Freitag et al.

the objective is to maximize the variance between the weights of each major component, hence the name Varimax. The variables with factorial loads (weights of variables within each factor in factor analysis) smaller than 0.5 or commonalities (portion of the variance that a variable shares with all other variables considered, is also the proportion of variance explained by common factors) smaller than 0.25 were excluded (Filho Salvador-silva and Teixeira 2014). A significance level of 5% was used for all hypothesis testing.

3.5

Results and Discussion

Most of the 60 respondents (33.3%) have more than 20 years of market experience and high schooling, i.e., 51.7% with graduate or master’s degree or doctorate. Bloom and Reenen (2010) state in their study that education is strongly correlated with high scores in management, if the level of education is considered of both the managers and the workers, whereas the vast majority of 60 respondents have at least one undergraduate degree, and it is plausible that the managers are more likely to be aware of the benefits of modern management practices such as lean manufacturing. The companies where the respondents work are mostly midrange (41.7%), have an operating time of more than 20 years (43.3%) and are located in the State of Rio de Janeiro (85%). Whereas just near half the companies have more than 20 years of operation and are medium sized, it is supposed that they have a consolidated management structure, facilitating the absorption of new knowledge of management philosophies like lean construction, both at the management level, as in the shop floor level. However, 43.3% of companies know the concept of lean construction, but only 28.8% of them make use of this concept. Of the companies that reported using lean construction, 47% are medium sized and 35% have more than 20 years of operation. The fact that less than a third of the respondent companies adopt the lean management philosophy, despite having proven operational experience and staff with good education, supports the perceptions of Bloom and Reenen (2010), that the slow evolution of management practices—“scientific management” of Taylor, mass production of Ford, M format corporation of Sloan, Deming quality movement and “lean production” of Toyota—suggests that management practices have a resemblance to process technologies that diffuse slowly over time. The slow technology diffusion can have various causes, but a well-studied factor is the information. New management practices are often complex and of difficult introduction without the help of staff or consultants with previous experience of these innovations. The acquisition of skills on modern management practices passes necessarily by education, namely by the teaching of the concepts and tools of lean construction, and its integration with sustainability, at technical schools and universities.

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33

To achieve the purposes of this research, a table integrating concepts of lean and sustainability in construction, from the literature review (Table 3.1), was initially devised. Then a ranking of lean construction practices was structured and finally, a conceptual framework was proposed, which integrates practices of the lean management philosophy in construction, with lean tools/techniques that contribute to sustainability. Table 3.1 Integration between lean and sustainability in construction industry, based on literature review References

Integration between lean and sustainability in construction industry

Koranda et al. (2012)

Proposal of a model, where performance indicators are the essential condition so that designers and developers can integrate lean and sustainability concepts 14 benefits are perceived due to the integration of lean construction principles and sustainable building; 16 lean principles/techniques were found to enable sustainability in construction companies; 12 areas of connection between lean construction and sustainability were identified Identification of critical functions for green design features and practices in place that maximizes the concept of lean construction, in comparison with the conventional construction. Division of lean construction practices into three groups: reduce waste, reduce emissions, and reduce water Lean construction as a viable and effective strategy, using several case studies to show the effect of lean on the triple bottom line of sustainability in construction of modular homes Sustainability and lean construction complement each other in building projects. By applying lean principles, utilization of labor and materials is improved Lean manufacturing of autoclaved aerated concrete (AAC) is a highlight in the modern industry of building materials. Waste reduction and reuse of energy represent a serious potential for the AAC industry contribution to a sustainable future Practice of lean project through the adoption and implementation of building information modeling (BIM), using a socio-technical vision that considers not only the implementation of the technology, but also the socio-cultural environment that provides the context for its implementation. Adoption of BIM technology brought efficiency gains achieved through pilot projects and the project elaboration process was improved through elimination of waste and generation of value Identification of innovative companies in six European countries which use molded wood in the construction industry. The common factor that leads these companies to innovate are business opportunities that arise from demographic changes in the environment outside the company, such as environmental sustainability and affordable housing for low-income groups. The case studies have established internal prefabrication, including the development of processes based on lean production to ensure quality and effectiveness (continued)

Ogunbiyi et al. (2014)

Firmawan et al. (2012)

Nahmens and Ikuma (2012) Harper and Hazleton (2014) van Boggelen (2011)

Arayici et al. (2011)

Tykkä et al. (2010)

34

A. E. B. Freitag et al.

Table 3.1 (continued) References

Integration between lean and sustainability in construction industry

Pavez et al. (2010)

If lean construction wants to evolve to become an effective management practice, it should include elements in order to harmonize the technical and human development within an organization or project Defined the four main elements of knowledge of construction engineering, which describe the knowledge base that a new engineer needs to have, including “technical fundamentals” and “resources invested in construction,” which include lean construction and sustainability Six Sigma used to improve sustainability and quality in prefabricated composite structures, applied to increase quality management, and also reduce energy consumption during the construction, as well as pollution, noise, and waste

Tatum (2011)

Andújar-Montoya et al. (2015)

Ranking of lean construction practices Initially, it is necessary to prioritize the 35 lean construction practices, from the study of Gao (2013), linked to the 14 principles and four layers of Liker’s Toyota model (2004), base of the research instrument of this study, answered by 60 respondents. The goal is to establish a ranking, to subsidize the decision about practices that will be prioritized by companies, and to which will be directed resources (technical, human, and financial). For such, estimates of proportion of concordant (agree or completely agree) for each of the practices and their respective 95% confidence intervals (CI) were calculated, in order to rank the importance of the same (Table 3.2). The practice P1.1.3 obtained the highest percentage of agree (96.6%), while the practice P1.1.1 obtained 96.5%. However, it is observed that there is an overlap of confidence intervals, indicating that there is no statistically significant difference between the percentage of agree of the two practices. Tools/techniques in lean construction From the ranking of the practices, Table 3.3 was devised, representing the proposition of a conceptual framework that correlates each of the 35 lean construction practices of this study with the four layers and 14 principles of Liker’s Toyota model (2004) and with the 16 lean construction tools/techniques that contribute to sustainability in organizations, identified from the research of Ogunbiyi et al. (2014). For each tool/technique, deployment phases have been suggested, based on Eriksson’s study (Eriksson 2010) and recommendations of Green and May (2005): I. Waste disposal of a technical and operational point of view. The responsibilities and focus are linked to managers rather than individual workers. Essence is elimination of unnecessary movements, cutting unnecessary costs, workflow optimization, and sharing of the benefits of improved performance. Lean construction aspects related to phase I are cleaning, just-in-time deliveries, targets, performance indicators, and sharing of gains and pains.

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35

Table 3.2 Ranking of lean construction practices Ranking

Practice

Description

Agree (%)

CI (95%)

1

P1.1.3

96.6

[87.4; 99.4]

2

P1.1.1

96.5

[87.4; 99.4]

3

P3.9.3

95.0

[85.2; 98.7]

4

P4.12.2

93.2

[82.7; 97.8]

5

P3.10.1

91.7

[80.8; 96.9]

6

P2.8.1

91.6

[80.6; 96.8]

7

P2.5.2

91.3

[80.2; 96.7]

8

P2.8.2

90.0

[78.8; 95.8]

9

P3.11.2

89.9

[78.5; 95.8]

10

P3.9.1

88.3

[76.8; 94.8]

11

P2.2.3

88.1

[76.4; 94.7]

12

P3.10.2

86.7

[74.8; 93.7]

13

P2.7.3

86.6

[74.8; 93.6]

14

P4.13.1

86.5

[74.4; 93.5]

15

P4.12.1

Understand customer requirements is the work priority Sustain a constant purpose (vision, mission, and values of the company) Leaders must understand the company‘s policy and procedures, and communicate these to members of their team Analyze and fully understand the situation before taking decisions Select the best person for a given job New technology must support the values of the company It is important to prevent that faulty attributions or “without inspection” do not come in the next process New technology should demonstrate its potential to improve processes Work with partners to improve project effectiveness The leaders are motivated to inspire people to reach goals Layout of the site should be organized to improve the flow of materials and employees moving in order to minimize waste due to movement, displacement, and travel Training should be provided to equip employees with the necessary skills before they are assigned to work Appropriate indicators are used to identify layouts, transit, safety concerns, etc. Use appropriate troubleshooting methodologies (e.g., 5 Whys) to determine the root cause of problems Solve the problem by going to the places (e.g., the construction site), where the problems are discovered

86.4

[74.4; 93.5]

(continued)

36

A. E. B. Freitag et al.

Table 3.2 (continued) Ranking

Practice

Description

Agree (%)

CI (95%)

16

P2.6.2

86.2

[74.0; 93.3]

17

P2.4.3

85.0

[72.9; 92.5]

18

P2.7.1

85.0

[72.9; 92.5]

19 20

P3.11.1 P4.14.1

84.5 84.2

[72.0; 92.2] [71.6; 92.0]

21

P4.13.2

83.6

[70.7; 91.8]

22

P4.14.2

83.6

[70.7; 91.8]

23

P3.9.2

83.3

[71.0; 91.3]

24

P2.5.3

83.1

[70.5; 91.1]

25

P2.4.2

81.6

[69.1; 90.0]

26

P2.2.1

78.0

[65.0; 87.3]

27

P2.5.1

78.0

[64.9; 87.3]

28

P2.3.3

77.6

[64.4; 87.0]

29

P2.6.1

It is important to incorporate into new standard operating procedures (SOPs) the creative improvements of employees with respect to a standard Daily work activities must be planned to balance the availability of material, labor, machine availability, and workload between the operations Visual aids must be adopted to make waste, problems and abnormal conditions stay fast apparent to employees Respect the capacities of partners It is important to reflect on mistakes (e.g., defects, rework, safety issues, etc.) regularly In general, consider alternative solutions Kaizen activities are conducted in the workplace of employees The leaders will separate time to understand the problems and root causes before acting Employees are empowered to be responsible for quality The project manager must plan the work with inputs from other parts, including subcontractors, suppliers, customers, etc. It is important that employees are concerned with the elimination of waste in their daily work (waste can be rework, low quality, defects, or waiting time) The staff is dedicated to provide embedded quality in all aspects of operations Work content, uptime, material requirements, among other information, should be prepared clearly before a work task is released to a team Employees are encouraged to improve standard operating procedures (SOPs) based on their own experience

76.7

[63.6; 86.2]

(continued)

3 Implementation of Lean Management: Sustainability …

37

Table 3.2 (continued) Ranking

Practice

Description

Agree (%)

CI (95%)

30

P2.7.2

73.4

[60.1; 83.5]

31

P2.4.1

71.2

[57.7; 81.8]

32

P2.2.2

70.4

[56.2; 81.6]

33

P2.3.2

64.8

[50.5; 77.0]

34

P2.3.1

58.3

[44.9; 70.7]

35

P1.1.2

The information posted in terms of work status, schedule, quality, safety, etc. should be in a place in which most workers can see it daily, and it is updated Leaders in charge (the last planners) will take the commitment about what will be made by teams each week based on what is ready to be done Material, equipment and other resources must be provided in a just-in-time way when needed It is important to strive for a low level of inventory of material (even without stock) at the construction site Materials should be ordered as close as possible to the exact needs Short-term losses affect decision making, but are less important than pursuing long-term goals

54.7

[40.5; 68.2]

II. Eliminate troubled relationships and strengthen relations of cooperation and teamwork between the actors of the supply chain. The main parts are cooperation, model with long-term agreements, meetings and facilitators. Essence is limited invitations for bids, smooth parameters, long-term contracts, collaborative tools, and broad partnership team. III. Structural change in the governance of the project. The essential parts are IT, prefabrication, last planner, bottom-up activities and emphasis on individuals, a rethinking of design and construction, decrease of competitive forces, long-term contracts, training in all staff levels, and a systems perspective of both processes and product. Essence is set of IT tools, prefabrication, last planner, self-control, simultaneous engineering, limited invitation for bids, smooth parameters, long-term contracts, special interest groups, training, employee suggestions, consistent decisions of orders, large-scale contracts, and properly balanced goals.

3-Use pulled system

4-Level workload

Problem solving

People and partners

X X

13-Decision-making strategy

14-Reflection and cont. improvement

12-Go see for yourself

11-Respect partners and suppliers network

10-Develop people and teamwork

X

X

8-New technology acquiring strategy

9-Grow leaders and leadership

X

I, II, III

2-Visualization tools

7-Visual control

6-Standardized tasks

X

X

2-One piece flow

Process

X

1-Long-term philosophy

Process

5-Culture of stopping to fix problems

X

Principles (14)

Philosophy

I

Deployment phases of lean tools/techniques (3)

Layers (4)

1-Just-in-time

Lean tools/lean construction techniques to enable sustainability (16)

X

X

III

3-Daily huddle meetings

X

X

X

II, III

4-Value analysis

X

X

X

X

X

X

X

X

X

II, III

5-Value stream mapping

X

X

X

III

6-Total quality management

X

X

X

X

III

X

X

X

X

X

X

X

X

I

8-5S

(continued)

7-Fail safe for quality

Table 3.3 Conceptual framework between lean construction practices, lean tools/techniques for sustainability and their deployment phases

38 A. E. B. Freitag et al.

People and partners

Process

X

X

X

11-Respect partners and suppliers network

X

X

X

X

X

X

X

10-Develop people and teamwork

X

X

X

X

II, III

15-Kaizen

X

X

X

X

X

X

X

II, III

14-Kanban

9-Grow leaders and leadership

8-New technolgy acquiring strategy

7-Visual control

6-Standardized tasks

X

X

4-Level workload

5-Culture of stopping to fix problems

X

X

3-Use pulled system

X

X

2-One piece flow

X

I

Process

X

III

13-Pull approach

Principles (14)

III

12-Concurrent Engineering

1-Long-term philosophy

III

11-Last planner

Philosophy

III

Deployment phases of lean tools/techniques (3)

10-First run studies

Layers (4)

9-Total preventive maintenance

Lean tools/lean construction techniques to enable sustainability (16)

Table 3.3 (continued)

X

X

X

X

III

16-Six sigma

(continued)

P3.11.1, P3.11.2

P3.10.1, P3.10.2

P3.9.1, P3.9.2, P3.9.3

P2.8.1, P2.8.2

P2.7.1, P2.7.2, P2.7.3

P2.6.1, P2.6.2

P2.5.1, P2.5.2, P2.5.3

P2.4.1, P2.4.2, P2.4.3

P2.3.1, P2.3.2, P2.3.3

P2.2.1, P2.2.2, P2.2.3

P1.1.1, P1.1.2, P1.1.3

Practices (35)

3 Implementation of Lean Management: Sustainability … 39

Problem solving

X

12-Concurrent Engineering

X

13-Pull approach

14-Kanban

X

15-Kaizen

X

X

11-Last planner

14-Reflection and cont. improvment

X

10-First run studies

X

9-Total preventive maintenance

13-Decision-making strategy

12-Go see for yourself

Lean tools/lean construction techniques to enable sustainability (16)

Table 3.3 (continued)

X

16-Six sigma

P4.14.1, P4.14.2

P4.13.1, P4.13.2

P4.12.1, P4.12.2

40 A. E. B. Freitag et al.

3 Implementation of Lean Management: Sustainability …

41

Limitations of This Study In spite of the contributions brought by this study, there are research limitations related to keywords used in the search sentences, choice of the searched scientific databases, and profile of the survey respondents. Conclusions and Future Study The construction industry is of great importance for the economy and faces challenges in light of the impacts arising from the extraction of natural resources and waste generation. This situation reinforces the need for companies to adopt modern management practices such as lean management, known as lean construction in the building sector, to increase productivity, contributing to sustainability. From available studies in the scientific literature, integrating lean and sustainability in the construction industry, an opportunity was detected to develop a research correlating practices of the lean management philosophy in the construction industry, with lean tools/techniques that contribute to sustainability. A survey was conducted among 140 professionals from the civil construction sector of the State of Rio de Janeiro, Brazil, obtaining 60 responses, which allowed the structuring of a 35 lean construction practices ranking, aligned with the four layers and 14 principles of Liker’s Toyota model (2004). In the sequel, it was possible to propose a conceptual framework that integrates lean management practices in the construction industry, with lean tools/techniques that contribute to sustainability, considering its deployment phases. To enhance adoption of the lean management philosophy by the construction industry, studies must be developed correlating lean with strategy and decision making.

References Andújar-Montoya, M. D., Gilart-Iglesias, V., Montoyo, A., & Marcos-Jorquera, D. (2015). A construction management framework for mass customisation in traditional construction. Sustainability, 7, 5182–5210. Arayici, Y., Coates, P., Koskela, L., Kagioglou, M., Usher, C., & O’Reilly, K. (2011). Technology adoption in the BIM implementation for lean architectural practice. Automation in Construction, 20, 189–195. Bloom, N., & Reenen, J. V. (2010). Why do management practices differ across firms and countries? Journal of Economic Perspectives., 24(1), 203–224. CEBDS—Conselho Empresarial Brasileiro para o Desenvolvimento Sustentável. (2012). Visão Brasil 2050. CNI—Confederação Nacional da Indústria. (2013). Mapa estratégico da indústria 2013–2022 (2nd. ed.). Brasília: CNI. Corrêa, C. R. (2012). Situações Incômodas no Trabalho: Confiabilidade de uma escala de medida utilizando o Coeficiente Alfa Ordinal. Programa de Pós Graduação em Saúde Coletiva. Universidade Federal de Juiz de Fora, Faculdade de Medicina, Juiz de Fora. Creswell, J. W., & Clark, V. L. P. (2011). Designing and conducting mixed methods research (2nd ed., Chap. 4, pp. 107–142). Thousand Oaks: Sage Publications, Inc.

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de Freitas, A. R., Júnior, W. B., de Ferreira, R. P., Cruz, C. D., Moreira, A., & Vilela, D. (2008). Técnicas de análises exploratórias em dados de cultivares de alfafa. Revista Brasileira de Zootecnia, 37(9), Viçosa, Set. Eriksson, P. E. (2010). Improving construction supply chain collaboration and performance: a lean construction pilot project. Supply Chain Management: An International Journal, 15(5), 394–403. Filho, N. H., Salvador-silva, R., & Teixeira, M. A. (2014). Análise Teoria de Resposta ao Item de Instrumento Breve de Avaliação de Comportamentos Antissociais. Psico, 45, 120–125. Firmawan, F., Othman, F., & Yahya, K. (2012). Improving project performance and waste reduction in construction projects: a case study of a government institutional building project. International Journal of Technology, 2, 182–192. Freitag, A. E. B., Anholon, R., de Oliveira, V. M., & Larrain, T. V. (2017). Integration of concepts about lean construction, sustainability and life cycle of buildings: A literature review. Brazilian Journal of Operations and Production Management, 14, 486–499. Gao, S. (2013). The Toyota way model: An implementation framework for large chinese construction firms (A thesis submitted for the degree of doctor of philosophy, department of building). National University of Singapore. Green, S., & May, S. (2005). Lean construction: Arenas of enactment, models of diffusion, and the meaning of ‘leanness’. Building Research and Information, 33(6), 498–511. Grönqvist, M., Male, S., & Kelly, J. (2006). The function priority matrix: Meeting the function of function analysis. Value Solutions Ltd. Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2009). Análise multivariada de dados (6ª ed., pp. 23–45). Bookman, Capítulo 1—Introdução. Harper, C., & Hazleton, R. (2014). New Engineer’s knowledge for success with subcontractors and trade partners. Practice Periodical on Structural Design and Construction, 19(1), 15. Ibrahim, A. R. B., Roy, M. H., Ahmed, Z. U., & Imtiaz, G. (2010). Analyzing the dynamics of the global construction industry: Past, present and future. Benchmarking: An International Journal, 17(2), 232–252. Koranda, C., Chong, W. K., Kim, C., Chou, J.-S., & Kim, C. (2012). An Investigation of the applicability of sustainability and lean concepts to small construction projects. KSCE Journal of Civil Engineering, 16(5), 699–707. Liker, J. K. (2004). The Toyota way: 14 management principles from the world’s greatest manufacturer. New York: McGraw-Hill. Moher, D., Liberati, A., Tetzlaff, J., & Altman, D. G. (2009). The PRISMA group. Preferred reporting items for systematic reviews and meta-analyses: The PRISMA statement. PLoS Medicine 6(7), e1000097. https://doi.org/10.1371/journal.pmed.1000097. Epub July 21, 2009. Nahmens, I., & Ikuma, L. H. (June 1, 2012). Effects of lean construction on sustainability of modular homebuilding. Journal of Architectural Engineering 18(2). Ogunbiyi, O., Oladapo, A., & Goulding, J. (2014). An empirical study of the impact of lean construction techniques on sustainable construction in the UK. Construction Innovation, 14(1), 88–107. Pavez, I., González, V., & Alarcón, L. F. (2010). Improving the effectiveness of new construction management philosophies using the integral theory. Revista de la Construcción, 9(1), 26–38. R Core Team. (2015). R: A language and environment for statistical computing. R Foundation for Statistical Computing. Vienna, Austria. https://www.R-project.org/. Santos, A. C. de S. G. dos, Carvalho, L. M., Souza, C. F. de, Reis, A. da C., Freitag, A. E. B. (2019). Total quality management: the case of an electricity distribution company. Brazilian Journal of Operations and Production Management 16(1), 53–65. Tatum, C. B. (2011). Core elements of construction engineering knowledge for project and career success. Journal of Construction Engineering and Management, pp. 745–750. https://doi.org/ 10.1061/CO.1943-7862.0000306. Tykkä, S., McCluskey, D., Nord, T., Ollonqvist, P., Hugosson, M., Roos, A., et al. (2010). Development of timber framed firms in the construction sector—Is EU policy one source of their innovation? Forest Policy and Economics, 12, 199–206.

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van Boggelen, W. M. (2011). The contribution of AAC in securing a sustainable future. AAC innovations from a life cycle perspective. Cement, Wapno, Beton. Zumbo, B. D., Gadermann, A. M., & Zeisser, C. (2007). Ordinal versions of coefficients alpha and theta for Likert rating scales. Journal of Modern Applied Statistical Methods, 6, 21–29.

Alberto Eduardo Besser Freitag is Doctor of Civil Engineering Management, Production and Environment from Fluminense Federal University (UFF), Master in Business Management by Ebape/Fundação Getúlio Vargas (FGV-RJ), Post-graduated in Marketing and Mechanical Engineer from Pontifícia Universidade Católica do Rio de Janeiro (PUC-RJ). He is certified with Lean Six Sigma Black Belt. He has a solid experience in enterprise networking organizations, support to entrepreneurship, technological services, beverage industry and engineering, occupying management positions for over 10 years. He is Partner–Director of BD Gestão Sustentável, with a career built on the Federation of Industries from the State of Rio de Janeiro, Coca-Cola Brazil, Jaakko Pöyry Engineering and Varig airlines. He is highly specialized knowledge in lean management, as well as extensive experience in the areas of people, project and process management, executive education, strategic planning, preparation of studies, technical and economic feasibility analysis, manufacturing, quality and engineering. He is fluent in Portuguese, English, Spanish, and German, with activities developed at international level. Academically, he has articles published in scientific journals, book chapters, and conference proceedings. He develops research in association with researchers from UFF, State University of Campinas (UNICAMP) and universities of Chile, Germany, and Turkey. He participates at master defense committees on UFF and undergraduate at Federal University of Rio de Janeiro (UFRJ). Reviewer of journal and conferences articles, Co-Supervisor of undergraduate and masters students at UFF. He teaches classes and lectures at UFF for students of the Master’s degree in Management Systems, Doctorate in Sustainable Management Systems, and Master and Doctorate of Production Engineerig. He is Professor of graduates at FGV-RJ on IDE Management and at IDCE Business School. His main research themes are related to lean manufacturing, administration, sustainability, innovation, and entrepreneurship. Osvaldo L. G. Quelhas is Professor of Fluminense Federal University (UFF), President of Brazilian Association of Production Engineering (ABEPRO) (2006–2010), and Member of Social Responsibility and sustainability Commission of Brazilian Oil Institute (Instituto Brasileiro de Petróleo-IBP) He is working at the Fluminense Federal University in the Civil and Production Engineering Departments since 1992, Coordinator of the Technology, Business Management and Environmental Laboratory (Latec), Vice Coordinator of the Professional Master Course in the Management Systems (Strictu Sensu), Coordinator of the Doctoral Program in Sustainable Management Systems, Professor of the Production Engineering Master and Doctorate Programs: Management System with emphasis in Sustainability (environmental, social responsibility, and work safety). He worked as Engineer and Process Manager in several national and international organizations such as the Brazilian Naval Arsenal in Rio de Janeiro, Mills Equipamentos Ltda and Shell Brasil S.A. His graduation from Civil Engineering (1978), Master degree in Civil Engineering (1984) and Doctorate in Production Engineering from the Federal University of Rio de Janeiro (UFRJ—1994). Sergio Luiz Braga França is Doctor in Civil Engineering (UFF), emphasis in management, production, quality, and sustainable development; Master in Civil Engineering (UFF); Graduate in Civil Engineer (UFF); Professor at the Doctoral Program in Sustainable Management Systems (PPSIG UFF); Professor at the Master Program on Management Systems (MSG UFF); Occupational Safety Engineer (UFF); Coordinator in the Innovation Center and Technology for Sustainability (NITS /UFF); Coordinator of MBA LATEC/UFF. He is Reviewer of journals and academic events.

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A. E. B. Freitag et al.

Marcelo Jasmim Meiriño is Professor at Fluminense Federal University (UFF) in the School of Engineering; he Professor in the Doctoral Program in Sustainable Management Systems (PPSIG UFF); Professor in the Master’s Program in Management Systems (MSG UFF); Ph.D. in Civil Engineering, emphasis on management, production, quality, and sustainable development. Architect and Urban Planner; Master in Civil Engineering; Occupational Safety Engineer; Coordinator in the Innovation Center and Technology for Sustainability (NITS/UFF); Specialist in Sustainability and Energy Efficiency in Buildings; Member of the Social Responsibility Commission of the Brazilian Institute of Oil, Gas and Biofuels (IBP); Coordinator of the National Congress on Management Excellence (CNEG); Reviewer of journals and academic events; and Researcher and Consultant.

Chapter 4

The Importance of Sustainability and Sustainability Reporting Zeynep Şahin and Fikret Çankaya

Abstract In the 1980s, voluntary and compulsory social and environmental reports began to be prepared. Thus, it was understood that the global market needed reports that included not only financial information but also non-financial information. The economic and technological contributions of business have been criticized for causing social and environmental problems over time. Issues such as environmental pollution, resource consumption, waste materials, product quality and safety, employee rights, and social responsibility have gained importance. The necessity of establishing sustainability culture in the businesses was born. Following the business scandals, corporate social responsibility and corporate sustainability have become important along with corporate governance principles. The concept of corporate social responsibility has gradually been replaced by the concept of sustainability, and instead of corporate social responsibility reports, sustainability reports have been published. In the sense of sustainability, business activities need to be reported with social, economic, and environmental consequences. Corporate sustainability, which is called business sustainability, deals with economic, environmental, social, and managerial issues. Developments related to corporate sustainability are also followed by sustainability reports. The episode consists of two subheads. In the first subhead of the study, information was given on the concepts of sustainability, sustainable development, and corporate sustainability. Under these heads, the dimensions of sustainable development, the elements and theories that contributing to corporate sustainability and the principles of corporate sustainability are explained. In the second subhead of the study, information was This study was adapted from a Ph.D. thesis which was named as “Sustainability Reports In Turkey’s GRI Scope And Proposal For Reporting For SMEs”. In addition, it has been supported by TÜBİTAK, the Scientific and Technological Research Council of Turkey, under project number 215K361 within the TÜBİTAK 3001 Program as the project output of the study named as “Current State of Sustainability Reports in Turkey and Sustainability in SMEs”. We are grateful to the TÜBİTAK unit and its employees who provided scientific and financial support for the evaluation of the project application, its worth to be supported and during the realization of the project. Z. Şahin (&)
F. Çankaya Black Sea Technical University, Trabzon, Turkey e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability, Volume I, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_4

45

Z. Şahin and F. Çankaya

46

given about sustainability reporting in small- and medium-sized businesses, sustainability reporting applications, sustainability and accounting relations, and sustainability measures.







Keyword Sustainability Dimensions of sustainability Corporate sustainability Sustainability reporting Sustainability measurements




4.1




Introduction

Emerging and uncontrolled population growth together with rapid reconstruction after the Second World War, a development process was initiated in which consumption was the forerunner. After 1960, the links between environment and development began to break, environmental balances deteriorated, and the concept of sustainability emerged. The definition of sustainability, which considers the environment and the needs of the human and future generations, has gained importance. Despite the economic and technological contributions they provide, businesses overtime has been criticized for causing social and environmental problems. Therefore, the success of businesses is now measured by the economy, the environment and the collective contribution in the long run. Nowadays, it is thought that the evaluation of the financial information produced by the financial accounting will not be enough. For this reason, it is aimed to address the environmental and social and managerial aspects of business activities and performance, and that the sustainability reports are intended to complement financial reports. The need to prepare sustainability reports arose because of the demand by the stakeholders for reporting all aspects of business activities and the fact that the businesses realize that preparing such reports that address their environmental and social contributions also contributes to their overall performances. Sustainability reports enable managers to help balance economic growth, social and environmental needs, and make it easier to assess the expenditures that contribute neither to the products and services of the enterprise nor to the society. The purpose of financial accounting is to disclose the occurrences of increases and decreases related to the formation of assets and the use of resources. In sustainability accounting, however, the goal is to measure the sustainability performance of the businesses, to provide accountability to the partners, to contribute to the decisionmaking processes of the top management, and to provide the information that the stakeholders want.

4 The Importance of Sustainability and Sustainability Reporting

4.2

47

The Concept of Sustainability

The concept of sustainability whose root is based on the Latin word “sustenere” is defined in different ways in the literature. Sustainability is the careful use of resources in agriculture, tourism, architecture, business, and the economy(Gladwin et al. 1995, p. 877). According to Beyhan and Ünügör (2005), this concept, which is used in many different areas, is about the future of humanity and means to protect human resources for the future (p. 80). The concept of sustainability emerged for the first time in 1960s. Rapid capitalist growth after the Second World War caused negativities on the ecological balance and the link between development and environment emerged and as a result, the concept of sustainability gained importance (Altunbaş 2008, p. 5). The globalization which has taken place in the twentieth century, while new opportunities to improve the quality of life, information sharing, and access to technology caused economic growth, also created new risks. All these make sustainable development important. While advances in knowledge and technology provide economic growth, social relations help resolve the risks and threats to the environment and the economy. It is therefore expected that the sustainable development can be attained if economic, social, and environmental sustainability is provided (Özer 2010, pp. 4–5). Sustainability in terms of businesses is to evaluate economic expectations in a balanced way with environmental and social sensitivities. Therefore, businesses are responsible not only to their shareholders or investors but also to all stakeholders and include the concept of sustainability into management policies. It can be said that the businesses that comply with the concept of sustainability have become advantageous compared to their competitors.

4.2.1

Sustainable Development

In 1972, at the United Nations Conference on the Human Environment in Stockholm, by relating the equal use of resources and economic and social development with the environment, the first steps for concept of sustainability and sustainable development were taken. In 1987, the most commonly used definition of sustainable development was made in the report “Our Common Future,” which was prepared by the World Commission on Environment and Development (WCED), known as the Brundtland Commission. According to this definition, sustainable development is “the fulfillment of the needs of the present generation without eliminating the ability of future generations to meet their own needs” (WCED 1987, p. 54).

Z. Şahin and F. Çankaya

48

Overtime, the purpose of the sustainable development has gone beyond its original definition and turned into sustainability of resources for maximum profit. In order to avoid this, sustainability indicators have been developed by the United Nations Commission on Sustainable Development (UNCSD). These indicators measure how far progress has been made in achieving sustainable development from economic, environmental, and social aspects. The main economic indicators representing sustainability developed by UNCSD are explanations of economic structure, consumption, and production patterns. Environmental indicators include descriptions about atmosphere, soil, ocean, sea and coasts, water, and biodiversity. Social indicators are explanations about equality, health, education, housing, security, and population (Özmehmet 2008, pp. 12–16).

4.2.2

Dimensions of Sustainable Development

The discussions on the subject of sustainable development converge at three main points: economic success, environmental justice, and social equality. Economic objectives in sustainable development are productivity, growth, and stability; social goals are full employment, equality, security, education, health, participation, and cultural identity; environmental objectives are healthy environment for people, rational use of renewable natural resources, and protection of non-renewable natural resources. Sustainability is an egalitarian social goal. At the same time, businesses and people should adapt to the environment. Therefore, this concept should be considered an integration of economic, environmental, and social three dimensions (Zink et al. 2008, p. 7). Economic Dimension of Sustainable Development Almost all of the economic models that have been adopted in the past are short-term models that have been developed without regard to the protection of the environment and natural resources. Sustainable development model is the only model that aims to optimize development in the long run without sacrificing resources and preserving the environment (Gürlük 2001, p. 11). In economic sustainability, products that benefit the society are produced and in the long-run value creation is aimed. (Nemli 2004, p. 81). Therefore, for economic sustainability, the financial performance of businesses and how well they manage the other capital elements such as people, production, and natural capital are important. Environmental Dimension of Sustainable Development Although rapid developments in science, technology, and industry and the steady increase in production opportunities make human life easier, they also cause environmental deterioration, global warming, acid rain, increasing greenhouse gases, depletion of ozone layer, increasing chemical wastes, water and soil pollution, diminishing forest areas, and desertification. After the United Nations Environment

4 The Importance of Sustainability and Sustainability Reporting

49

and Development Conference, many environmental organizations have been established and many environmental protection declarations have been issued. The environment is regarded as natural capital in terms of environmental sustainability and renewable and non-renewable resources are grouped as environmental operations. Environmental sustainability requires the use of non-renewable and renewable resources with caution (Steurer et al. 2005, p. 271). Social Dimension of Sustainable Development The social dimension of sustainable development particularly focuses on human development. Besides basic needs like food, housing, security, equality, health, freedom, education, employment are also important subjects. At this dimension, strategy, mission, vision, and practices of a business must take into account the employees, society, local population, suppliers, and stakeholders. For this dimension, businesses have to provide their employees with assistance in training and career development, provide them with safe work environment, be non-discriminatory on wages and promotions, and provide health insurance. In addition, businesses must release their activity reports by communicating with their shareholders with transparency during decision-making processes and in gathering information. Regarding this dimension, businesses should also contribute to the development of universal principles of human resources.

4.3

Corporate Sustainability

The topic of corporate sustainability has been frequently discussed in recent years. There are two important developments that lay the groundwork for the emergence of this concept. The first one is the Brundtland Report published by the World Environment Development Commission in 1987 and the second is the concept of triple bottom line that emerged in 1990s. The Brundtland Report emphasizes the efficient use of resources. In the concept of triple bottom line, it is stated that economic sustainability in the short term can bring success but it will not be sufficient in the long run alone. Social and environmental sustainability is also important for long-term success in economic sustainability (Besler 2009, pp. 1–3). The definition of sustainability approach at the business level is corporate sustainability. According to Şenal and Aslantaş Ates (2012), efficient use of economic, environmental, and social factors by businesses to provide long-term benefits provides corporate sustainability (p. 85). If the business provides sustainability, then the sustainability of the sector and therefore the country and the world is ensured. According to Dyllick and Hockert (2002), corporate sustainability as a mix of ecological and social sustainabilities requires the corporations to focus on long-term gains rather than short-term gains (p. 132). According to Hahn and Scheermesser (2006), rather than merely producing and creating value for the economy, businesses provide corporate sustainability by eliminating or reducing the negative

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externalities that they generate during their normal activities (p. 151). According to Tokgöz and Önce (2009), businesses are also investing in future while learning a new business model to ensure corporate sustainability (p. 267). Businesses can provide corporate sustainability by developing strategies and approaches to reduce damage to the environment during the manufacturing process (Yavuz 2010, p. 64). What encourages the businesses to promote corporate sustainability is the increases in brand value, trust and reputation and motivation of personnel that result in increased profits, sustaining competitive advantages and the facilitation of financial support opportunities from international investment corporations (Kuşat 2012, pp. 229–230). Businesses now attach more importance to social responsibility activities in order to separate themselves from fraudulent businesses. For businesses, not only profitability and shareholder shares, but also corporate social responsibility (CSR) is important. Corporate sustainability, corporate social responsibility, and corporate governance are inseparable concepts for businesses. The concept of corporate social responsibility is gradually being replaced by the concept of corporate sustainability, and instead of corporate social responsibility reports, sustainability reports are now being published. Corporate governance as a corporate sustainability strategy focuses entirely on financial sustainability. After big business scandals, corporate governance has become very important for businesses. Corporate governance reports have become important in investors’ decision making (Aras and Crowther 2008, p. 440). With global crises, corporate management is the way to sustainability of corporate success. Corporate governance firms provide businesses with risk management for both maintaining their assets and preventing crises they may encounter. In other words, through corporate governance, the financial goal that is determined for sustainability is achieved by ensuring business continuity, more ethical and proper business practices and avoiding risks (Sancar 2013, pp. 74–81). Therefore, a good corporate governance will promote sustainability in general (Aras and Crowther 2008, s. 441). Corporate governance is the assurance for sustainability of business performance. Corporate governance implies that the management and controllers of the business are transparent, accountable, fair, responsible, and reliable. So when all these principles are met, sustainability will be ensured. It is important to monitor and control all the other factors that target the profitability of the business in the new understanding that the profit is not the only factor that maximizes the business value. Corporate governance is therefore a reassurance for the sustainability of business processes (Demirkaya 2014, p. 135).

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51

Factors and Theories Contributing to Corporate Sustainability

Purpose of businesses in corporate sustainability is maximization of profits and to include stakeholder groups in their areas of responsibility to ensure continuity of economic performance. Problems faced by businesses in corporate sustainability are economic and administrative. Economic problems are mostly related to the inefficiency and ineffective use of production factors, whereas administrative problems are usually the result of poor inter-company communications and the inability of managers. The problems regarding competitive business however is both a result of economic and administrative issues (Kuşat 2012, p. 238; Chung-Fah et al. 2011, p. 221). In order to overcome these deficiencies, along with corporate sustainability concept, sustainable development, CSR, social stakeholder theory, and corporate accountability theory come out as the factors and the theories that contribute to the corporate sustainability. These elements and theories are examined under separate headings below. Sustainable Development Balancing the need for economic growth with environmental protection and social equality is called sustainable development. This concept was first introduced in 1987 in the Brundtland Report published by the World Commission on Environment and Development. Sustainable development benefits corporate sustainability by uncovering the environmental, social, and economic performances of businesses and encouraging businesses to work in these areas (Wilson 2003, p. 2). Corporate Social Responsibility It is a fact that businesses have responsibilities toward society. The concept of CSR has gained importance as the concept of sustainability has increased in the world (Şenal and Aslantaş Ateş 2012, p. 85). According to Özdemir (2007), CSR takes into account every decision taken by the business world and the effects of each activity on its social stakeholders (p.1). While the image and brand loyalty of companies that seriously implement CSR practices, motivation and productivity of personnel, market share and sales, customer loyalty, product quality increase, and costs decrease with time and risk management becomes effective by providing corporate training (Weber 2008, pp. 247–250). CSR provides a sustainable approach in terms of ethics and accountability. Businesses are paying attention to CSR implementations to ensure sustainable development. CSR differs because of the differences in competitiveness and business areas and due to the different business practices applied to fulfill their responsibilities (Moon 2007, p. 298). Social Stakeholder Theory In a traditional management concept, the answer to the question of who is entitled to the business as the beneficiary is shareholder, whereas in the concept of sustainable development, all segments where the business is relationship with are

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considered part of the answer (Demirkaya 2014, p. 120). Businesses are also involved in many different segments of the society when they operate in the environment they are in. All parties that are involved in the business in the society, affected by the activities of the business and affecting the business by its activities are called “stakeholders” (Doğru 2012, p. 21). It is very important for the success of the business to establish good relations with its stakeholders. It is aimed to take into account the expectations and needs of all stakeholders when carrying out the activities of the businesses (Özalp et al. 2008, p. 70). Corporate Accountability Theory The concept of accountability states that businesses should be affected by their external environment in their activities and be held responsible for these activities. It means that the business has a responsibility of proving the correctness of the decisions taken within the business and is held accountable. Accountability and transparency are interrelated concepts. The fact that the business activity reports are in conformity with the truth is based on the principle of transparency, while the proof of the validity of the decisions taken is related to the accountability principle. The scope of accountability which requires management accountability only to business shareholders in a traditional management approach has been extended to the concept of sustainability. More explicitly, it has been shown that businesses need to meet expectations not only in terms of their financial performances, but also in their environmental and social performances (Tokgöz and Önce 2009, p. 258).

4.5

Corporate Sustainability Principles

Economic success, environmental justice, and social equality must be achieved simultaneously in order for the business to succeed in achieving corporate sustainability These principles are also necessary to ensure sustainable development at the same time (Bansal 2005, pp. 199–200). Businesses that take corporate sustainability principles into account increase their environmental and social sustainability as well as their economic sustainability. Businesses seeking economic success must effectively manage their tangible and intangible capitals (Tüm 2014, p. 63). Environmental justice is achieved with more responsible use of renewable and non-renewable resources and by protecting the natural capital while performing the business operations. (Doğru 2012, p. 27). Social equality is to provide prosperity to the society through corporate social responsibility applications. With the application of social responsibility projects, people are equally provided access to resources (Sarıkaya and Kara 2007, p. 227).

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4.5.1

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Sustainability Reporting

Reporting that presents financial statements and is prepared in accordance with accounting principles in order to inform business partners and potential investors first emerged in the nineteenth century. The changes in society structure since 1970s, along with awareness in social justice and social equality, and social issues have also been included in the reports (Schaltegger and Burritt 2010, p. 382; Yanık and Türker 2012, p. 297). From a sustainability and stakeholder perspective, financial accounting is insufficient to obtain the expected benefits from reporting and has received a number of criticisms. Financial accounting has been criticized as limiting business operations to a narrow perspective, deeming profit and profitability as priority, ignoring social and environmental events, and lacking in assessing environmental impacts of corporate activities (Schaltegger and Burritt 2010, p. 376). It has also been understood that businesses are responsible for their activities not only toward their partners and investors but also toward society. With increase in social responsibility of businesses, social reports that hold social responsibilities such as employment, social relations, and ethics held in the foreground have begun to be created. Natural disasters, ecological disasters, climate change, and environmental reports have gained importance in the 1980s and 1990s. In these years, UK made environmental reporting a requirement (Aksoy 2013, p. 28). By the year 2000, corporate social responsibility reports, in which environmental and social information were presented together, gained importance. It has been understood that users of the financial statements need reports that include not only financial information but also non-financial information. In addition to profitability ratios, businesses have started to make reports on how sensitive their products are to employees, collectors, and the environment (Yanık and Türker 2012, p. 297). Besides the topics addressed in corporate responsibility reports, these reports, which surface as sustainability reporting, explain the impacts of environmental and social performance of businesses on economic performance. Sustainability reports where additional disclosures are made to balance environmental and social performance with economic performance are used synonymously with various concepts such as triple bottom line reporting, corporate social responsibility reporting, non-financial reporting (Çalışkan 2012, p. 52). Sustainability reports are presented in various forms. In addition to financial reports, these reports may be presented to stakeholders as three P reports, as well as activities in economic, social, and environmental areas under the heading of sustainable development in the activity reports of the businesses. A separate sustainability report can also be given integrated into the activity report (Aksoy 2013, p. 30). In order to implement and internalize the sustainability by businesses, it should first of all be traceable and measurable. This is possible through sustainability reporting. Sustainability reports show that there are differences among countries and even among sectors. In developed countries such as the USA, the UK, and

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Australia, sustainment reports contain qualitative information in many areas such as number of employees, salary and bonuses, and employee training. It is known that the number of sustainability reports is low in developing countries. The main reasons for this are the lack of regulations requiring disclosure of environmental and social issues in the annual activity reports, the lack of qualified accountants who can measure the environmental impact of business activities and determine the costs, and the additional costs incurred by businesses (Gao et al. 2005, p. 15).

4.5.2

Sustainability Reporting in Small- and Medium-Sized Businesses

The share of SMEs in total in the world is over 96%. This ratio is 99% in Germany, Japan, and France, while it is 99.77% in Turkey. In Turkey, 78% of total employment, 55% of total value-added, 65.5% of total sales, 50% of total investments, 60.1% of total exports, 24% of total loans are carried out by SMEs. Therefore, as the rest of the world, the place of SMEs in the economy is very important in Turkey. It is known that SMEs play an important role in helping economic and social developments of countries as they rapidly adapt to the changing market conditions, have flexible production structures, achieve balanced growth among the regions, and help reduce unemployment (Ergün 2012, p. 4). The life span of businesses in Turkey and in the world is getting shorter. 80% of the businesses in Turkey cannot reach the fifth year and 96% in the tenth year. While the role of SMEs in the country’s economy is so important, the sustainability of businesses, especially SMEs’ life spans, is at the forefront. For this reason, ensuring sustainability in SMEs presents an important problem. The most important reasons why SMEs cannot achieve sustainability are corporate and managerial problems. SMEs are lagging behind in sustainability performance all over the world as business size is a very important factor in sustainability performance. The issue of preparing sustainability reports is also of utmost importance for SMEs. Stakeholder demands have increased for sustainability reporting. SMEs had to prepare sustainability reports in order to keep up with competitors. Sustainability reports provide SMEs with the opportunity to tell their own positive business stories, ease of financing, advantages in risk management in the reporting process, product and process renewals, as well as being able to distinguish SMEs from competitors (Grandar and Purcell 2012, pp. 5–6).

4.5.3

Sustainability Reporting Applications

The sustainability reporting approach is basically divided into two. These are voluntary and compulsory reporting approaches. The voluntary reporting approach

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is based on market efficiency. If business stakeholders need not only financial information but also social and environmental information, this information is voluntarily published in sustainability reports or other named reports. In the compulsory reporting approach, businesses have to report on economic, social, and environmental issues regularly with legal arrangements. The purpose of compulsory reporting is to prevent fraudulent activities, protect investors, reduce costs, and transfer information reliably to stakeholders (Aksoy 2013, p. 33). The compulsory reporting approach is preferred because of its ability to change corporate culture, provide comparability, eliminate shortfalls in voluntary reporting, reduce costs, and treat investors equally. On the contrary, it can be said that the approach is not preferred due to the lack of consideration of sectoral differences, inapplicability of a single model for every business, lack of flexibility for unusual situations, and reluctance on innovation. On the other hand, the voluntary reporting approach is preferred due to its flexibility, suitability, and easy adaptation to various sectors; however, it is known that there are deficiencies in this approach such as causing conflict of interest and inefficient use of resources (Aksoy 2013, p. 34). Apart from voluntary and compulsory reporting approaches for sustainability reporting, different approaches have also been developed. The first approach is to prepare sustainability reports according to sustainability standards established by certain corporate, not by legislation. The second approach is the use of voluntary and compulsory approaches in combination, while the other approach is the integrated reporting approach in which financial reports, sustainability reports, and corporate governance reports are presented in a single report in relation to one another. There is no single package of internationally recognized financial reporting standards for sustainability reporting. For this reason, it is left to their own preferences in which format, in what frequency, what data should be reported by the businesses. In this way, several different sustainability reporting standards have been developed. This has prevented sustainability reports from having a common structure. Therefore, it is difficult to compare sustainability reports prepared for different standards or guidance. Therefore, reporting principles have been published by international organizations to support each other. The common side of these principles is to focus on many issues such as economic, environmental, social, and managerial issues related to sustainability. The most preferred guide for businesses is the Global Reporting Initiative Guide. The GRI guidelines are also supported by international consulting firms such as Deloitte, Ernst and Young, KPMG, PricewaterhouseCoopers (English and Schooley 2014, p. 27).

4.5.4

Sustainability Reporting and Accounting Relations

Accounting is a profession that is not indifferent to the level of public expectations, the nature of business activities, and the changing level. Historically, the first members of this profession were mostly specialized in bankruptcy and

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bookkeeping. However, it was necessary for these professionals to diversify their business in the field of accounting by providing services such as consultancy services to adapt to changing business life and to continue the profession. Sustainability has become an important issue in this sense in recent years. Therefore, accounting practices now include corporate sustainability (Yönet 2010, pp. 73–76). In addition, the role of the accounting profession in sustainability has become crucial as a result of the need by businesses for reports that present non-financial as well as financial information. The reporting of the activities that are caused by the external environment and affecting the business operations together with the concept of sustainability has been the main function of the accountancy. Reporting on social performance together with financial performance has come to the fore. In this sense, sustainable, i.e., social reporting, includes not only the economic, but also the environmental and social success of business operations. The reports include not only financial information but also non-financial information, revealing the role of accountancy on sustainability. As an accounting method that preserves sustainability by providing quality information to businesses, the duty of sustainability accounting is not only to document collection, classification, and registration but also to report on environmental and social consequences for its sustainability and development. In this respect, the aim of sustainability accounting is to measure the sustainability performance of the business, to provide accountability to partners, and to contribute to the senior management decision-making process (Yönet 2010, p. 72; ICAEW 2004, p. 12).

4.6

Sustainability Measures

Sustainability of businesses is measured by the benefits they provide for sustainable development. The benefit to sustainable development is expressed as sustainability performance. Indicators/indexes and integrated assessment methods are used in assessing sustainability. The most effective way to measure sustainability performance is to measure performance with the help of indexes. Sustainability indexes have been developed by the world’s leading stock exchanges in order to compare sustainability activities of businesses. The first sustainability index Domino Social Index was developed in the US in 1990. Subsequently, the Dow Jones Sustainability Index (DJSI) was initiated by Dow Jones in 1999 and the UK’s first sustainability index was developed in 2001 by the British firm FTSE. The most used index in assessing sustainability performance is the “Dow Jones Sustainability Index.” In 2010, studies on the development of sustainability index started by Borsa Istanbul in Turkey. Index calculations started from November of 2014. Businesses including the BIST30 index in the first stage, the BIST50 index in the second stage, and the BIST100 index in the third stage were evaluated. The purpose of the index is to increase the understanding of sustainability among businesses by creating an index that is traded on the Stock Exchange in Istanbul and has high levels of

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corporate sustainability performances. The index measures how businesses approach sustainability issues such as global warming, depletion of natural resources, reduction of water resources, health, and employment. In addition, corporate sustainability performances of businesses will be measured, so that businesses will have the opportunity to compare locally and globally. Investors will be able to distinguish and invest in businesses that embrace sustainability and corporate social responsibility, so that businesses that are indifferent will gain a competitive advantage (Borsa Istanbul 2015).

References Aksoy, Ç. (2013). Scale suggestion for evaluation of sustainability performance and its application in the establishments in Turkey (Published doctorate thesis). Marmara University, Institute of Social Sciences, Istanbul. Altunbaş, D. (2008). The role of local governments in urban sustainability: Izmir metropolitan municipality example (Published graduate thesis). Çanakkale Onsekiz Mart University, Institute of Social Sciences, Çanakkale. Aras, G., & Crowther, D. (2008). Governance and sustainability: An investigation into the relationship between corporate governance and corporate sustainability. Management Decision, 46(3), 433–448. Bansal, P. (2005). Evolving sustainability: A longitudinal study of corporate sustainable development. Strategic Management Journal, 26, 197–218. Besler, S. (2009). Corporate sustainability through management approaches. Istanbul: Beta Edition Publishing. Beyhan, S. G., & Ünügür, S. M. (2005). Sustainable tourism and identity model in the context of contemporary needs. ITU Review, 4(2), 79–87. Chung-Fah, H., Wang, J., & Lin, T. (2011). Resource sufficiency, organizational cohesion and organizational effectiveness of emergency response. Natural Hazards, 58, 221–234. Çalışkan, A. (2012). Sustainability report. Journal of Accounting and Taxes World, 1, 46–68. Demirkaya, M. A. (2014). Ensuring sustainability by financial planning and financial risk management in SMEs and an application example (Published doctorate thesis). Marmara University, Institute of Social Sciences, Istanbul. Doğru, G. (2012). The role of strategic human resources management in corporate sustainability. (Published graduate thesis). Dokuz Eylül University, Institute of Social Sciences, İzmir. Dyllick, T., & Hockerts, K. (2002). Beyond the business case for corporate sustainability. Business Strategy and the Environment, 11(2), 130–141. English, M. D., Schooley, D. K. (2014). The evolution of sustainability reporting. Accounting and Auditing, pp. 26–36. Ergün, N. (2012). Place and importance of SMEs and entrepreneurs in Turkish economy. Key Efficiency in Development, 287, 4–6. Gao, S., Heravi, S., & Xiao, J. (2005). Determinants of corporate social and environmental reporting in Hong Kong: A research note. Accounting Forum, 29, 233–242. Gladwin, T., Kennely, J., & Krause, S. T. (1995). Shifting paradigms for sustainable development: implications for management theory and research. Academy of Management Review, 20(4), 874–907. Grandar, A., & Purcell, J. (2012). A guide for assurance on SME sustainability reports. Australia: Southbank, CPA. Gürlük, S. (2001). Rural development and sustainable development in the world and Turkey. Journal of Uludag University Faculty of Economics and Administrative Sciences, 19(4), 1–12.

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Hahn, T., & Scheermesser, M. (2006). Approach corporate sustainability among german companies. Corporate Social Responsibility and Environmental Management, 13(2), 150–165. https://www.borsaistanbul.com/docs/default-source/genel-kurul-2015/bias-2015-olagan-genelkurulunda-yapilan-sunum.pdf?sfvrsn=6. July 22, 2014. ICAEW, Institute of Chartered Accountants in England and Wales. (2004). Sustainability: The Role of Accountants. http://www.icaew.com/*/media/Files/Technical/Sustainability/ sustainability-the-role-of-accountants-2004.pdf. July 22, 2014. Kuşat, N. (2012). Corporate sustainability and inner elements for sustainable businesses. Afyon Kocatepe Üniversitesi Faculty of Economics and Administrative Sciences Journal, 14(2), 227– 242. Moon, J. (2007). The contribution of corporate social responsibility to sustainable development. Wiley Inter Science Published, Sustainable Development, 15, 296–306. Nemli, E. (2004). Sustainable development: Environmental and social approaches of companies. Istanbul: Filiz Bookstore. Özalp, I., Tunus, H. Z., & Sarikaya, M. (2008). A research on the perceptions of corporate social responsibility of students of faculty of economics and administrative sciences. Anadolu University Journal of Social Sciences, 8(1), 69–84. Özdemir, H. Ö. (2007). The impact of corporate social responsibility perceptions of employees on organizational identification, organizational commitment and job satisfaction: Application for Opet employees (Published doctorate thesis). Marmara University, Institute of Social Sciences, Istanbul. Özer, O. (2010). Corporate sustainability measurement: Sectoral comparative analysis of European and US companies (Published graduate thesis). Yıldız Technical University, Institute of Social Sciences, İstanbul. Özmehmet, E. (2008). Sustainable development approaches in the world and Turkey. Journal of Yaşar University, 3(12), 1853–1876. Sancar, G. A. (2013). Corporate governance in the context of corporate sustainability: The rise, development and evaluation of the concept. Selçuk Communication Journal, pp. 71–84. Sarıkaya, M., & Kara, Z. (2007). The role of the business in sustainable development: Corparate citizenship. Celal Bayar University Journal of Faculty of Economics and Administrative Sciences, 14(2), 222–233. Schaltegger, S., & Burritt, R. L. (2010). Sustainability accounting for companies: Catch Phraseor decision support for business leaders? Journal of World Business, 45, 375–384. Steurer, R., Langer, M. E., Konrad, A., & Martinuzzi, A. (2005). Corporations, stakeholders and sustainable development: A theoretical exploration of business-society relations. Journal of Business Ethics, 61(3), 263–281. Şenal, S., Aslantaş Ateş, B. (2012). Accounting and reporting for corporate sustainability. Accounting and Auditing Perspective Journal, pp. 83–97. Tokgöz, N., & Önce, S. (2009). Corporate sustainability: Alternative to traditional management approach. Afyon Kocatepe University Journal of Faculty of Economics and Administrative Sciences, 1(1), 249–275. Tüm, K. (2014). Corporate sustainability and accounting reflections: Sustainability accounting. Journal of Academic Approaches, 5(1), 58–81. WCED. (1987). Report of World Commission on Environmental and Development, Development and International Economic Co-Operation. Weber, M. (2008). The business case for corporate social responsibility: A company-level measurement approach for corporate social responsibility. European Management Journal, 26 (4), 247–261. Wilson, M. (2003). Corporate sustainability: What is it and where does it come from? Ivey Business Journal, 67(4), 1–5. Yanık, S., & Türker, İ. (2012). Developments in sustainability and social responsibility reporting. Journal of Istanbul University Faculty of Political Sciences, 47, 291–308. Yavuz, V. A. (2010). Concept of sustainability and sustainable production strategies in terms of businesses. Mustafa Kemal University Journal of Social Sciences Institute, 7(14), 63–86.

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Yönet, N. K. (2010). The role of professional accountants in sustainability reporting. Managementİstanbul University Faculty of Business Administration Economics Institute Journal, 21(65), 65–80. Zink, K. J., Steimle, U., & Fischer, K. (2008). Human factors, business excellence and corporate sustainability: Differing perspectives, joint objectives. Corporate Sustainability as a Challenge for Comprehensive Management, pp. 3–18.

Zeynep Şahin was born in Rize in 1981; he completed his primary, secondary, and high school education in Trabzon. He started his studies at the Black Sea Technical University, Faculty of Economics and Administrative Sciences, Department of Business Administration. In 2005, he started as Lecturer at the Black Sea Technical University, Vakfıkebir Vocational School, Department of Accounting and Tax Applications. In the same year, he earned a master’s degree in the Department of Econometrics at the Black Sea Technical University, Institute of Social Sciences and completed his master’s degree in 2008. He served as head of department between 2005 and 2008. Between 2008 and 2010, he served as Assistant Director. In 2017, he completed his doctorate at the Black Sea Technical University, Institute of Social Sciences, Department of Business Administration. Zeynep ŞAHIN, who still continues to serve as Lecturer at the Black Sea Technical University, Vakfıkebir Vocational School, is married, a boy and a girl’s mother. Fikret Çankaya was born in 1966 in Trabzon; he went to the elementary school at The Bakirköy Ahmet Hamdi Tanpinar elementary school in Istanbul, the secondary school and the high school at The Küçükçekmece High School in Istanbul. He received his B.A. degree in Economics from the Black Sea Technical University in 1990. Following his graduation, he started to study toward the degree of M.B.A. and became a Research Assistant in 1992 at the Black Sea University. He received his M.B.A. degree in 1993 with the thesis named The Fund Creating Capacity and Financial Analysis in the Insurance Sector. He enrolled the Ph.D. program in 1994 and graduated in 1999 with the thesis titled Evaluating The Quality Costs With the Accounting Focus and The Quality Costs Applications in Turkey at the department of Business Administration at the same university. He became Assistant Associate Professor and Associate Professor in 2001 and 2010, respectively, and then he became Professor in 2015 at the same university. He worked as Vice Dean at the Communication Faculty between the years 2006–2010 and Vice Chair at the department of business administration for the period between 2013 and 2015 at the same university. He has been Faculty Member at the same university since he got his Ph.D. degree.

Chapter 5

Sustainable Development and Industry Revolutions Meltem Okur Dinçsoy

Abstract The Industrial Revolutions are mainly divided into four groups which are Industry 1.0, 2.0, 3.0 and 4.0. It is obvious that the previous revolution triggers the new one and the process of entering the Industrial Revolutions differs from country to country. The importance of sustainability has systematically emerged for all nations, and 17 basic goals have been identified by the United Nations for leaving a better world for future generations. Therefore, the process of Industrial 4.0 revolution will make better contributions in achieving SDGs with more efficient use of natural resources, human power and the advance technology. Keywords Sustainable development Development Goals

5.1


Industry Revolutions
Sustainable

Introduction

The World Economic Forum in 2016 divided the Industrial Revolutions mainly into four groups as the First Industrial Revolution, the Second Industrial Revolution, the Third Industrial Revolution, and the Fourth Industrial Revolution. Recently, the same historical Industrial Revolution process is also categorized as Industry 1.0, 2.0, 3.0, and 4.0. When the revolutions are examined, it is obvious that previous revolution triggers the new one. Also, when the development processes of the countries are examined, the process of entering and completing the Industrial Revolutions differs from country to country. The UK was the leading country for the Industry 1.0 with its iron and coal reserves; however, Germany with its strong technology has led the Industry 4.0 and the countries which are unadaptable for the Industry 4.0 will gradually disappear from competitive world markets. The energy demand depending on mechanization in production increased during the all M. O. Dinçsoy (&) Department of Economics, Faculty of Economics and Administrative Sciences, Trakya University, Edirne, Turkey e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability, Volume I, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_5

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Industrial Revolutions. Fossil fuels were mainly used in the First and the Second Industrial Revolutions and renewable, clean or green energy technologies additionally gained importance in the third and the fourth Industrial Revolutions. The concept of sustainability has systematically emerged in all these industrial development processes by indicating natural resources are limited and exhaustive. The United Nations Development Program (UNDP), which is the global development network of the United Nations, identified The Sustainable Development Goals based on the common action of all countries and 193 countries signed the 2030 Sustainable Development Goals in January 2016. For leaving a better world for future generations, 17 basic goals have been identified, including poverty reduction, climate change—disaster risk, economic inequality, and democratic governance— peacebuilding. From the perspective of sustainability, unlike other Industrial Revolutions, Industry 4.0 process will make contributions in achieving these goals with more efficient use of natural resources, human power, and the advance technology.

5.2

Sustainable Development and the Goals

With the Industrial Revolution in the nineteenth century, agriculture using traditional methods (done by human and animal power) was replaced with harvesters and, consequently, the transition from a production style using manpower to a production style using mechanical power started. All these developments first spread to Europe and then, to the whole world, beginning to enhance people’s level of wealth. The increase in welfare brought along new socio-economic developments. The world population started to grow faster. The number of factories and people working in these factories increased. Industrial cities began to emerge. Railway networks enabled the transportation of food, raw materials and energy resources needed by people and production. While environmental, demographic, social and economic adversities triggered by intense industrialization and industrial development became the current research subjects after the 1960s, it became a necessity for all countries to take common steps for the future of the world. In this context, the Club of Rome that was established in 1968 and is still an active organization in the international arena commissioned to an MIT (Massachusetts Institute of Technology) team led by Meadows to prepare a report titled “The Limits to Growth” in 1972. In the report, the MIT team determined five fundamental factors—population growth, food production, industrialization, depletion of natural resources and environmental pollution and examined the relationships between them. In the report, Meadows et al. stated that mankind’s life on Earth will end within the next hundred year if the world’s population continues to grow in its current rate, industrialization and economic growth rate continue unchanged, food products are not diversified, new natural resources are not found to sustain production mechanism, and no cure is found to stop environmental pollution/degradation (1972, pp. XI–XVIII).

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The Brundtland Report1 published by the World Commission on Environment and Development in 1987 as the continuation of a process started with the acceptance of the “Declaration on the Human Environment”, the first global declaration on environment, in Stockholm in 1972 formed the basis of sustainability work extending to the present time. In addition, the “United Nations Conference on Environment and Development” held in Rio de Janeiro in 1992 witnessed developments that would lead the nations to the sensitive management of the environment.2 After a decade, the World Summit on Sustainable Development (Rio+10) took place in Johannesburg from 26 August to 4 September 2002 (MFA 2002). The goals commonly stated as “Sustainable Development Goals” or “Global Goals” comprise 17 universal actions to eliminate poverty, protect the planet and ensure that all people live in peace and prosperity. In addition to the Millennium Development Goals, they also include new areas such as climate change, economic inequality, innovation, sustainable consumption, peace and justice (UNDP 2018; Table 5.1). The sustainable development strategy added a new integration to development problem and suggests replacing short-term economic benefits with long-term and intergenerational social and ecological benefits (Han and Kaya 2004, p. 238). According to Schwab (2016, p. 16), Industry 1.0 started in 1760 and lasted until around 1840. It spearheaded mechanic production with the construction of railways and use of the steam engine. The Industry 2.0 took place at the end of the nineteenth century and early twentieth century. At this period, the benefits of electricity and assembly line enabled mass production. The Industry 4.0 started in the 1960s. It advanced with semiconductors, host computers (1960s), personal computers (1970s and 1980s) and Internet (1990s). Therefore, it was called computer revolution or digital revolution. Rifkin (2011, p. 41) claims that as result of high amounts of carbon dioxide emission in the Earth’s atmosphere with the use of coal, oil and natural gas for two centuries to maintain an industrial lifestyle, the entropy bills created by the First and Second Industrial Revolutions are about to mature. On the other hand, Özdoğan (2017, pp. 13–14) maintains that we started to build machines in the Industry 1.0, improved them with more efficiency in the Industry 2.0, and in the Industry 3.0, we perfected them by combining with computer and digital world while producing the most up-to-date versions. Thus, industry achieved a production speed and capacity it never had in its history while management costs and challenges were eliminated and the need for automation was met.

1

In the Our Common Future Report (Brundtland Report) published by the World Commission on Environment and Development (WCED) in 1987, sustainable development is defined as “meeting the needs of the present without compromising the ability of future generations to meet their own needs”. 2 The United Nations Framework Convention on Climate Change, the Rio Declaration on Environment and Development, the Convention on Biological Diversity and the Statement of Forest Principles were prepared.

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Table 5.1 Sustainable Development Goals Goals Goal 1 Goal 2 Goal 3 Goal 4 Goal 5 Goal 6 Goal 7 Goal 8 Goal 9 Goal 10 Goal 11 Goal 12 Goal 13 Goal 14 Goal 15 Goal 16 Goal 17 Source UN (2018)

Aim

Sustainability for

Poverty Hunger Health Education Gender equality Availability Access Economy Infrastructure Inequality Cities and settlement Consumption Climate change Oceans and seas Terrestrial ecosystems Peace Partnership

Everywhere Agriculture Well-being Lifelong learning Women and girls Water and sanitation Energy Growth and employment Industrialization Among countries Safeness and resilience Production patterns Urgent action Resources Biodiversity Justice Global

Mass production and excessive consumption constantly increased the energy need, which was met with fossil fuels to a large extent. Contrary to the first two Industrial Revolutions, there is a tendency towards more environmentally friendly and renewable energy resources instead of fossil fuels. The most important reason for that is increased education and declining costs depending on technology that has been rapidly advancing for the past two centuries.

5.3

Industry 1.0

In 1775, an engineer of Spanish origin named James Watt improved the steam engine, which was an idea that would revolutionize the world. This development would change the history of humanity entirely. The steam engine was invented before Watt; however, its areas of use were limited. Watt improved the functions of the steam engine with a couple of innovations and revealed the extraordinary potential of the steam. This invention paved the way for one of the three important leaps in the history of humanity. The first was the discovery and control of the fire, the second was the transition to farming, and the third was the use of the steam as a power source. With this invention, the human history entered a new era and mankind was saved from dependence on muscle strength for the first time while machines stepped in. From now on, the world entered a period that would change it very fast.

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Being a stagnant town prior to the revolution, Manchester came to life with the power of the steam engine. People from rural areas flooded in the city to work at the newly established factories. While Manchester was a small market town with a population of less than 10,000 in the eighteenth century, it reached 89,000 people at the end of the century and to 400,000 in 1851 while there were 900,000 people in the city in 1901 (Griffin 2014). Thus, Manchester went down in history as the first industrial city in the world. In Britain, the production of manufactured goods doubled in the second half of the eighteenth century, and there was an even faster growth in early nineteenth century. While 30% of labour force was employed in manufacturing and mining sectors in 1801, this rate went up to 40% after 30 years. Thus, Britain became a country of great urban manufacturing centres dominated by factory systems. While Britain was having a period of peace in the eighteenth century, France was preparing for the 1789 French Revolution, and thus, the Industrial Revolution was delayed in France. Though late, the country underwent the transformation experienced by Britain and joined her in the Industrial Revolution. The French Revolution was a politically significant development during the Industry 1.0. While France was the first country to be influenced with the Industrial Revolution, other countries such as Germany, Belgium, the USA, Russia and Japan were also affected from the revolution later, and the world entered a process of industrialization at a great speed. Industrialized countries gained power and helped the spread of capitalist world order. The use of the steam engine in locomotives and ships following the factories enabled the industrialized countries to go to distant places and set up colonies. In addition, the use of paper money instead of coins became popular under the leadership of these countries. Credit institutions, banks and central banks were founded, and consequently, industry improved further. Besides, “The Wealth of Nations” by Adam Smith became an important source for economy and sociology in this period. There were few cities in the world about 250 years ago and people used to live in the countryside. It continued unchanged for thousands of years until the invention of the steam engine. Following the Industrial Revolution, rural-to-urban migration increased and many cities were established throughout the world as in the case of Manchester. Development further accelerated thanks to the railways and railway networks built in these cities and millions of people moved to the cities in a short time, consequently paving the way for the emergence of megacities. The revolution also triggered the greatest mass migrations witnessed in the modern world. The global economy spread from the centre to the periphery rapidly. Increasing number of factories and people in the cities created air and environmental pollution. Urban population grew in various countries of the world, mostly in India, China, Japan and the USA. Furthermore, there were other changes in economic and social structure following the Industrial Revolution. Structural transformations took place in the production process. Traditional manufacturing made on the bench at home was moved to the factories (Özdemir 2014, p. 52). The spread of railways and water

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canals led to substantial developments in transportation area as well. There were also developments in healthcare area, which resulted in a growth in the world’s population. The end of feudalism came and those working with the soil started to become free. The peasants in the agricultural society became industrial workers in the city. Breakthroughs were witnessed in agricultural industry as well. With rural-to-urban migration, the family structure changed. The extended families of the past were replaced by a new family type called nuclear family. With the disappearance of feudalism, the aristocracy—the landowners of the past—were replaced by the capitalist bourgeoisie. Freedom movements gained momentum throughout the world. Enlightenment movements increased, which paved the way for the birth of modern science. Behavioural patterns of the societies evolved, giving way to the adoption of behaviours described as rational behavioural pattern. Consequently, a new society type called industrial society emerged (Table 5.2).

5.4

Industry 2.0

Industry 2.0 is usually dated 1870–1914. Although this revolution is considered in general as the continuation of the previous revolution, it brought along its specific innovations and technological leadership spread beyond the British borders. While the Industry 1.0 was spearheaded by coal, oil and electricity became the fundamental driving force in energy area in the Industry 2.0. With the use of electric power and transition to mass production, product range and output increased while production costs were reduced. In parallel, the wealth of societies increased thanks to the advances in technological and transportation area. In this second phase of the Industrial Revolution, the markets where coal, raw materials and industrial products were sold increased in value while the countries which were unable to share these materials started to fight, leading to the First World War. Social changes caused by the steam engine resulted in the birth of such regimes as capitalism and communism. In this period of substantial changes, countries like Britain, Germany and the USA conducted research to get more efficiency from the chemical energy in the coal. Thus, the science of thermodynamics was born and the new experiences influenced the military technology as well (Özilgen 2009, pp. 161–163; Table 5.3). The research conducted by a couple of scientists who were pioneers in the field of radio in 1906, and of electromagnetic, radiation and radio waves in the late 1800s and early 1900s was of significance in this period. Among them are renowned figures like Thomas Edison, Nikola Tesla, James Clerk Maxwell, Heinrich Rudolf Hertz and David E. Hughes. The first radio broadcast in 1922 by BBC made the radio a highly important media for communicating the news and diverse information to the society (http://www.ilkkimbuldu.com/radyonun-icadi/). The mass production of automobiles made Ford the symbol of the transition from agriculture to industry in the USA (Gelderman 2018). As result of

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Table 5.2 Primary technological developments in Industry 1.0 Year 1764 1775 1774 1775 1783 1783 1783 1784 1786 1804 1807 1809 1814 1816 1824 1825 1825 1830 1830 1831 1834 1834 1835 1838 1839 1844 1851 1858 1862 1862 1866 Source

Development/invention In Britain, cotton-spinning machine was invented to spin cotton brought from the colonies James Watt invented the steam engine Georges Louis Lesage patented the electric telegraph Jacques Perrier built a steam-powered ship (steamship) Joseph and Etienne Montgolfier, also called the Montgolfier brothers, flew the first hot air balloon The first parachute was used by Sebastian Lenormand Montgolfier brothers invented hot air balloon Andrew Meikle built the threshing machine The Scottish millwright Andrew Meikle invented the first threshing machine for agricultural use Friedrich Winzer (Winsor) was the first person to obtain a patent in gas lightning Robert Fulton used steam power in the ships and transoceanic voyages started Humpry Davy invented the first light bulb; however, it was not so successful (arc lamp) Joseph Nicéphore Niépce made the first permanent photographic image. It required 8 h exposure time to obtain the image Rene Laennec invented the stethoscope Steam engines were used in the locomotives for the first time George Stephenson built the first steam locomotive, Rocket, using advanced steam engines William Sturgeon invented the electromagnets The Germans invented a technique for sugar extraction from beet Barthelemy Thimonnier invented the sewing machine Michael Faraday invented the electric dynamo A. Y. Moore invented the combine harvester Henry Blair received the patent for the corn seed planter Charles Babbage invented the mechanical calculator Samuel Morse developed the Mors alphabet Kirkpatrick Macmillan invented the bicycle The first commercial telegraph service started in the USA with the invention of Samuel Morse Isaac Singer developed the first practical sewing machine Jean Lenoir invented the internal combustion engine Richard Gatling patented the machine gun Alexander Parkes invented the first plastic Alfred Nobel invented dynamite BT (2012), Buchanan (2018), Woodford (2018), Robin (2012), Kelly (2018)

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Table 5.3 Primary technological developments in Industry 2.0 Year

Development/invention

1870

The first monorail trolley system was used in the slaughterhouses, and the foundations of serial production were laid (Mass production started with the use of electric power. Later, the first electrically operated production line was used) Alexander Graham Bell invented the telephone while conducting work for enabling the deaf to hear Thomas Edison invented the durable light bulb that is still used today Ernest Von Siemens developed an electric train which was used as streetcar in the city Gottlieb Daimler and Carl Friedrich Benz found how to use efficiently in the internal combustion engine the gasoline which was a low-value by-product of the gas oil used in lamps (Benz made history as the inventor of the modern gasoline-powered automobiles. The development of internal combustion engine is one of the greatest developments in the world. As gasoline is lighter and produces more energy than coal, it supplanted the steam power produced from coal.) Marconi invented the radio and telegraph Ferdinad Von Zeppelin invented the rigid airship named Zeppelin to carry passengers The first radio wave was transmitted successfully Willis Carrier invented the air conditioner George Claude invented the neon light Wilbur and Orville Wright—the Wright Brothers—flew their own aircraft by adding two wings to the gasoline engine (With their engined aircraft design, the most significant step in the history of aviation was taken) Benjamin Holt manufactured a tractor Auguste and Louis Lumiere invented colour photography The first helicopter was built Henry Ford revolutionized factory production with his assembly-line methods, and mass produced the Model T (The American businessman Ford brought mass production to the automobiles, and thus, he is considered as the symbol of the shift from agriculture to industry in the USA (Gelderman 2018)) Charles Franklin Kettering invented the first automobile electrical ignition system Garrett A. Morgan created the gas mask Henry Ford developed the Fordist production model Brearly Henry invented stainless steel Shortwave radio and flip-flop were invented BBC started its first radio broadcast Robert H. Goddard built the first liquid-fuelled rocket John Logis Baird invented the television Vannevar Bush invented the analogue computer Edwin Howard Armstrong invented the frequency modulation (FM) Chester F. Carlson invented the xerography The first jet engine was built Igor Skorsky built the Sikorsky helicopter which was the first prototype of the modern helicopters Dr. William Reich Orgon invented the accumulator (continued)

1876 1879 1879 1885

1895 1898 1901 1902 1902 1903

1904 1907 1907 1908

1911 1914 1914 1916 1919 1922 1926 1925 1931 1933 1937 1937 1939 1940

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Table 5.3 (continued) Year

Development/invention

1942 John Atanasoff and Clifford Berry built the first electronic digital computer 1944 Willem Kolff built the kidney dialysis machine 1945 The atomic bomb was invented 1945 The computer named ENIAC was built for military purposes 1946 Percy Spencer invented the microwave oven 1947 The first mobile phone was invented (not with portable size) 1947 Bardeen, Brattain and Shockley invented the transistor 1951 Charles Ginsburg developed the first videotape recorder (VTR) 1952 Edward Teller and his team built the hydrogen bomb 1953 Texas Instruments developed the transistor radio 1955 The fibre optic cable was produced and put in use 1956 The hard disc was used in a computer for the first time 1959 Jack Kilby and Robert Noyce invented the microchip 1964 John George Kemeny and Tom Kurtz developed BASIC programming language 1967 The first handheld digital calculator was created 1968 Douglas Engelbart invented the computer mouse 1968 The first computer using integrated circuits was built 1968 Robert Dennard invented RAM (random access memory) 1969 Arpanet (the first Internet) was invented 1969 ATM was invented Source BT (2012), Buchanan (2018), Woodford (2018)

developments concerning the automobile and its transformation into a vehicle that could be used not only by the rich but also everybody, the automobile became the main prop of the American economy. With the mass production of the automobile, the American economy boomed, great highways and bridges were built, and migration increased. Both internal migration and immigration from every part of the world to the USA provided cheap labour and thus, national exports, population and wealth increased. With these developments led by Ford, two prominent movements emerged. The first is Fordism which is a production system developed until 1914. As the first movement of capitalist development, Fordism introduced the assembly line in production, paving the way for mass production. And there is the second movement of capitalist development called post-Fordism since the 1970s. This movement brought along a more efficient approach in satisfying consumer needs with a flexible production and accumulation regime, resulting in the increase in productivity (Saklı 2007, pp. 1–18). In 1945, a group of scientists built a computer called ENIAC for military purposes. The computer used vacuum tubes and was pretty fast compared to its predecessor. With the ENIAC, the transition to electronic computer started and mechanical hardware gave way to electronic circuits and transistors were replaced

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by integrated circuits and the developments in computer technology gained momentum since 1964 (BilgiUstam 2018). Consequently, the production of faster, more reliable and cheaper computers started. In this period defined as the second Industry 2.0 by the historians, Germany and the USA led the way in the application of science to technology in a more systematic way. Despite being less fortunate in terms of coal and lacking in visionary workers compared to Britain, Germany closed this gap soon through technical training and took a leading part in this revolutionary process. Germany and the USA also made the twentieth century the age of oil, automobiles and aircrafts (Morris 2010, pp. 81). While Britain was the centre for the accumulation of knowledge during the development of steam technology, accumulation of knowledge during the developmental process of internal combustion engine concentrated in Germany and opened the way for the development of jet engine. In parallel, significant advances were made in space technology in the Nazi period. With the defeat of Germany in the Second World War, Russia and the USA each captured one facility that was developing this technology and took the scientists working in there to their own countries by force at the end of the war. Thus, the centre for the accumulated knowledge of space technology changed and technological development continued with the competition between the USA and Russia (Özilgen 2009, p. 174). In brief, steel, chemicals, electricity, transport, production engineering, agriculture and food processing, household technology and human welfare dominated the Industry 2.0.

5.5

Industry 3.0

The world is currently undergoing is called the age of information technology that started after the Second World War and gained momentum after the 1970s with the digitalization of production. We can claim that this revolution coinciding with the globalization of industry and trade began with the integrated use of electronics and information technologies. From the beginning, the most important characteristics of the oil age were giantism and centralization. Drilling for fossil fuels like oil requires large amounts of capital, vertical scale economies, top-down command and supervision structure, because oil trade is not only one of the biggest industries in the world, but also collecting, processing and distributing energy is a costly business. Furthermore, automotive, modern finance, energy, telecommunications and construction industries that emerged from the oil culture have a tendency to grow for having their own scale economies, and they need large capital and have a central organization just like the oil industry (Rifkin 2011, pp. 157–158). The theory that best explains top-down organizational structure characterizing the first two Industrial Revolutions is trickle-down theory. According to this theory, if those at the top of the industrial pyramid depending on fossil fuels make profit, a

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good deal of this wealth goes to those at the lower steps and thus, everybody in the economy benefits (Aghion and Bolton 1997, p. 151). In the first two Industrial Revolutions, those at the top of the pyramid received a very large share compared to others. Industry 3.0 occurred at a time when the resources in the world were depleting very fast. This period gave rise to the idea that the sustainability of the world became difficult due to the environmental pollution and irresponsible use of resources as result of the first and second Industrial Revolutions, and thus, urgent solutions were needed. To protect the natural life and environment and achieve sustainable development, remedies were sought to prefer renewable energy resources that are less harmful to the nature instead of fossil fuels and to reduce energy consumption with technological developments. In addition, the fact that fossil fuels like coal and natural gas are non-renewable and will be exhausted and the search for alternative energy resources like renewable energy have become a significant subject in this period. The availability of renewable energies in all parts of the world unlike the fossil fuels and their being free mostly have become the motives to prefer them and introduced ideas to create local healthy economies. The significant characteristics of this period are widely and economical use of renewable energy like solar, wind, ground and hydrogen energies, buildings’ capacity to produce their own energy, development of energy storage techniques, green economy, transition to zero-emission transportation with electrical transportation systems, and development of opportunities to allow Internet and energy infrastructures work in concert. Synthetic goods, computer technology, microelectronic technology, fibre optics, telecommunications, biogenetics, bio-agriculture and laser technology have become determining factors in this period. According to Rifkin (2012, pp. 4052–4057), there are five pillars for Industry 3.0 which are increasing the use of to renewable energy; altering the buildings for green micro-power systems with renewable energies; distributing the hydrogen and other storage technologies in the buildings with an infrastructure to store; transforming the current energy networks into an energy system that is sharable in the continents just like the Internet network; and replacing the transportation systems to electric vehicles that can buy and sell through energy network which is smart, interactive and continental (Table 5.4). Microcredit3 practice first started in a small village in Bangladesh in the 1970s by providing loan to 42 destitute women. Due to its successful results, the target group benefitting from this service expanded and it turned into a microfinance system adding services to its service range like savings, insurance, and money transfer (Gökyay 2008, p. 104). Beginning in the 1990s, large-memory and fast computers, powerful programming languages and operating systems were developed (BilgiUstam 2018).

3

Microcredit is a small capital system extending credit, with no collateral and guaranty, to low-income women to engage in income generating activities on their own.

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Table 5.4 Primary technological developments in Industry 3.0 Year 1970 1971 1971 1971 1972 1973 1975 1976 1979 1979 1979 1981 1981 1984 1984 1985 1987 1988 1989 1990 1991 1993 1995 1995 1996 1997 2001 2001 2003 2005 2006 2007 2008 2009

2010 Source

Development/invention Alan Shugart invented the floppy disc The dot-matrix printer was invented The liquid-crystal display (LCD) was invented by James Fergason Faggin, Hoff and Mazor produced the microprocessor The word processor was invented The Ethernet (local computer network) was invented by Robert Metcalfe and Xerox The laser printer was invented The ink-jet printer was invented The cell phone was invented Seymour Cray invented the supercomputer Walkman was invented MS-DOS was invented The first IBM PC was invented CD-ROM was invented Apple invented Macintosh Windows operating system was invented by Microsoft The first 3D video game was invented The digital cellular phone was invented High-definition television was invented The World Wide Web and Internet protocol (HTTP) was created by Tim Berners-Lee The digital answering machine was invented The Pentium processor was invented The Java computer language was invented DVD (digital versatile disc or digital video disc) was invented Web TV was invented The gas-powered fuel cell was invented Self-cleaning window was invented by PPG Industries The iPod was produced Toyota produced a hybrid car YouTube, online video sharing and viewing community, was launched by Steve Chen, Chad Hurley and Jawed Karim in 2005 The iPhone was invented Hilmi Volkan Demir and his students Sedat Nizamoğlu, Tuncel Özel and Emre Sarı developed a light source using nanotechnology as an alternative to Edison’s light bulb Sony developed a system to generate electricity from sugar The wearable keyboard was built. When you use the light reflected to your arm as a button, the system realizes which button is pushed by listening to the sound generated by your contact Square, a payment platform created by Twitter co-founder Jack Dorsey, transforms your mobile phone to a pos device and enables shopping with credit cards BT (2012), Buchanan (2018), Woodford (2018)

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Core memory used in old computers started to be replaced with magnetic internal memories, and computer costs have decreased consistently. TOMs’ system created in 2006 by Texan entrepreneur Blake Mycoskie is an entrepreneurial trade model. Founded as a social enterprise, it uses the business model “Buy one, give one”. According to this model, for every pair of shoes sold at TOMs, a pair is donated to a child in need. Similarly, a portion of the profit obtained from every eyeglass sold at TOMs is used for the treatment of people with visual impairment in developing countries (https://www.bulusum.biz/HaberDetay/6). This business model has been adopted by the firms, enterprises and consumers desiring to have both commercial and social value in the business world. The concept of carbon footprint and its reduction has also gained importance in this period. Carbon footprint is defined as “the harm created by carbon dioxide (CO) emission, which is considered as the primary reason for global warming, leads to the formation of gases causing greenhouse effect and is released to the atmosphere with the use of fossil fuels, as result of energy use for the production of goods directly or indirectly consumed by individuals and companies” (http://www. karbonayakizi.com). On the subject, various social projects were prepared and put into implementation in several parts of the world. For example, projects such as carsharing and CouchSurfing4 contributed to reduce the carbon footprint of thousands of tourists. Similarly, an international transport network company developed, marketed and run the mobile application Uber in 2015. Travis Kalanick, Founder of Wikipedia, wondered if there was any way to enable people to use the same roads for the purpose of sharing travel time, decreasing costs and reducing carbon footprint, and finally developed this model. In the first eight months, the roads and sky in Los Angeles were saved from 7.9 million miles and 1400 metric ton of carbon dioxide. Kalanick claims that it will also benefit the passengers in the suburbs (https://www.uber.com/tr/). With the technology in our pockets today, and a little smart regulation, we can turn every car into a shared car and we can reclaim our cities starting today.

5.6

Industry 4.0

Industry 4.0 can be defined as a revolution that emerges with the management of production processes though scientific methods based on data as well as smart production methods. According to Economic Forum journal published by the Union of Chambers and Commodity Exchanges of Turkey (TOBB), while

4

CouchSurfing is a hospitality network based on the idea of using social networks in tourism and people‘s helping each other. It helps people to get in touch with other people who will host and show hospitality to them at places they visit (Kaya 2016).

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industrial production and quality increases with Industry 4.0, raw material waste will be reduced, scarce resources such as water and electricity will not be used excessively, and consequently, the natural and environmental pollution will decrease (TOBB 2016, p. 18). On the other hand, other discerning characteristics of this period are the opportunities in marketing strategies offered by technology and networks. For example, the largest retailer (Amazon) does not have a single store while the largest accommodation provider (Airbnb) do not own any hotel and the largest transportation provider (Uber) does not have a single car (Schwab 2016, p. 170). Industry 4.0 continues to provide new opportunities in many areas ranging from the determination of system failures to reducing them, from environmentally friendly production techniques to resource saving, from sustainability to increase in productivity, from flexible production to cost reduction and from new service areas to new business models (Selek 2017). However, this process also has certain determinants (Rüßmann et al. 2015, p. 2). The Nine Pillars of Technological Advancement 1. 2. 3. 4. 5. 6. 7. 8. 9.

Big data and analytics Autonomous robots Simulation Horizontal and vertical system integration The industrial Internet of things Cybersecurity The cloud Additive manufacturing Augmented reality.

5.6.1

Big Data and Analytics

Big data covers all kinds of accumulated data ranging from working sheets to databases, providers and cloud services. Big data analytics is the process of examining all data sets collected from different areas such as postings on the Internet and databases, photograph archives and transactions recorded in the Internet to organize them in a practical format (Martinek and Stedman 2017). In addition, this kind of analysis allows organizations to use their data to have new opportunities. Consequently, it helps them to have more efficient operations, smarter business moves, higher profits and happier customers (https://www.sas. com/en_us/insights/analytics/big-data-analytics.html).

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Autonomous Robots

Autonomous robots can get information about their environments, work for an extended period of time without human intervention, move themselves throughout the operation without human assistance and can avoid situations that are harmful to themselves or people and property (https://www.robots.com/articles/viewing/whatare-autonomous-robots). Moreover, this kind of robots is capable of making their own decisions just like humans and act accordingly. An autonomous robot has the ability to perceive their environment, depends on programmed decisions to know this environment and can start a movement or manipulation in that environment (https://stanleyinnovation.com/what-autonomous-robots/).

5.6.3

Simulation

Simulation means making an imitation of something. Three-dimensional simulations of goods, materials and production processes are used in designing phases today. It is expected that the use of simulations in factory operations will become widespread. These virtual models developed using real-time data create the virtual reality of the physical world as well as machines, products and humans. Thus, operators expect to have the opportunity to virtually test machine parameters for the goods in the production line before arranging in a physical setting, cut down on setup times and improve product quality.

5.6.4

Horizontal and Vertical System Integration

Companies, suppliers and customers rarely have end-to-end linkage; i.e., most of the systems are not integrated. This is also true for engineering design, production and service functions. This system aims to ensure that companies, units and competences become more compatible with each other with the development of company-wide universal data integration networks.

5.6.5

The Industrial Internet of Things

IIoT, also known as industrial Internet of things, involves sensor data in industrial settings, machine learning that uses machine-to-machine (M2M) communication and automation techniques, and big data technology. Smart machines can capture data and communicate more accurately and consistently compared to humans. Therefore, they can enable companies to predict inefficiencies and problems earlier

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save money and time and support business intelligence work. Furthermore, IIoT has great potential in terms of quality control, sustainable and green practices, traceability of supply chain and supply chain efficiency in general (Aberle 2014).

5.6.6

Cybersecurity

Cybersecurity refers to technologies, processes and practices designed to protect networks, computers, programs and data against attacks, damage or unauthorized access. In the context of data processing, security covers both cyber security and physical security (Clark 2018). Effective cyber security reduces risk of cyber-attack and defends organizations and individuals from the unauthorized use of systems, networks and technologies (https://www.itgovernance.co.uk/what-is-cybersecurity).

5.6.7

The Cloud

Thanks to the development of cloud information technology, it has become possible to store and access large data sets on the Internet. In line with these opportunities, the concept of big data, one of the buildings blocks of Industry 4.0, can be put in place in the industry (Bulut 2017). Without computing services, the cloud platforms cannot combine automation, robotics or IIoT and provide new and innovative applications (Giraud 2016).

5.6.8

Additive Manufacturing

The concept of additive manufacturing (3D printing) refers the production by the addition of materials like plastic or liquid resin on top of each other. Thanks to the advanced technology, adding points are not seen in the product as these are wafer-thin layers. In this regard, 3D printers are classified differently among themselves. The most important element causing this difference is the technology developed specifically for the material (Dirim 2016).

5.6.9

Augmented Reality

Augmented reality enables to feel and experience a physical setting in the real world live, dynamically and real time with computer-generated sensory inputs (http://www.endustri40.com/artirilmis-gerceklik-augmented-reality/). It is considered that augmented reality will occupy a great part of our lives in the future. Also

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being an enhanced version of reality, live direct or indirect views of physical real-world environments are augmented with superimposed computer-generated images over the user’s view of the real world, and thus, the perception of reality is enhanced (http://www.realitytechnologies.com/augmented-reality).

5.7

Conclusion

While man, water and steam powers were critical for a weaving loom in the eighteenth century, the past two centuries witnessed the beginning of an industrial age in which the need for manpower has decreased with robots taking over production while it has become important to be good at efficiency, quality, flexible production, supply chains and technology as well as having competitive advantage. Although this revolution has not spread around the world yet, it has brought along fundamental changes for national economies such as flexible production with higher added-value and data-based decision making. While developed and developing countries that have been exploiting resources for mass production in the second and third revolutions have turned to materials and energy with the Industry 4.0, the transition to a more productive economy and more ecological technologies has become a necessity. The return of manufacturing industry to the advanced economy countries led to the beginning of a more dangerous scenario for the low-income countries that offer low-cost opportunities, because low labour cost is no longer a factor that increases the competitive power of firms. Although it is considered that Industry 4.0 will provide new professions for people, it is unlikely that it will offer the expected remedies to unemployment due the growth in world’s population. Consequently, the concept of sustainability has entered into a process of transformation from its theoretical and conceptual structure until today into a structure that benefits the environment more, extending to the Internet of things, smart technologies, smart cities, driverless vehicles, decision-making mechanisms with big data, sharing economy and healthier individuals who live longer.

References Aberle, L. (2014). Industrial internet of things (IIoT). http://internetofthingsagenda.techtarget.com/ definition/Industrial-Internet-of-Things-IIoT. Accessed 12.02.2018. Aghion, P., & Bolton, P. (1997). A theory of trickle-down growth and development. The Review of Economic Studies, 64(2), 151–172. BilgiUstam. (2018). Bilgisayarın İcadı, Tarihçesi ve Dünyanın İlk Bilgisayarı. http://www. bilgiustam.com/dunyanin-ilk-bilgisayari-ve-bilgisayarin-tarihcesi/. Accessed 06.03.2018. BT. (2012). Bilim-Teknoloji, Bilim ve Teknoloji Tarihi (Kronolojik Olarak Buluşlar). http://www. bilim-teknoloji.com/bilim-ve-teknoloji-tarihi-bilim-ve-teknolojinin-tarihsel-gelisimi/. Accessed 17.04.2018.

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Buchanan, R. A. (2018). History of technology. https://www.britannica.com/technology/historyof-technology/The-Industrial-Revolution-1750-1900. Accessed 17.04.2018. Bulut, C. (2017). Bulut Bilişim (Cloud Computing) Nedir? Türkiye’nin Endüstri Platformu. Clark, C. (2018). Cybersecurity. http://whatis.techtarget.com/definition/cybersecurity. Accessed 15.02.2018. Dirim, A. (2016). Eklemeli Üretim (Additive Manufacturing) Nasıl Bir Devrimdir? Tasarımdan İmalata Eğitim Mühendislik Hizmetleri. http://www.tasarimdanimalata.com/eklemeli-uretimadditive-manufacturing-nasil-bir-devrimdir/. Accessed 02.02.2018. Gelderman, C. W. (2018). Henry Ford American industrialist. https://www.britannica.com/ biography/Henry-Ford, Accessed 25.05.2018. Giraud, P. (2016). Why cloud technology is central to Industry 4.0, information age. http://www. information-age.com/cloud-technology-central-industry-4-0-123462532/. Accessed 24.03. 2018. Gökyay, Ç. (2008). Türkiye’de Mikro Kredi Uygulamaları ve İstihdama Yansımaları (p. 104). Uzmanlık Tezi: Çalişma Ve Sosyal Güvenlik Bakanliği Türkiye İş Kurumu Genel Müdürlüğü. Griffin, E. (2014). Manchester in the 19th century. https://www.bl.uk/romantics-and-victorians/ articles/manchester-in-the-19th-century. Accessed 02.06.2018. Han, E., & Kaya, A. A. (2004). İktisadi Kalkınma ve Büyüme (p. 238). Eskişehir: Anadolu Üniversitesi Yayınlar. https://www.bulusum.biz/HaberDetay/6. Accessed 10.03.2018. http://www.endustri40.com/artirilmis-gerceklik-augmented-reality/. Accessed 05.02.2018. https://www.itgovernance.co.uk/what-is-cybersecurity. Accessed 24.02.2018. http://www.ilkkimbuldu.com/radyonun-icadi/. Accessed 06.03.2018. http://www.realitytechnologies.com/augmented-reality. Accessed 05.02.2018. https://www.robots.com/articles/viewing/what-are-autonomous-robots. Accessed 24.02.2018. https://www.sas.com/en_us/insights/analytics/big-data-analytics.html. Accessed 24.02.2018. https://stanleyinnovation.com/what-autonomous-robots/. Accessed 24.02.2018. https://www.uber.com/tr/. Accessed 05.03.2018. Kaya, K. (2016). Couchsurfing Nedir? https://yoldaolmak.com/couchsurfing-nedir.html. Accessed 10.03.2018. Kelly, M. (2018). The most important inventions of the industrial revolution. https://www. thoughtco.com/industrial-revolution-inventors-chart-4059637. Accessed 22.04.2018. Martinek, L., & Stedman, C. (2017). Big data analytics. https://searchbusinessanalytics.techtarget. com/definition/big-data-analytics. Meadows, D. H., Meadows, D. L., Randers, J., & Behrens, W. W. (1972). Ekonomik Büyümenin Sınırları. Çevirenler: Kemal Tosun, Duygu Sezer, Beyza Oba,eser uzun; Sera Özbaşar, Tomris Somay, Fulya Akar, 1978, İstanbul,İstanbul Üniversitesi Yayını, Arpaz Publisher, pp. 15–18. MFA. (2002). Dünya Sürdürülebilir Kalkınma Zirvesi (Johannesburg, August 26–September 4, 2002). http://www.mfa.gov.tr/dunya-surdurulebilir-kalkinma-zirvesi_johannesburg_-26-agustos4-eylul-2002_.tr.mfa. Accessed 22.04.2018. Morris, I. (2010). Dünyaya Neden Batı Hükmediyor? https://tr.scribd.com/document/367823892/’Morris-Dunyaya-Neden-Batı-Hukmediyor-Şimdilik#Search_search-menu_797612. Özdemir, Ş. (2014). Sanayi Devriminin Bilim Tarihi Üzerindeki Etkisi: Bilim Ve Teknoloji İç İçe pp. 52–68. Özdoğan, O. (2017). Endüstri 4.0, Dördüncü Sanayi Devrimi ve Endüstriyel Dönüşümün Anahtarları. İstanbul: Deniz Ofset Publiser. Özilgen, M. (2009). Endüstrileşme Sürecinde Bilgi Birikiminin Öyküsü (pp. 161–162). Ankara, Arkadaş Publiser. Rıfkın, J. (2011). The third industrial revolution (P. Sıral ve Murat Başekim Trans.) 2014. İstanbul: İletişim Publisher. Rıfkın, J. (2012). The third industrial revolution: How the internet, green electricity, and 3-d printing are ushering in a sustainable era of distributed capitalism. World Financial Review, 1, 4052–4057.

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Robin, L. (2012). Inventions of the industrial revolution (edited by N. Gunnell). https://www. brighthubeducation.com/history-homework-help/91805-important-inventions-of-the-industrialrevolution/. Accessed 22.04.2018. Rüßmann, M., Lorenz, M., Gerbert, P., Waldner, M., Justus, J., Engel, P. & Harnisch, M. (2015). Industry 4.0: The future of productivity and growth in manufacturing industries (p. 2). Boston Consulting Group. Saklı, A. R. (2007). Kapitalist Gelişim Sürecinde Fordizm ve Post-Fordizm (pp. 1–18). Ankara. http://ses.org.tr/wp-content/uploads/fordizmpostfordizm.pdf. Accessed 15.01.2018. Schwab, K. (2016). The fourth industrial revolution (Z. Dicleli, Trans., 2017). İstanbul: Optimist Publisher. Selek, A. (2017). Endüstri Tarihine Kısa Bir Yolculuk. http://www.endustri40.com/endustritarihine-kisa-bir-yolculuk/. Accessed 19.03.2018. TOBB. (2016). Ekonomik Forum, Akıllı Fabrikalar Geliyor (p. 18). http://haber.tobb.org.tr/ ekonomikforum/2016/259/016_027.pdf. United Nations. (2018). https://www.un.org/sustainabledevelopment/student-resources/, April24th, 2018. UNDP. (2018). UNDP in Turkey sustainable development goals. http://www.tr.undp.org/content/ turkey/tr/home/sustainable-development-goals.html. Accessed 13.01.2018. Woodford, C. (2018). Technology timeline. http://www.explainthatstuff.com/timeline.html. Accessed 22.04.2018.

Meltem Okur Dinçsoy is acting as asst.prof. at Trakya University, Faculty of Economics and Administrative Sciences. She completed his undergraduate degree at Karadeniz Technical University, Faculty of Economics and Administrative Sciences, Department of Economics. She completed her master and doctoral degree in Okayama University, Japan, Graduate School of Humanities and Social Sciences, Comparative Economics. In field of Economic Development and International Economics, she has focused on some research subjects which are ‘development’, ‘finance’, ‘climate change’, ‘economic crises’, ‘women’s studies’. In this context, there are scientific articles published in various domestic and international scientific journals, books and book chapters, conferences and seminars. She gives undergraduate and postgraduate courses within the scope of her research subjects and proficiency. She is also an advisor of the student communities of Trakya Banking Research Society and she has organized various academic/social trips and meetings for students. She has also experiences as a coordinator in the “Erasmus Exchange Program” and as an instructor in entrepreneurship projects.

Chapter 6

Sustainability Officer in Indonesia’s Palm Oil Companies Elvia Ivada and Hasan Fauzi

Abstract The purposes of this study are to investigate the role of Sustainability Officer (SO) and to evaluate the effectiveness of SO function in Indonesian palm oil corporations. Using 15 palm oil companies listed in Indonesia Stock Exchange as a sample, this study is conducted using electronic mail survey using Google Forms and then followed by content analysis of companies’ annual reports and sustainability reports. Based on Miller and Serafeim (2014) sustainability categorization, we develop our own framework on sustainability classification to determine the sustainability stage. Since we employ different method, we only used three of their five categories to build our sustainability classification, namely SO’s authority, organizational characteristic-related sustainability and SO’s roles. Using the score we get from previous step, we determine in which sustainability stage Indonesian Palm Oil Company is. Most of Indonesian Palm Oil companies have hired SO. Five of the companies do not have SO or personnel especially given authority to conduct sustainability-related work. The SO can be found in the middle management level to top management level of company’s hierarchy. The educational background and experience of the SO are varied. To sum up, Indonesian palm oil industries are in the stage of compliance. In other words, the majority of them are still in the early stage of sustainability. Most of them engage with SO to fulfil the legal requirement especially the sustainability certification, ISPO (Indonesia Sustainable Palm Oil) and RSPO (Roundtable on Sustainable Palm Oil). Keywords Sustainability officer


Palm oil companies
Sustainability stage

E. Ivada
H. Fauzi (&) Faculty of Economics and Business, Sebelas Maret University, Surakarta, Indonesia e-mail: [email protected] E. Ivada Faculty of Teacher Training and Education, Sebelas Maret University, Surakarta, Indonesia H. Fauzi Center for Social and Environmental Accounting Research and Development (ICSEARD), Sebelas Maret University, Surakarta, Indonesia © Springer Nature Singapore Pte Ltd. 2020 K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability, Volume I, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_6

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Introduction

Recently, the trend to appoint Sustainability Officers (SO) in many Indonesian companies has tended to increase. SO, considered as a part of sustainabilityoriented corporate governance mechanisms (Peters and Romi 2014b) and a form of sustainability governance structure (Eapen 2017), is a person or a team who is given authority by the board to manage of the sustainability practice throughout the company (Miller and Serafeim 2014; Eapen 2017, Teoh 2013). Their roles, which are to conduct sustainability-oriented strategy, are crucial for organization. The duties of SO are varied depending on their level in the corporate hierarchy and firm’s sustainability stages (Miller and Serafeim 2014). In the top level, SO is known as Environmental Committee (Rodrigue et al. 2013), who has roles to educate the board on sustainability issues and to demonstrate corporate sustainability commitment at the highest levels (Eapen 2017). Still in the top management level, there is Chief of Sustainability Officer or CSO (Kanashiro and Rivera 2017; Wiengarten et al. 2017; Miller and Serafeim 2014), who is responsible for overseeing the environmental strategy of the firm and directly report to CEO (Miller and Serafeim 2014). In the middle management level, there are environmental managers who have duties related to sustainability in his specific regions or production lines (Miller and Serafeim 2014). Among those Indonesian corporations establishing SO in their governance structure are palm oil companies. Indonesian palm oil corporations are one of the large majority palm oil industries on this planet. They provide the largest contribution to Indonesian foreign sourced income (Badan Pusat Statistik 2018; www. tribunnews.com). However, they have been considered as one of main actors causing environmental and social damages. Greenhouse gas (GHG) emission, endangering certain animal species pushing to closely extinct, deforestation, indigenous people who are often driven away from their forest land, are examples of consequences by palm oil companies’ exploration. In fact, more than 700 land conflicts are related to the palm oil industry (www.rainforest-rescue.org). Furthermore, On 4 April 2017, European Union Parliament released a resolution against palm oil Industry concerning the rainforest deforestation (European Parliament resolution of 4 April 2017, on palm oil and deforestation of rainforests (2016/2222(INI)). The first Indonesian palm oil companies appointing SO in their governance structure were Astra Agro (AALI) and London Sumatra (LSIP) in 2009, followed by other palm oil corporations. Although, most of the companies have been applying SO since 2009, however, until 2017, social conflicts, deforestation and other environmental damages are still serious problems contributed by the Indonesian Palm Oil companies (mongabay.co.id; theguardian.com; kanalaceh.com). Even with the seriousness of the problems, one of the palm oil companies, associated with the allegations of the destruction of rainforest, changed its name with the hope that people forget its failure and fault in order for it to run its business (theguardian.com).

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To solve the social and environmental problems faced by palm oil companies, Indonesian Ministry of Agriculture’s Directorate General of Plantations (DHP) issued a regulation requiring palm oil Corporation to adopt sustainability practice named Indonesia Sustainable Palm Oil (ISPO). The DHP then established ISPO commission to encourage and facilitate Indonesian palm oil industry to build sustainable palm oil plantations through the ISPO certification. Under the agriculture minister’s decree No. 19/2011, by the end of 2014, all Indonesian palm oil companies have to obtain the certification. Then, the target for ISPO certification has been extended to 2017 through Agricultural minister decree No. 11/2015. At the end of 2017 as required by the ministerial decree, there has been 1037 registered auditors ensuring that Indonesian Palm Oil companies to conduct ISPO certification (sawitindonesia.com). However, the ISPO certification implementation as required in the ministerial decree does not indicate the establishments of SO. The importance of SO establishment is that it can impact on the firm’s sustainability performance (Peters and Romi 2014a, b; Homroy and Slechten 2019). Homroy and Slechten (2019) document a positive association between the presences of specific environmental experience board member and environmental performance, in the case of lower GHG emission. In addition, using disclosure of GHG emission, Peters and Romi (2014a, b) show that the presence of environmental committee in the Board and the CSO has positive relation. However, Rodrigue et al. (2013) concludes that there is no connection between environmental committees in the Board and environmental performance. Consistent with prior study, Kanashiro and Rivera (2017) find that the presence of a CSO has negative association with environmental performance. The mix results of previous studies can be explained by the work of Miller and Serafeim (2014). They declared there are three stages of sustainability in a company, namely compliance, efficiency and innovation. The stage reflects company’s sustainability commitment. The higher the stage, the more sustainability performance it can be achieved. The SO is gradually involved in every stage. The highest stage performs the most comprehensive involvement of SO and reveals the highest authority of SO. Therefore, the role of SO is very crucial in company’s sustainability performance. It can be implied that when SO does not effectively act his or her role, the company performs poor sustainability performance. However, while palm oil companies administer SO in firm’s organizational structure, environmental and social damages are still happening. Greenpeace reports Indonesian rainforest destructions for palm oil industries have no sign of slowing down. In those cases, major brands of palm oil products have been linked by the NGOs to palm oil companies which destroy the rainforest and exploit people (https://www.grenpeace.org). Furthermore, NGO specializing in palm oil, Sawitwatch, reported that violations of human rights are still perpetrated by palm oil industries (sawitwatch.or.id). In this regard, Nesbitt (2015) reported that a company with high SO achievement is still facing criticism. The facts lead us to a question, whether SO in Indonesian palm oil companies really had performed their roles? With the growing number of Indonesian palm oil companies hiring SO, supposedly the environmental and social problems are

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decline. In fact, there is no sign that the problems would lessen. Hence, the purpose of this study is to investigate the role of SO in Indonesian palm oil corporations. Also, it intends to evaluate the effectiveness of SO function in the companies. The next part of this article is divided into four sections. Section 6.2 describes literature review and theoretical foundation. Section 6.3 explains method used in this study. Finally, Sects. 6.4 and 6.5 provide discussion and conclusion, respectively.

6.2 6.2.1

Literature Review Sustainability Governance Structure

Following the description of Eapen (2017), sustainability officer can also become part of sustainability governance structure which supports an organization to implement sustainability strategy across the business, manage the achievement of company’s objective and conduct reporting processes, intensify relations with external stakeholders and ensure overall accountability. Sustainability governance structure also has many various names. Chief of Sustainability Officer or CSO (Miller and Serafeim 2014; Peters and Romi 2014b; Kanashiro and Rivera 2017) and Environmental committee (Peters and Romi 2014b) are terminologies generally used by researchers to mention such governance structure. While Peters and Romi (2014b) specifically study sustainability-oriented corporate governance mechanisms (SCGM) focus on the presence of environmental committees on the Board of Directors and a Chief Sustainability Officer (CSO) among the top management team, sustainability governance structure in Indonesian palm oil companies has more variation. Sustainability governance structure is not only found in the Board and in company’s C level which are part of top management team, but also in the middle management level with different titles. Beyond the boards and C-suite level which lay on the top of organization’s hierarchy, SO is also found in the middle management level. The implementation of SO in a company depends on its need and resources. There is no single model that can be applied to all companies in establishing sustainability in corporates’ structure, so that every company has to customize its best method and procedure which best fit with its business model structure, resources and level of sustainability integration into company’s business operation (Eapen 2017). Klettner et al. (2014) stated there are various terms and levels of sustainability officer established in corporations. They reported there are 22 firms of ASX 50 companies have board committee and 6 firms have senior executive committee dedicated to sustainability, while others have committee commit to manage sustainability concern in the lower level such as manager. Their names are also varied. Twelve of them have sustainability in their title, 11 firms are called with other name reflecting sustainability indicator in it, like health safety and environment committee, and other have

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corporate responsibility in their title. Hence, the sustainability officer can be found both in upper level of company’s hierarchy (CSO and environmental committee in board) and in the lower level (management of sustainability, etc.). The different roles between those two levels are in the extent of responsibility. While the upper level of sustainability officer has fundamental obligation to oversee the environmental strategy throughout the organization, the lower level of sustainability officer is only responsible to manage his or her particular area or production line (Kanashiro and Rivera 2017). Although sustainability officer is placed in the top and middle level of corporate hierarchy, most prior studies conducted concerning the sustainability governance structure role in the organization is the top level SO’s role (Strand 2013; Miller and Serafeim 2014; Dixon-Fowler 2017; Peters and Romi 2014a). Organization’s purpose of hiring SO as one of sustainability strategy is varied. The most common underlying consideration is perhaps from the Deloitte Review (Peters and Romi 2014b). It provides number of reasons why company should engage in sustainability concerns. It also emphasizes the importance of the board to oversee sustainability concerns throughout the organization (Wagner et al. 2009) which can be implied as the corporate governance’s role in relation to environmental matter (Peters and Romi 2014b). Therefore, the main responsibility of top level SO employed by organization is to encourage the formulation and accomplishment of sustainability strategy of an organization (Miller and Serafeim 2014). Furthermore, a corporate governance mechanism is essential to align the interest of stakeholders and manager. Such mechanisms can be split into external and internal categories. Board of directors (BoDs) and its composition is one of structures in internal mechanisms (Crifo et al. 2018). Indonesian specific regulation for palm oil producers, namely Indonesian Government Policy for Sustainable Palm Oil Development, forces the industry to obtain the ISPO certification. ISPO is one of Indonesian government efforts to gain and ensure sustainability of Indonesian palm oil industry through a sustainable standardization which is expected to respond allegations concerning environmental and social problem. Furthermore, it also shows government commitment towards sustainable palm oil development. The ISPO’s essential focus is to ensure legal compliance according to the Indonesian laws and regulations which serve as the baseline of sustainability standards Harsono et al. (2012). The sustainability expertise personnel might need to conduct the certification process. That is why perhaps, so many consulting firms offering training for Palm Oil Company staff to prepare and conduct the certification process both for ISPO and RSPO. Since without the ISPO and RSPO the company cannot sell its CPO, it has to make sure that all its operations are sustainable under the certification criteria. And further action taken by the company is to establish SO in their corporate governance structure. However, Rodrigue et al. (2013) indicate that SO does not perform its role effectively to drive organization’s environmental activities. Contrarily, the SO as part of governance mechanisms seems to be more like a monitor for management to ensure that the organization achieves environmental legitimacy (Peters and Romi

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2014a). Social expectations coming from various stakeholders’ concerns that organizations have to take a significant part to protect the environment are now become prevalent (Rodrigue et al. 2013). To respond to the concerns, organizations need to show their commitment to environmental protection. Thus, SO should be able to protect their legitimacy and licence to operate (Deegan 2002).

6.2.2

Sustainability Stages of Commitment

Previous studies concerning the stages of sustainability have different criteria to justify the role of SO in every phase in an organization (Goleman 2010; Miller and Serafeim 2014). In each sustainability stage, SO performs its role differently. The higher the stage, the more extensive the role of SO can play. Both Goleman (2010) and Miller and Serafeim (2014) propose three stages of sustainability. Goleman (2010) stated that each phase requires different organizational capabilities and leadership skills. Goleman (2010) notes that three stages to implement sustainability initiatives: (1) making the case for change, (2) translating vision into action and (3) expanding Boundaries. In the earliest phase, the role of SO is to make a clear and convincing case for change by collaborating and influencing others to get support from key stakeholders. The initial authority for sustainability leaders may simply state the need to act. In the second stage, the responsibility of SO is to translate the sustainability commitment into program with clear definition of initiatives and targets. At the end of this stage, the organization evaluates the achievement by comparing the sustainability targets planned and actual performance. At this time, SO has to build comprehensive programs that can be tracked using clear measurement system. The corrective action needed will be easy to develop the SO if the sustainability performance is out of the target planned. Furthermore, SO also has to select the best efforts to provide the best value for organization through day-to-day operation. Lastly, SO needs to understand how to convert sustainability initiatives and performance becomes advantage for organization, especially in the marketplace. In phase 3, expanding boundaries, SO evaluates long-term sustainability trends, seek new opportunities and develop strategies to reposition organizations to gain benefit from them. The goal is to instill sustainability in the organization‘s core business strategy such as quality or financial control. Typically, SO needs to engage with external stakeholders such as competitors, NGOs and other organizations, and encourage new practices that may differ from the way organizations conducted in managing their business in the past. Miller and Serafeim (2014) divide company’s sustainability initiatives into three stages: (1) compliance, (2) efficiency and (3) innovation. They interviewed companies’ CSOs to determine in which stage their companies are. From the respondents’ answers, it can be concluded that in each stage of sustainability commitment, the role of sustainability governance structure has certain particular characteristics.

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Compliance phase is the earliest stage of sustainability. In this phase, a person that is responsible for sustainability initiatives does not have the specific sustainability-related names. The sustainability efforts taken by such person often are voluntarily in nature and have no relation to his formal tasks. In the second stage, the particular staff to conduct sustainability strategy holds the specific related sustainability name. Furthermore, the role of SO is larger than in previous phase. And in the third phase, the SO usually is at the top of corporate hierarchy and holds fully comprehensive task concerning sustainability.

6.2.3

Miller and Serafeim Sustainability Stages

Miller and Serafeim (2014) develop a sustainability stage based on several categories: CSO authority, organizational characteristic-related sustainability, CSO responsibilities or roles, impact on CEO involvement in sustainability from CSO appointment, and who decides where to locate primary responsibility and which factors affect the decision. The following paragraph will provide explanation on Miller and Serafeim (2014) sustainability stage regarding the first three categories. Compliance Stage The early stage of a company engaging with sustainability is called compliance stage. Usually, this stage applies for companies participating in sustainability for the first time. In this stage, the people responsible for sustainability efforts do not hold the CSO title and do not directly report to CEO or the board of directors. In other words, some of those companies do not have SO in their organization structure in this stage. When they employ SO, usually he or she is in the middle management level. In some cases, the activities taken by the companies concerning sustainability efforts are voluntary in nature and outside of SO’s formal job responsibilities. While in other situations, these tasks are part of his formal task that covers other related activities. Furthermore, all sustainability-related efforts taken voluntarily are not coordinated, and no one in the organization has knowledge on sustainability. During this phase, there is also initiatives coming from employee such as recycling or green projects thought mostly there is no central coordination as strategic actions. Efficiency Stage During this stage, companies employ CSO who directly report to CEO and the board of directors. The roles or responsibilities of the CSO in this stage are similar to the earlier stage or compliance stage with one addition, which is educating sustainability to employees. Their roles are developing strategy, reporting sustainability-related data, embedding sustainability into the organization, determining the material sustainability issues, learning about sustainability from other companies and getting involved in educating employees concerning sustainability.

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Although the roles of CSO in this stage are very similar to the prior stage, there is a fundamental difference. In the Compliance stage, the CSO tasks are focused on how to comply with regulation related to sustainability, while in the Efficiency stage the CSO roles are expanded. In this phase, CSO is responsible to handle stakeholders’ concerns, maintain or elevate reputation of organization and impact on the bottom line of the organization trough sustainability-oriented actions such as waste reduction and resources used efficiencies. Innovation Stage In this stage most companies have sustainability committee in their board structure. This can be inferred that sustainability has achieved higher level of strategic focus, and the board has put sustainability into their interest. However, unlike the earlier two stages, the role of SO in this stage is not well reflected from the SO role classification. As the SO has reached a new level of sustainability, its ordinary role is declined significantly. For example, only 75% of SO in this stage has responsibility in reporting sustainability data. The explanation is perhaps in this stage that companies had developed integrated reporting which is the responsibility of CFO rather than CSO. Also for other roles such as embedding sustainability to the organization, attending to stakeholder relations, and educating employees, learning from external sources, and managing stakeholder relations are lessening significantly. As the SO is now in the highest level of organization hierarchy, he or she delegates authority and decision rights to the lower level such as functional department and local unit business, and this is probably the cause of the declining role of SO in sustainability process in the organization. Thus, the main role of SO in this stage is to assist the development of the sustainability strategy as it evolves into the third stage and to develop the changes in strategy to support it. It is in the second and third stages (Efficiency and Innovation) that companies begin to create the CSO position with more elevated authority. Nevertheless, many of those who were later assigned to the CSO position are already taking a strong leadership role in pushing the company from Compliance to Efficiency. Thus, many of the individuals who now hold the CSO title are actively involved in every stage. However, the CSO’s roles, responsibilities, and titles could vary across the stages.

6.3

Methodology

This study was conducted using electronic mail survey using Google Forms and then followed by content analysis of companies’ annual reports and sustainability reports. Firstly, we searched palm oil company list from Indonesian stock exchange website (www.idx.co.id) under agriculture sector classification and plantation subsector section. There are 19 companies listed in agriculture sector based on JASICA, Jakarta Stock Industrial Classification. One of them, Bisi International

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Tbk (BISI), does not have palm oil production activity. Although Dharma Samudera Fishing Industry Tbk (DSFI) and Magna Investama Mandiri (MGNA) are in the agriculture sector, those companies do not have plantation criteria. Then the three companies were excluded from the study. Finally, only 15 of them are in plantation subsector with one of their business line is palm oil industry. We sent questionnaire to the 15 palm oil companies. Unfortunately, only two of them gave feedback by answering our questionnaire. They are AALI and SMAR. Company’s annual reports from IDX website were then downloaded to support the first group data. Some of the companies do not have complete annual report in IDX website. There are some missing years. Therefore, we go to the corporate website and get the annual report and sustainability report as well. Unfortunately, not all 15 companies provide comprehensive information regarding annual report and sustainability report. The most recently annual reports are from the year 2017. However, the starting year to publish annual report in the website is varied. Moreover, only some of them provide SR (sustainability Report). The data can be seen in Table 6.1. Secondly, we conducted the content analysis from company’s annual report and SR. Assisted by searching tools provided by pdf, we type organization structure or management structure in company’s annual report. From the organization structure, we seek position under sustainability names or other related names such as environmental, CSR, sustainability, environment, social and social responsibility. At this point, we can obtain data concerning the first category, SO authority. After we get the SO in the organization structure, we type the SO title in searching box to search SO role in the company. If we cannot have the information about SO presence and role in the company from AR, with the same way we search Table 6.1 Annual report and sustainability report available in the IDX and company’s website Company’s Name

CODE

AR year

SR year

Astra Agro Lestari Tbk Austindo Nusantara Jaya Tbk Eagle High Plantations Tbk Dharma Satya Nusantara Tbk Golden Plantation Tbk Gozco Plantations Tbk Jaya Agri Wattie Tbk London Sumatra Indonesia Tbk Multi Agro Gemilang Plantation Tbk Provident Agro Tbk Sampoerna Agro Tbk Salim Ivomas Pratama Tbk Sinar Mas Agro Resources Tbk Sawit Sumbermas Sarana Tbk Bakrie Sumatera Plantations Tbk

AALI ANJT BWPT DSNG GOLL GZCO JAWA LSIP MAGP PALM SGRO SIMP SMAR SSMS UNSP

2007–2017 2010–2017 2011–2017 2013–2017 2014–2017 2009–2017 2010–2017 2009–2017 2014–2016 2012–2017 2016–2017 2009–2017 2009–2017 2016–2017 2008–2016

2008–2016 2016 NA NA NA NA NA NA NA NA NA 2014–2016 NA NA 2010–2015

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in the SR. Unfortunately, not all AR and SR provide information about SO role. Hence, the next step is to search in company’s website. In this case, Eagle High Plantations or BWPT provide a video conducted by sustainability director, Denys Munang, telling us about his role in the company. However, there are some words we cannot properly catch because the audio quality is not sufficient enough. For two companies send us questionnaire respond, we combine the information we get from such response and their AR and SR as well. Thirdly, from Miller and Serafeim (2014) sustainability categorization (Table 6.2) we developed our own sustainability classification with some modifications (Table 6.3). It becomes our framework to determined the sustainability stage. Since we employed different method, we only used three of their five categories to build our sustainability classification, namely SO’s authority, organizational characteristic-related sustainability and SO’s roles. Furthermore, while Miller and Serafeim (2014), based on CSO responses, determined the degree of sustainability in every stage by using percentage. We did not use the same percentage technique. Otherwise, we marked the stage by using √ symbol to determine whether certain stage has the category. This was because we were not able to decide the degree of every category by using percentage due to the fact that we conducted AR and SR content analysis, instead of interview. In CSO roles category, we marked differently. From Table 6.2, it can be seen that the percentages in Innovation stages are all decreased. Their explanation is that the CSO in this stage is in the company’s highest level of hierarchy. Therefore, he or she distributed sustainability roles to his/her subordinate. Then, when we found that the SO of Indonesian palm oil company is in the company’s highest level, we marked all roles. This was based on Miller and Serafeim’s final statement: ‘many of the individuals who now hold the CSO title is actively involved in every stage’. Next, we valued every mark as 1, again this was because we were not able to decide the degree of every category. Then, we summed all marks and we had the total score of each stage. Compliance stage has score of 6. It means that every company which has score of 6 or below is in the compliance stage. The second stage has 9 total score. It means that all organizations which have total score in a range between 7 and 9 are in the stage of efficiency. And every company that has a score range between 10 and 12 is in the highest stage, innovation (Table 6.3). Lastly, using the score we get from previous step, we determined in which sustainability stage Indonesian Palm Oil Company is. For example, when a particular company has a sustainability score of 7, so we conclude that such company is in the compliance stage. Based on the sustainability stage developed from Miller and Serafeim model, the framework in use for developing the stage of sustainability for Indonesian palm oil companies can be shown in Table 6.3. Although there is no perfectly match word by word as in the sustainability stage classification which we developed in the prior step, we made a decision based on the text described in AR and SR. Hence, to reduce subjectivity we employed triangulation method (Jonsen and Jehn 2009). One researcher wrote sentences or key words she found in the AR and

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Table 6.2 Miller and Serafeim (2014) sustainability stage Categories

Stage of sustainability Compliance Efficiency (%) (%)

Innovation (%)

CSO Authority Person with Primary Responsibility for 14 27 36 Sustainability has the Title of CSO CSO Reports to CEO or Board of Directors 32 41 41 Organization characteristic-related sustainability CEO or Board of Director ultimately Responsible 73 86 59 for Sustainability Board Sustainability Committee 32 27 64 CSO responsibilities Sustainability Strategy Development 91 91 86 Embedding Sustainability Strategy in organization 91 95 86 Reporting Sustainability Data 95 100 75 Managing Stakeholder Relations 82 82 68 Employee Education around Sustainability 82 86 73 Facilities Management 5 45 18 Learning from External Sources 91 91 64 Determining Material Sustainability Issues 86 86 77 Impact on CEO involvement in sustainability from CSO appointment Change in CIO Involvement in Sustainability from 2.72 2.62 2.50 CSO Appointment Who decides where to locate primary responsibility aid which factors affect the decision CEO or Board of Directors Decide where to Locate 77 64 77 Primary Responsibility for Sustainability Breadth of Organizational Commitment to 55 68 55 Sustainability Where Champions of Sustainability are located 18 23 36 Level of Commitment of Organization to 64 68 55 Sustainability Sustainability Strategy of tic Civilization 41 55 64

SR, and based on the sustainability stage classification, gave a tick mark in each category she thought they match each other. She also wrote down the page number where she found such category. Next, second and third researcher (a staff) ensured by giving a mark next to the sign that previous person did after reading sentences and keywords intended. If all researchers agreed on one category, it means that we can accept it as a category for certain company. All the three researchers did the same method and finally, we can get all categories that match with sentences in the AR and SR. See example on Table 6.4.

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Table 6.3 Framework for developing sustainability stage in Indonesian palm oil companies Categories

Stage Compliance

SO’s authority Person with Primary Responsibility for Sustainability has the Title of CSO SO Reports to CEO or Board of Directors Organizational characteristic-related Sustainability CEO or Board of Directors Ultimately Responsible for Sustainability Board Sustainability Committee SO’s roles Sustainability Strategy Development Embedding Sustainability Strategy in the Organization Reporting Sustainability Data Managing Stakeholder Relations Employee Education around Sustainability Facilities Management Learning from External Sources Determining Material Sustainability Issues Total score

√

Efficiency

Innovation

√

√

√

√

√

√ √

√ √ √

√ √ √

√ √ √ √ √ √ √ √ 12

√ √ √ 6

√ √ 9

Table 6.4 Example of triangulation made by researcher Roles

Company X

Sustainability Strategy Development Embedding Sustainability Strategy in the Organization Reporting Sustainability Data Managing Stakeholder Relations

–

Employee Education around Sustainability Facilities Management Learning from External Sources Determining Material Sustainability Issues

R1

R2

R3

… ensuring that the CID programs are suitable for the characteristics and requirements of each plantation area … (SR year N, p. 21) –

√

√

√

The Director Sustainability, under the supervision of the President Director, is fully responsible for compliance, conservation and community involvement … (SR year N, p. 20) –

√

√

√

– – –

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Results and Discussion Indonesian Palm Oil Company’s Sustainability Officer

The SO in palm oil industry has existed since 2009. Among others, they include AALI, LSIP and SGRO. The names, the levels of hierarchy and width of their authority of the SO are varied. UNSP has the highest level of SO. This company places the SO as one of the Boards member named Committee of Environment and Social Relations. There are some companies that improve the level of their SOs. Firstly, they place SO in the middle management level, and then they position the SO in the higher stage. They are ANJT, BWPT, LSIP, SMAR and UNSP. Others, including SIMP and SSMS, add sustainability team under the SO. The educational background and experience of the SO are also varied. Unfortunately, not all data are available in the AR and SR, especially SO who is in the middle management level. Some of them (AALI, LSIP, SGRO, SIMP, SMAR, UNSP) are from inside the companies with no sustainability experience before, or the previous position is no relation with sustainability. Other SOs (ANJT and BWPT) are from outside the company with sustainability experience. The information about SOs with educational background is only provided by one company (SMAR).

6.4.2

Role of Sustainability Officer Classification and Stage of Sustainability

The sustainability score of Indonesian palm oil companies is presented in Table 6.6. Five of the companies do not have SO or personnel especially given authority to conduct sustainability-related work, so that those companies are not included in the table. They are DSNG, GOLL, GZCO, JAWA, and MAGP. In the score of 1–6 range, there are 6 companies. Furthermore, there are only one company which lay in the score of 7–8 range. At last, three companies place in the highest score range of 9–12 (Table 6.5).

6.4.3

The Authority, Organizational Characteristics and Roles of Sustainability Officer in Indonesian Palm Oil Company

The names of SO are varied. Ten (ten) of 15 (fifteen) companies (66.7%) have SO officer in their organizational structure with various names and level. 7 (Seven) or accounted for 46.7% of them, are in the Top Management Level, while the rest are in the middle management. AALI, one of the earliest companies employing SO,

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Table 6.5 Characteristic of SO in Indonesian palm oil company Company

Sustainability Officer Characteristic

Year

Level

AALI

Director in Charge (DIC) of Environment and social responsibility. He leads corporate functions which consist of: (1) community development, (2) government and public relation, (3) safety, health and environment, (4) territorial and security sections (departments) The corporate function is changed to become consist of: (1) community development, (2) safety, health and environment, (3) public relation There is an additional corporate function under DIC, namely plantation sustainability DIC Sustainability and public relations, consist of 5 departments, they are: (1) CSR, (2) safety, health and environment, (3) public relation, (4) conservation management, (5) sustainability system DIC Sustainability and public relations who has a deputy of Director in Charge (all DICs have deputy). Leading 5 departments which number (2) become health and environment, and number (5) become sustainability system/safety The DIC Sustainability and public relations become DIC Sustainability and Communication (SCOM) who has no deputy. Leading 5 departments namely: (1) Corporate Social Responsibility, (2) Foundation, (3) Communication, (4) Sustainability, and (5) Safety and ISPO There are two SOs who has the name regarding sustainability. They are: Head Group of company CSR under External Affairs Director and Head Group of Business sustainability under Risk Management and Compliance Director, and Chief of Internal Audit. They are in the middle management level and not directly to CEO Head Group of Business sustainability becomes Head Group of Business and Environment Sustainability Team The Head Group of Business and Environment Sustainability has shifted the level become Business Sustainability Director There is additional information in company’s SR year 2016, that Sustainability Director leads Department of Community Involvement Department which previously had the title of CSR Department. This CID leads General manager for areas under his authority which are Sumatera and West Kalimantan, Area, West Papua Area

2009

Top Management

ANJT

2010

2012 2013

2015

2017

2013

Middle management

2014

2015

Top management

2016

(continued)

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Table 6.5 (continued) Company

Sustainability Officer Characteristic

Year

Level

BWPT

Deputy CEO of Commercial Sustainability Lead who has Head of sustainability and Head of CSR under him Director Sustainability and Investor Relation is under the CEO. He leads Head of sustainability and Head of CSR NA NA NA NA Environment and CSR Coordination under NKRO Operation Directorate General Services, Environment and CSR is under CEO NA Social and Environment Responsibility under President Director, which consist of two sections: Community Relations and Environment, Health and Safety There are 2 departments which have SO. (1) Business Development Department which has Environment and Occupational Health and Safety, and (2) Licensing and Social Responsibility Department which has Social Responsibility section There are two SOs: (1) Sustainability Certification, Fire and Safety and HEC under Department of Business Development. (2) Social Responsibility under Department of Licensing and Social Responsibility There is Sustainability Division who is one of a Senior Managements of the company. This senior managements are under the CEO or Directors SO in SIMP is one of the corporate function namely Sustainability who is under directors (CEO). There is additional information in the SR, which is sustainability team consist of a group of people led by group sustainability coordinator directly under the CEO. The coordinator has deputy, namely deputy group sustainability coordinator which supervises all region managers. The region managers have responsibility to lead managers in their regional areas. Each area manager has sustainability officer under his authority. Then in SIMP sustainability team is

2016

Middle management

2017

Top management

NA NA NA NA 2009

NA NA NA NA Middle management

2011

Top management

NA 2012

NA Top management

2013

Top management and middle management

2017

Top management and Middle management

2017

Top Management

2014

Top management Middle Management

DSNG GOLL GZCO JAWA LSIP

MAGP PALM

SGRO

SIMP

(continued)

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Table 6.5 (continued) Company

SMAR

SSMS

UNSP

Sustainability Officer Characteristic consist of top management level to lower management level. The same person who lead sustainability in BWPT is also leader of sustainability in SIMP. It is perhaps, because BWPT is SIMP subsidiary In this company there is a department, namely upstream operation. This department has an SO, namely Institute and Sustainability Division Sustainability Division is lift to become top management directly under CEO, which lead 3 sections. They are: (1) sustainability implementation, (2) stakeholder engagement, (3) sustainability communication The third section, sustainability communication is no longer exist There is an SO namely Head of Sustainability under the CEO Beside the Head of sustainability, there is an additional team of sustainability which lead by Corporate Social Responsibility division, under Chief of HRD and General Affairs Under Director of Human resources, there is a division namely corporate social responsibility There is an additional Committee in the Boards namely Environment and Social Relations Committee There is a CSR Division CSR under director of HR The Committee of Environment and Social Relations also has responsibility as Independent Board and Chief of Investment Committee

Year

Level

2010

Middle management

2015

Top management

2017 2016

Top Management Top Management and Middle Management

2012

Middle management

2013

Top management

2016

Middle management

changes the title of SO from time to time. The latest name is Director in Charge (DIC) Sustainability and Communication (SCOM). This DIC leads five departments namely: (1) Corporate Social Responsibility, (2) Foundation, (3) Communication, (4) Sustainability, and (5) Safety and ISPO. AALI is not the only one which changes the name of SO over time. ANJT, BWPT, LSIP, PALM, SMAR, SSMS and UNSP are those which have the changeable title of SO. Furthermore, there is a trend to lift the level of SO from middle management to top management level. Among them are ANJT, BWPT, LSIP, SMAR and UNSP. Since AALI’s AR and SR do not tell about SO roles explicitly, responses of questionnaire from the company can be used to explain the roles. From 8 (eight) roles in the questionnaire, AALI recognizes to have 7 (seven) roles. Furthermore, from AR we can derive that AALI is a sustainability-oriented company. Although it

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Table 6.6 Sustainability score of Indonesian palm oil companies AALI

ANJT

BWPT

LSIP

PALM

SGRO

SIMP

SMAR

SSMS

UNSP

SO has the title related to sustainability

√

√

√

√

√

√

√

√

√

√

SO Reports to CEO or Board of Directors

√

√

√

√

√

√

√

√

SO’s authority

√

Organizational characteristic-related sustainability CEO or Board of Directors Ultimately Responsible for Sustainability

√

–

–

–

–

–

–

–

√

√

Board Sustainability Committee

–

–

–

–

–

–

–

–

Sustainability Strategy Development

√

√

√

√

√

√

√

√

√

√

Embedding Sustainability Strategy in the Organization

√

√

√

√

√

√

√

√

√

Reporting Sustainability Data

√

√

√

Managing Stakeholder Relations

√

√

Employee Education around Sustainability

√

SO’s roles

√

√

√

√

√

√

√

Facilities Management

√

√

√

Learning from External Sources

√

√

√

√

√

√

√

Determining Material Sustainability Issues Total score

√

10

7

3

6

4

5

4

10

4

12

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has sustainability policies and practices and wins many sustainability awards, getting the sustainability certification such as ISPO and RSPO is still one of its sustainability focuses. There is one company, SMAR, in which the SO has eight roles. In its AR and SR, we cannot find the match words for 8 roles. However, since SMAR is one of the two companies giving a response of questionnaire sent, we can easily get the eight duties based on its answer. In fact, it adds one SO responsibility in our open answer. It is to work together with other parties to reveal sustainability issues. This makes the company achieve the highest stage of sustainability.

6.4.4

Indonesian Palm Oil Company’s Sustainability Stage

There are 11 companies which are in the compliance stage of sustainability. Five of them (33.3%) do not have sustainability officer in their organization structure. Although there is no SO in their governance structure, the two of them have sustainability policies, program and practices. However, there is no person appointed for managing sustainability-related activities. Furthermore, the last three seem do not engage with sustainability activities although they have CSR programs (in the form of philanthropic in nature). It means that they are in the early stage of sustainability or compliance stage. Six (40%) of the compliance stage companies already have sustainability officer in their organization structure. Their names and level of hierarchy are varied, as in Table 6.5. Their roles are also varied, but almost all of them are responsible for developing sustainability strategy and integrating sustainability strategy in the organization. Surprisingly, only one company (SSMS) has SO with two roles written in its AR and explanation about its CEO or Board of Directors ultimately responsible for sustainability. It means that the company takes seriously the sustainability issue. This situation is in line with the one noted by Wiengarten et al. (2017) that CEO typically makes company’s strategic decisions and directions (including the sustainability issue). By holding sustainability responsibility, CEO can force the entire organization to conduct sustainability efforts. However, without sufficient description in its Annual Report, conclusion is hard to make on the SO roles. In the efficiency stage, there is only one company (7%) which has SO holding five sustainability roles. The company has a specific title of sustainability officer as in Table 6.5. Since he is a sustainability director, he directly reports to CEO. SO in this company have five duties which are sustainability strategy development, embedding sustainability strategy in the organization, reporting sustainability data, managing stakeholder relations and determining material sustainability issues. Although this company is in the efficiency stage, it already has policies and practices concerning sustainability. Unfortunately, we only can trace five roles possessed by the SO, so that we place this company in the second stage. Three companies (20%) are in the innovation stage. The roles of SO in these companies are consisting of eight responsibilities. The SO is directly reporting to

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Fig. 6.1 Percentage of companies’ in each sustainability stage. Source The result of the data analysed by authors

CEO, and in fact, one of them has sustainability committee in its boards. From searching for words using the searching tools and explanation in their AR and SR on the SO’s role, it is found that SO of the companies has eight duties (Fig. 6.1).

6.5

Conclusion

Indonesian palm oil industries are still in the early stage of sustainability as the majority of them (11 companies accounted to 73%) are in the stage of compliance. Most of them engage with sustainability officer to fulfil the legal requirement towards the sustainability certification, namely ISPO and RSPO. The rest are in efficiency stage (3 companies accounted 20%) and in innovation stage (one company accounted to 7%), with the different roles of SO ranging from developing strategy and integrating sustainability in the organization. The low of the sustainability commitment in Indonesian palm oil companies can answer a question why the environmental and social problem in the industry still exist nowadays, and there is no sign to decrease. Theoretical implication of the finding is that the role of SO will determine stage of sustainability adopted by a company. The more role of SO in a company can be engaged, the higher the level of sustainability adopted in the company. The finding then can implicate to management and policy-maker. For the policy-maker (government), the finding could be a base to issue a regulation requesting Indonesian Palm Oil companies to improve their commitment on sustainability in their operation. This is especially important for Indonesian that has committed to implementing Sustainable Development Goals. For management, this finding could be a pressure tool reminds them on the importance of doing the sustainable business by implementing more roles of SO.

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This study only determines sustainability commitment stage based on the sustainability officer’s authority and role, as well as organizational characteristics in a company without considering other categories. Therefore, we suggest that further study includes other aspects such as the impact of CEO involvement on sustainability and the factors affecting decision to the CSO appointment. For the methodological perspective, it will be important to extend to use interview of the SOs to provide a wider picture of their roles.

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https://www.theguardian.com/environment/2017/jul/21/pepsico-unilever-and-nestle-accused-ofcomplicity-in-illegal-rainforest-destruction. https://www.infosawit.com/news/7781/5-manfaat-sertifikasi-sawit-berkelanjutan-versi-indonesia. Jonsen, K., & Jehn, K. A. (2009). Using triangulation to validate themes in qualitative studies. Qualitative Research in Organizations and Management: An International Journal, 4(2), 123– 150. Kanashiro, P., & Rivera, J. (2017). Do chief sustainability officers make companies greener? The moderating role of regulatory pressures. Journal of Business Ethics, 1–15. Klettner, A., Clarke, T., & Boersma, M. (2014). The governance of corporate sustainability: Empirical insights into the development, leadership and implementation of responsible business strategy. Journal of Business Ethics, 122(1), 145–165. Miller, K. P., & Serafeim, G. (2014). Chief sustainability officers: Who are they and what do they do? Available at SSRN: https://ssrn.com/abstract=2411976, https://doi.org/10.2139/srrn. 2411976. Oxford: Oxford University Press. Nesbitt, H. (2015). What will the Chief Sustainability Officer of the future look like? https://www. theguardian.com/sustainable-business/2015/apr/21/chief-sustainability-officer-of-the-future. Downloaded on 10th June, 2018 at 20:33. Peters, G. F., & Romi, A. M. (2014a). Does the voluntary adoption of corporate governance mechanisms improve environmental risk disclosures? Evidence from greenhouse gas emission accounting. Journal of Business Ethics, 125(4), 637–666. Peters, G. F., & Romi, A. M. (2014b). The association between sustainability governance characteristics and the assurance of corporate sustainability reports. Auditing: A Journal of Practice & Theory, 34(1), 163–198. Rodrigue, M., Magnan, M., & Cho, C. (2013). Is environmental governance substantive or symbolic? An empirical investigation. Journal of Business Ethics, 114(1). Strand, R. (2013). The chief officer of corporate social responsibility: A study of its presence in top management teams. Journal of Business Ethics, 112(4), 721–734. Teoh, C. H. (2013). Malaysian corporations as strategic players in Southeast Asia’s palm oil industry. The Palm Oil Controversy in Southeast Asia: A Transnational Perspective, 19–47. Wagner, S., Hespenheide, E., & Pavlovsky, K. (2009). The responsible and sustainable board. Deloitte Review, 4, 59–71. Wiengarten, F., Lo, C. K., & Lam, J. Y. (2017). How does sustainability leadership affect firm performance? The choices associated with appointing a chief officer of corporate social responsibility. Journal of Business Ethics, 140(3), 477–493.

Elvia Ivada is a lecturer in the Accounting Education Study Program, Teacher Training and Education Faculty, Universitas Sebelas Maret of Surakarta, Indonesia. She is now pursuing her doctoral degree at Faculty of Economics and Management, Universiti Putra Malaysia. Before she became a lecturer, after she graduated from Accounting Study Program of Faculty of Economics, Universitas Sebelas Maret in June 1999, she worked in accounting departments in some companies. In 2002, she became a part of Universitas Muhammadiyah Surakarta as a lecturer in Economics and Business Faculty until 2008. Then, she joined Universitas Sebelas Maret ever since. She made some papers contribution in conferences such as Annual International Conference On Islamic Economics in 2014, and The 5th Sebelas Maret International Conference on Business, Economics and Social Sciences, in July 2018. She also wrote several opinion articles in National News Paper, Koran Sindo.

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Dr. Hasan Fauzi is Professor of the Accountancy Study Program, Faculty of Economics and Business, Universitas Seberlas Maret. After his graduation from Accounting Study Program of Faculty of Economics, Uni-versitas Gadjah Mada, in December 1986, he joined at Universitas Sebelas Maret and became a lecturer in Faculty of Economics. In 1992, he pursued his studies at the Cleveland University, USA, and conferred with a Master of Business Administration (MBA) in 1993. Dr. Hasan completed his doctoral thesis on Social and Environmental Accounting (CSR) at the Universiti Utara Malaysia. He is chairman of Governance and CSR Forum under IAI KAPd and actively involved in addressing CSR issues to the public. He is a director Indonesia Center for Social and Environmental Accounting Research and Development (ICSEARD) and his editorships include: Editor-in Chief of Issues in Social and Environmental Accounting (ISEA), Associate Editor of Social Responsibility Journal (SRJ), member of editorial board for International Journal of Accounting and Finance (IJAF), and member of editorial board for International Journal of service Management and Sustainability (IJSMS).

Chapter 7

The Effects of Leadership Styles on Organizational Trust and Disclosure of Unethical Behaviors (Whistleblowing): A Practical Research Feyza Çağla Oran and Agah Sinan Ünsar

Abstract Today, the enterprises can hold sustainable competitive advantage only through proper guidance of human capital movement. While management is merely regarded as a medium, leadership also appears as a form of administration, which leads organizations to success, increases productivity, directs the employees toward positive psychology while they are carrying out their duties, and ensures that there is a harmonious flow (Csikszentmihalyi in Akış - Mutluluk Bilimi. Buzdağ Yayınevi, Ankara, 2017). Within the social context, the leader’s behavioral pattern that he adopts while dealing with his team shapes his style. Trust acts as a bond that connects the leader with his followers and that increases the sphere of influence and success of the leader through organizational success and increasing productivity. Thus, it is regarded as a medium that will increase the leader’s power of influence for success and to guide his followers more easily, and that ensures better control of the followers. The disclosure of unethical behavior in workplace (whistleblowing) will take shape as a reflection of the leadership style and the way the human capital behaves when the organizational codes of conduct and legal ethical rules are violated. For these reasons, these three subjects are included in this study.







Keywords Leadership Organizational trust Whistleblowing Education sector Packing sector Textile sector










F. Çağla Oran (&) Kadir Has University, Istanbul, Turkey e-mail: [email protected] A. S. Ünsar Trakya University, Edirne, Turkey e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability, Volume I, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_7

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104

7.1 7.1.1

Introduction: Leadership Styles and Organizational Trust and Whistleblowing Leadership

Leadership is a social interaction process, where the leader asks for voluntary participation of his inferiors in order to reach organizational goals. (Bhatti et al. 2012, p. 192–193). Leadership may also be described as a concept where the leader has a social influence over his inferiors (Cunningham et al. 2015, p. 28). The leaders play a role in ethical and unethical behaviors of the groups by shaping the organizational climate and culture. They play this role by creating ethical norms within the organization (Dinh ve diğerleri 2014, p. 37–38). Thus, the leadership behavior arises as a combination of personal and social influences. The leadership style is the behavioral pattern of the leader that he adopts when dealing with his inferiors. In their study at the University of Iowa, Lewin et al. (1939) suggested three types of leadership as autocratic, democratic, and delegative leadership (Bhatti et al. 2012, p. 192–193; Robbins et al. 2013, p. 301–302). Autocratic Leadership It can be said that an autocratic leader is a typical X manager. He does not take into account the high-level needs in Maslow’s theory or the motivational factors of Herzberg. This type of leadership can only be effective if there is a rapid process of reorganization. However, this leads the organization to a strict hierarchical organizational structure (Pawar 2014, p. 12). According to the leadership literature, the autocratic leaders have a strong and instructive structures (Rast et al. 2013, p. 636). Democratic Leadership A democratic leader includes his inferiors in the decision-making processes. It displays a Y-style leadership structure (Pawar 2014, p. 14). McGregor suggests that in Y-type leadership, the employees will not hesitate to take responsibilities, and they will have the capacity for self-regulation. Democratic leader analytically interprets both his own and the others’ behaviors (Rosenfeld and Plax 2003, p. 208). Delegative Leadership This type of leadership was first defined by Lewin, Lippitt, and White in 1939 together with autocratic and democratic leadership styles (Pawar 2014, p. 12). Delegative leadership style is described as the most passive type of leadership. It is also defined as the absence/lack of leadership. The most distinct characteristic of this type of leaders is that they abstain from making decisions. The powers and authorities of the inferiors are maximized through a significant freedom of action for the inferiors (Deluga 1990, p. 192).

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Ethical Leadership The concept of virtue as derived from Aristotle has reached to the concept of ethics in leadership. Virtue is defined as a personality trait, and this trait owned by the leaders is regarded as “moral perfection.” The characteristics are modesty, courage, honesty, compassion, humor, passion, wisdom, fairness, benevolence, self-devotion, determination, toleration, enthusiasm, responsibility, love, and trust. In short, it can be said that these traits cover the characteristics of an ethical leader (Lawton and Páez 2015, p. 641). The key factor for ethical leadership is that the leader shows consistency in his own behaviors and attitudes (Lawton and Páez 2015, p. 641–642).

7.1.2

Organizational Trust

The existence of inter-employee/peer cooperation, higher levels of reciprocal dependence, coordination, the promises made, and the reciprocal sensitivity constitute the foundations of trust (Chowdhury 2012, p. 61). According to McKnight et al. (1998), trust is defined as acting ethically, fairly, and predictably. According to Bromiley and Cummings (1995), it is defined as acting fairly in the individual beliefs or the mutual beliefs among the members of a group, making an effort to act in good faith in all (a) implicit or explicit commitments; (b) being honest in negotiations in any case; and (c) acting fairly even though there is good chance and opportunity to do otherwise (Vidotto et al. 2008, p. 564). Organizational Trust Models Mishra defines trust as the state of vulnerability of the believing party as a result of voluntarily believing in the other party (Mishra 1996, p. 5). Shaw defines trust as when we believe that our expectations will be met consistently with our own interests (Mishra 2002, p. 57). According to Blomqvist and Stahle, the development of trust is based on both organizational trust and individual trust (Blomqvist and Ståhle, Building Organizational Trust 1998, p. 12). Mayer et al. (2007) regarded trust as the foundation of the relationships (Schoorman et al. 2007, p. 345). The main points that Zand (1972) based his trust model were the state of trust or distrust of the individual, the state of trust and distrust according to the information obtained, dominance/influence, and control (Zand 1972, p. 230). Zalabak defines organizational trust as a behavioral, cognitive, and emotional experience (Zalabak 2011, p. 18). Luhmann’s Trust Model Luhmann (2000) based his study on the existence of knowledge within the social system. However, he stated that the perception and cognition were replaced with language-based theories within the process (Luhmann 2000, p. 249). While he defined trust as a means of communication where the social boundaries are

F. Çağla Oran and A. S. Ünsar

106

determined, he also stated that this concept is “based on an illusion.” He stated that trust is an imaginary function that provides an environment for communication in societies and organizations (Jalava 2003, p. 185). Luhmann sees trust as a means to fight against uncertainty (Bachmann 2001, p. 341–342). The dimensions of trust are analyzed in three aspects such as the trust in co-workers, trust in manager, and trust in organization (Yılmaz 2015, p. 56; Kanten 2012, p. 131). While trust in co-workers is the first element of organizational trust, it is also known as the “horizontal trust” (Çalışkur 2015, p. 163). It is stated that the factor that strengthens collectivist practice in organizations is the interpersonal trust (Song et al. 2009, p. 148; 151). Trust in managers is also known as the “vertical trust.” It represents the trust in relationships between the employees and the managers/leaders (Çalışkur 2015, p. 163). Trust in organization is also known as the “external trust,” and it represents the trust in relationships between the organization and its employees, clients, and the suppliers, and the overall trust put in the operation and system of the organization by these individuals (Çalışkur 2015, p. 163).

7.1.2.1

Whistleblowing

In general, the concept of whistleblowing is defined as the act of disclosing all illegal or unlawful practices in organizations by former or current employees to individuals or organizations (Kaptein 2011, p. 515). Whistleblower is defined as the person who discloses these practices (Gerçek 2005, p. 31). These practices may cover subjects, such as corruption, receiving and giving gifts, exaction, illicit gain, favoritism, laundering, malicious use of organization’s confidential information, use of intermediary firms, conflicts of interest, fraud, reliability of the products used by the consumers, environmental pollution, theft, waste, misconduct, work conditions that violate occupational health and safety regulations, sexual assault, discrimination, and violation of law (Hoffman and Schwartz 2015, p. 771). Such individuals are often immensely competent and professional, who tend to challenge the silent majority (Figs. 7.1 and 7.2). Types of Whistleblowing The unethical behaviors and actions can be classified according to their ways of disclosure. Internal whistleblowing behavior means the disclosure is made to persons or executives within an organization (Liu et al. 2015, p. 109). External whistleblowing is defined as informing the media, a government agency, non-governmental organization, or a professional association in order to correct or stop the scandalous behaviors within organizations (Kaptein 2011, p. 515). Public whistleblowing can be defined as a behavior of disclosure where the whistleblower discloses without concealing his/her identity (Aktan 2006, p. 4). Confidential whistleblowing occurs when the individual chooses to keep his/her identity confidential (Aktan 2006, p. 4) to protect himself from the potential negative outcomes of the disclosure (Nayır 2012, p. 34). In formal whistleblowing, the person usually

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Fig. 7.1 Archetypal traits exhibited by a whistleblower. Reference Banerjee and Roy (2014, p. 10)

uses the channels of denouncement (official letters, reports, memorandums, in-house meetings, protocols) created for reporting these unethical/illegal behaviors (Nayır 2012, p. 34). Informal whistleblowing is defined as a disclosure made through informal ways, without taking into account the authority (Nayır 2012, p. 34).

7.2

The Methodology of Studying the Influence of Leadership Styles on Organizational Trust and Whistleblowing

The first part of the research was conducted on 292 employees in the company operating in the field of metal packaging in the Marmara Region. The second part of the research is the education sector. Three hundred and fourteen teachers working in

108

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Fig. 7.2 Newly developed advanced whistleblowing antecedent (process) model. Reference Banerjee and Roy (2014, p. 12)

primary and secondary schools reached Istanbul. The third part of the research is the textile sector. Three hundred and sixty-seven employees reached the textile sector in Istanbul. Survey Form and Scales This study has been used theories of leadership in this research since they are adapted and tested for their reliability and validity in Turkey: Tuna, Bircan, and Yeşiltaş’s scale of ten items (2012) on ethical leadership is derived from Brown et al. (and Trevino 2014). Begeç’s (1999) and Ateş’s scale of 30 items on other leadership styles (2005) is derived from Clark and Clark (1997, 2004). This study has employed Adams’ (2004) scales of organizational trust which has been inspired from Luhmann’s framework, and it is adapted by Kanten (2012). This study has employed Parks etc.’ scales of whistleblowing, and it is adapted by Nayır (2012). Eleven questions were added the scale by the researcher (Oran 2018). Research Model The model for the purpose of the research is shown in Fig. 7.3. Investigation of Demographic Characteristics of Participants The demographic characteristics that are considered are: age, gender, education, seniority/tenure track, marital status, hometown (during upbringing of teachers during primary and secondary schooling years between 7 and 19 of age, Table 7.1). Explanatory Factor Analysis For Scales Ten questions that are found to be below 0.50 (i.e., questions 5, 15, 16, 21, 22, 27, 28, 29, 32, 33) are omitted from the analysis (Tables 7.2 and 7.3).

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Fig. 7.3 Conceptual model

Table 7.1 Descriptive statistics of demographic characteristics of participants Gender

Age

Education

Marital status

Position

Group

Frequency

Percent

Female Male Total Less than 19 years 20–29 years 30–39 years 40–49 years 50 years and over Total Primary school Middle school High school Vocational school Bachelor Graduate study Total Married Single Total Manual workers White-collar workers Total

467 506 973 35 433 348 136 21 973 167 206 196 39 345 20 973 543 430 973 588 385 973

48.0 52.0 100.0 3.6 44.5 35.8 14.0 2.2 100.0 17.2 21.2 20.1 4.0 35.5 2.1 100.0 55.8 44.2 100.0 60.4 39.6 100.0 (continued)

F. Çağla Oran and A. S. Ünsar

110 Table 7.1 (continued) Seniority

Hometown

Sector

Group

Frequency

Percent

Less than 1 year 1–5 years 6–10 years 11–15 years 16–20 years 21 years and over Total Village Sub-district Town/district Province Province Total Packaging sector Education sector Textile sector Total

172 609 116 48 16 12 973 206 53 246 183 285 973 292 314 367 973

17.7 62.6 11.9 4.9 1.6 1.2 100.0 21.2 5.4 25.3 18.8 29.3 100.0 30.0 32.3 37.7 100.0

Organizational trust component of the scale explained 36.677% of variance, and managerial trust component of the scale explained 29.627% (Table 7.4). Reliability Analysis Results of the Scales Internal consistency and reliability are high for leadership (0.945), trust (0.951), and whistleblowing (0.893) (Fig. 7.4; Tables 7.5, 7.6, 7.7, 7.8, and 7.9). The first SEM has been found significant at 5% confidence level. In this model, dependent variable is organizational trust and whistleblowing and the independent variable is leadership style. There is a positive causal relation between organizational trust and delegative leadership (0.702 standardized value/coefficient). Delegative leadership has explained with an effect of 49.3% of organizational trust. There are positive causal relationships between managerial trust and ethical leadership (0.299 coefficient) and democratic leadership (0.515 coefficient). Ethical, democratic leadership styles have been explained with an effect of 57.9% of managerial trust. There are negative causal relationships between informal whistleblowing and ethical leadership (−0.985 coefficient) and democratic leadership (−2.774 coefficient). There are positive causal relationships between informal whistleblowing and delegative leadership (3.334 coefficient) and autocratic leadership (0.386 coefficient). Ethical, democratic, delegative, and autocratic leadership styles have been explained with an effect of 60.2% of informal whistleblowing.

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Table 7.2 Explanatory factor analysis of the leadership scale Statement

Component Ethical Democratic

LE35 0.806 LE36 0.786 LE38 0.776 LE39 0.775 LE37 0.775 LE34 0.739 LE31 0.734 LE40 0.693 L30 0.662 L12 L13 L10 L14 L11 L17 L7 L19 L18 L6 L20 L2 L1 L3 L4 L8 L9 L24 L23 L25 L26 KMO and Bartlett tests:

Autocratic

0.783 0.738 0.723 0.705 0.687 0.629 0.617 0.612 0.583 0.581 0.572 0.803 0.788 0.728 0.714 0.589 0.569

Eigenvalue

Variance ratio (%)

6.213

20.709

6.074

20.245

3.639

12.131

Delegative

0.754 2.74 0.718 0.692 0.577 v2 = 18,699.045; df = 435; p = 0.000 < 0.05

9.135

There are positive causal relationships between formal whistleblowing and delegative leadership (0.916 coefficient) and autocratic leadership (0.204 coefficient). There are negative causal relationships between formal whistleblowing and democratic leadership style (−0.534 coefficient). Delegative, autocratic, and democratic leadership styles have been explained with an effect of 32.4% of formal whistleblowing.

F. Çağla Oran and A. S. Ünsar

112

Table 7.3 Explanatory factor analysis of the organizational trust scale Statement

Component Organizational trust

Eigenvalue

Variance ratio (%)

Managerial trust

G10 0.817 5.868 G11 0.795 G16 0.775 G8 0.740 G9 0.709 G7 0.689 G15 0.678 G13 0.672 G12 0.668 G14 0.653 G1 0.807 4.74 G2 0.789 G3 0.782 G4 0.757 G5 0.752 G6 0.713 KMO and Bartlett tests: v2 = 11,951.271; df = 120; p = 0.000 < 0.05

36.677

29.627

There are negative causal relationships between implicit whistleblowing and ethical leadership (−0.9 coefficient) and democratic leadership (−2.538 coefficient). There are positive causal relationships between implicit whistleblowing and delegative leadership (3.06 coefficient) and autocratic leadership (0.294 coefficient). Ethical, delegative, democratic, and autocratic leadership styles have been explained with an effect of 49.8% of implicit whistleblowing. There are negative causal relationships between explicit whistleblowing and ethical leadership (−0.584 coefficient) and democratic leadership (−1.368 coefficient). There are positive causal relationships between explicit whistleblowing and delegative leadership (2.092 coefficient). Ethical, delegative, and democratic leadership styles have been explained with an effect of 26.8% of explicit whistleblowing. There are negative causal relationships between external whistleblowing and ethical leadership (−0.909 coefficient) and democratic leadership (−2.191 coefficient). There are positive causal relationships between external whistleblowing and delegative leadership (3.057 coefficient). Ethical, delegative, and democratic leadership styles have been explained with an effect of 49.1% of external whistleblowing. There are positive causal relationships between internal whistleblowing and delegative leadership (0.515 coefficient). Delegative leadership style has been explained with an effect of 26.6% of internal whistleblowing.

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113

Table 7.4 Explanatory factor analysis of the whistleblowing scale Statement

Component Implicit

W14

0.883

W13

0.853

W16

0.802

W15

0.778

W12

0.691

Explicit

W9

0.830

W10

0.801

W11

0.752

W8

0.736

W7

0.666

Formal

W18

0.832

W20

0.819

W19

0.784

W17

0.667

W21

0.640

External

W5

0.836

W4

0.803

W6

0.794

Internal

W2

0.880

W3

0.848

W1

0.843

Eigenvalue

Variance ratio (%)

3.995

15.981

3.257

13.027

3.23

12.919

2.892

11.57

2.552

10.209

2.493

9.971

Informal

W23

0.816

W22

0.804

W24

0.670

W25

0.613

KMO and Bartlett tests: v2 = 15,924.436; df = 300; p = 0.000 < 0.05

Tests of Sub-dimensions of Leadership Style Scale According to SocioDemographic Characteristics of Employees See Tables 7.10 and 7.11. Tests of Sub-Dimensions of Organizational Trust Scale According to SocioDemographic Characteristics of Employees See Tables 7.12 and 7.13. Tests of Sub-Dimensions of Whistleblowing Scale According to Socio-Demographic Characteristics of Employees See Tables 7.14 and 7.15.

F. Çağla Oran and A. S. Ünsar

114

Fig. 7.4 SEM model (v2/df = 3.324; NFI = 0.846; NNFI = 0.814; IFI = 0.887; CFI = 0.887; RMSA = 0.049; GFI = 0.801; AGFI = 0.785; PNFI = 0.805; and PGFI = 0.741) (AW explicit whistleblowing, DKL democratic leadership, DW external whistleblowing, EL ethical leadership, FW formal whistleblowing, IFW informal whistleblowing, IW internal whistleblowing, OL autocratic leadership, OG organizational trust, SL delegative leadership, YG managerial trust, ZW implicit whistleblowing)

7.3

Concluding Remarks

When the research findings are analyzed, it is observed that the perception of trust in executives and organization, and the ethical, democratic, and delegative leadership perceptions were higher in white-collar employees when compared to the blue-collar employees. It is because they behave as required by the responsibilities undertaken, the increasing number of inferiors, and the obligation to display

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115

Table 7.5 Reliability analysis results of the scales Ölçekler

Component

No. of items

Leadership total

Autocratic Democratic Delegative Ethical Managerial trust Organizational trust Internal External Explicit Implicit Formal Informal

6 11 4 9 6 10 3 3 5 5 5 4

Organizational trust total Whistleblowing

Cronbach’s alpha (a) 30

16 25

0.834 0.925 0.784 0.936 0.913 0.936 0.898 0.885 0.882 0.892 0.848 0.844

0.945

0.951 0.893

exemplary behavior in terms of the managerial and organizational policies as they become closer to the top management. As part of their jobs, creativity, decisionmaking, administration, knowledge, and experience of white-collar employees become prominent, and subsequently, consultation with their inferiors in decisionmaking processes becomes more prominent. The majority of the white-collar employees are teachers working at an educational institution. The fact that the school principals implement predesignated standard procedures drives forward delegative leadership. Since white-collar employees are closer to the top management when compared to blue-collar employees, and they have a say in decisions taken by the top management, and since white-collar employees can more easily and quickly identify themselves with their organizations than blue-collar employees, they trust more to their organization than the blue-collar employees. While internal and formal whistleblowing is more prominent among white-collar employees, external, confidential, and informal whistleblowing is more prominent among blue-collar employees. The fact that low- and mid-level managers are mostly white-collar employees or that they are closer to the top management because of their positions may lead them toward formal and internal disclosure. The facts that blue-collar employees reach many hierarchical levels until they reach the top management, that the unit chief has a low level of moral attentiveness, and that their chances of finding another job are lower than the white-collar employees because of their educational background may lead them toward confidential disclosure. It is observed that the employees with higher levels of education attribute ethical, democratic, and delegative traits to their leaders. It can be concluded that the employees get closer to the top management and their levels of communication increase together with the educational level. The white-collar employees are capable to interpret and analyze the decisions taken by the top management in their own areas of

ÖG

SL

OL

DKL

EL

Correlation coefficient Sig. (two-tailed) N Correlation coefficient Sig. (two-tailed) N Correlation coefficient Sig. (two-tailed) N Correlation coefficient Sig. (two-tailed) N Correlation coefficient Sig. (two-tailed) N 0.000

0.000

973 1.000

973 0.354**

0.000

973 0.543**

0.000

973 0.583**

0.000

973

973 0.274**

0.000

973 0.501**

0.000

973 0.602**

0.000

973

973

0.000

973 0.210**

0.000

973 0.277**

0.000

973 0.354**

0.274**

0.693**

973 1.000

OL

DKL

0.000

973 0.693**

1.000

EL

Table 7.6 Results of factor correlations

973

0.000

973 0.458**

973 1.000

0.000

973 0.277**

0.000

973 0.543**

0.000

0.501**

SL

973

973 1.000

0.000

973 0.458**

0.000

973 0.210**

0.000

973 0.583**

0.000

0.602**

OG

973

0.000

973 0.731**

0.000

973 0.421**

0.000

973 0.194**

0.000

973 0.616**

0.000

0.638**

YG

973

0.010

973 −0.083**

0.318

973 0.032

0.260

973 0.036

0.000

973 −0.125**

973

0.000

973 0.227**

0.000

973 0.263**

0.000

973 0.113**

0.000

973 0.194**

0.000

0.218**

−0.116** 0.000

AW

ZW

973

0.000

973 0.305**

0.000

973 0.291**

0.000

973 0.268**

0.000

973 0.388**

0.000

0.386**

FW

973

0.000

973 0.115**

0.000

973 0.181**

0.763

973 −0.010

0.565

973 0.018

0.423

0.026

DW

973

0.000

973 0.359**

0.000

973 0.272**

0.000

973 0.220**

0.000

973 0.365**

0.000

0.407**

IW

973 (continued)

0.425

973 −0.026

0.018

973 0.076*

0.000

973 0.124**

0.099

973 −0.053

0.058

−0.061

IFW

116 F. Çağla Oran and A. S. Ünsar

DW

FW

AW

ZW

YG

Correlation coefficient Sig. (two-tailed) N Correlation coefficient Sig. (two-tailed) N Correlation coefficient Sig. (two-tailed) N Correlation coefficient Sig. (two-tailed) N Correlation coefficient Sig. (two-tailed) N

Table 7.6 (continued)

DKL

0.616**

0.000

973 −0.125**

0.000

973 0.194**

0.000

973 0.388**

0.000

973 0.018

0.565

973

EL

0.638**

0.000

973 −0.116**

0.000

973 0.218**

0.000

973 0.386**

0.000

973 0.026

0.423

973

973

0.763

973 −0.010

0.000

973 0.268**

0.000

973 0.113**

0.260

973 0.036

0.000

0.194**

OL

973

0.000

973 0.181**

0.000

973 0.291**

0.000

973 0.263**

0.318

973 0.032

0.000

0.421**

SL

973

0.000

973 0.115**

0.000

973 0.305**

0.000

973 0.227**

0.010

973 −0.083**

0.000

0.731**

OG

973

0.326

973 0.031

0.000

973 0.314**

0.000

973 0.159**

0.000

973 −0.195**

1.000

YG

973

0.000

973 0.399**

0.018

973 0.076*

0.095

973 0.054

973 1.000

973

0.000

973 0.461**

0.000

973 0.448**

973 1.000

0.095

973 0.054

0.000

0.159**

−0.195** 0.000

AW

ZW

973

0.000

973 0.193**

973 1.000

0.000

973 0.448**

0.018

973 0.076*

0.000

0.314**

FW

973

973 1.000

0.000

973 0.193**

0.000

973 0.461**

0.000

973 0.399**

0.326

0.031

DW

973

0.000

973 0.219**

0.000

973 0.432**

0.000

973 0.420**

0.000

973 −0.143**

0.000

0.353**

IW

973 (continued)

0.000

973 0.366**

0.000

973 0.166**

0.000

973 0.145**

0.000

973 0.553**

0.009

−0.083**

IFW

7 The Effects of Leadership Styles on Organizational … 117

EL

DKL

OL

SL

OG

YG

ZW

AW

FW

DW

IW

IFW

Correlation 0.407** 0.365** 0.220** 0.272** 0.359** 0.353** −0.143** 0.420** 0.432** 0.219** 1.000 −0.128** coefficient Sig. 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 (two-tailed) N 973 973 973 973 973 973 973 973 973 973 973 973 −0.083** 0.553** 0.145** 0.166** 0.366** −0.128** 1.000 İFW Correlation −0.061 −0.053 0.124** 0.076* −0.026 coefficient Sig. 0.058 0.099 0.000 0.018 0.425 0.009 0.000 0.000 0.000 0.000 0.000 (two-tailed) N 973 973 973 973 973 973 973 973 973 973 973 973 *p < 0.05, **p < 0.01 AW explicit whistleblowing, DKL democratic leadership, DW external whistleblowing, EL ethical leadership, FW formal whistleblowing, IFW informal whistleblowing, IW internal whistleblowing, OL autocratic leadership, OG organizational trust, SL delegative leadership, YG managerial trust, ZW implicit whistleblowing

İW

Table 7.6 (continued)

118 F. Çağla Oran and A. S. Ünsar

7 The Effects of Leadership Styles on Organizational …

119

Table 7.7 Results of the measurement model Std. regression coefficients OL

DKL

SL

EL

YG

OG

L4 L3 L2 L1 L8 L9 L20 L19 L18 L17 L14 L13 L12 L11 L10 L7 L6 L26 L25 L24 L23 LE40 LE39 LE38 LE37 LE36 LE35 LE34 LE31 L30 G1 G2 G3 G4 G5 G6 G7 G8 G9 G10

0.595 0.744 0.764 0.758 0.58 0.607 0.75 0.761 0.73 0.68 0.748 0.771 0.762 0.644 0.701 0.708 0.701 0.647 0.554 0.466 0.497 0.709 0.803 0.791 0.79 0.829 0.829 0.771 0.791 0.758 0.8 0.746 0.837 0.833 0.803 0.773 0.777 0.792 0.782 0.805

Standard error

t (c.r.)

0.069 0.074 0.073 0.063 0.063

17.357 17.644 17.552 14.597 15.107

0.041 0.041 0.042 0.041 0.041 0.042 0.044 0.044 0.041 0.042

24.519 23.382 21.608 24.036 24.877 24.554 20.353 22.333 22.585 22.342

0.055 0.055 0.058

15.779 13.491 14.328

0.044 0.043 0.045 0.045 0.045 0.046 0.043 0.043

24.263 23.91 23.888 25.046 25.053 23.293 23.905 22.929

0.033 0.032 0.032 0.032 0.034

25.385 29.568 29.385 27,964 26.576

0.037 0.036 0.037

26.848 26.405 27.382

p

R2

0.354 0.554 0.584 0.575 0.336 0.368 0.563 *** 0.579 *** 0.533 *** 0.462 *** 0.560 *** 0.594 *** 0.581 *** 0.415 *** 0.491 *** 0.501 *** 0.491 0.419 *** 0.307 *** 0.217 *** 0.247 0.503 *** 0.645 *** 0.626 *** 0.624 *** 0.687 *** 0.687 *** 0.594 *** 0.626 *** 0.575 0.640 *** 0.557 *** 0.701 *** 0.694 *** 0.645 *** 0.598 0.604 *** 0.627 *** 0.612 *** 0.648 (continued) *** *** *** *** ***

F. Çağla Oran and A. S. Ünsar

120 Table 7.7 (continued)

G11

Std. regression coefficients

Standard error

0.78

0.038

t (c.r.) 26.322

p

R2 0.608

G12 0.648 0.037 21.111 *** 0.420 G13 0.768 0.036 25.813 *** 0.590 G14 0.782 0.035 26.405 *** 0.612 G15 0.781 0.035 26.376 *** 0.610 G16 0.784 0.038 26.508 *** 0.615 IW W1 0.838 0.702 W2 0.913 0.03 34.003 *** 0.834 W3 0.844 0.03 31.434 *** 0.712 DW W4 0.838 0.702 W5 0.91 0.033 33.271 *** 0.828 W6 0.808 0.033 29.321 *** 0.653 AW W7 0.808 0.653 W8 0.872 0.035 30.814 *** 0.760 W9 0.848 0.035 29.795 *** 0.719 W10 0.734 0.035 24.71 *** 0.539 W11 0.588 0.036 18.854 *** 0.346 ZW W12 0.74 0.548 W13 0.866 0.042 27.081 *** 0.750 W14 0.893 0.043 27.89 *** 0.797 W15 0.699 0.042 21.58 *** 0.489 W16 0.763 0.042 23.686 *** 0.582 FW W17 0.565 0.319 W18 0.823 0.078 17.839 *** 0.677 W19 0.805 0.077 17.638 *** 0.648 W20 0.827 0.079 17.879 *** 0.684 W21 0.641 0.073 15.375 *** 0.411 IFW W22 0.608 0.370 W23 0.635 0.064 16.34 *** 0.403 W24 0.89 0.072 20.261 *** 0.792 W25 0.859 0.072 20.02 *** 0.738 *p < 0.05, **p < 0.01, ***bootstrap 2000 samples AW explicit whistleblowing, DKL democratic leadership, DW external whistleblowing, EL ethical leadership, FW formal whistleblowing, IFW informal whistleblowing, IW internal whistleblowing, OL autocratic leadership, OG organizational trust, SL delegative leadership, YG managerial trust, ZW implicit whistleblowing

expertise. This forces the superiors to adopt a democratic leadership style. In this study, the majority of the employees with bachelor’s degrees are teachers. It can be concluded that a self-management insight arises since the teachers track their own tasks and duties. This puts forward delegative leadership style.

7 The Effects of Leadership Styles on Organizational …

121

Table 7.8 Structural model results and bootstrap confidence interval values SEM

Std. regression coefficient

Regression coefficient

(S. E.)

t (C. R.)

p

Bootstrap 95% Upper

Lower

H12

ZW

←

OL

0.294

0.391

0.069

5.712

***

0.133

0.52

H13

FW

←

OL

0.234

0.222

0.044

5.045

***

0.132

0.335

H14

İFW

←

OL

0.386

0.38

0.055

6.85

***

0.219

0.634

H4

YG

←

DKL

0.515

0.56

0.049

11.414

***

0.378

H16

DW

←

DKL

−2.191

−2.827

0.392

−7.207

***

−3.17

−1.515

H17

AW

←

DKL

−1.368

−1.647

0.272

−6.065

***

−2.042

−0.843

H18

ZW

←

DKL

−2.538

−2.916

0.37

−7.885

***

−4.191

−1.28

H19

FW

←

DKL

−0.534

−0.435

0.117

−3.709

***

−1.017

−0.179

H20

İFW

←

DKL

−2.774

−2.349

0.309

−7.594

***

−4.57

−1.436

H5

ÖG

←

SL

0.702

0.899

0.054

16.64

***

0.649

0.754

H21

İW

←

SL

0.515

0.694

0.051

13.539

***

0.441

0.583

H22

DW

←

SL

3.057

4.803

0.583

8.24

***

2.314

3.929

H23

AW

←

SL

2.092

3.068

0.407

7.54

***

1.406

2.687

H24

ZW

←

SL

3.06

4.282

0.534

8.013

***

1.615

4.954

H25

FW

←

SL

0.916

0.91

0.143

6.351

***

0.602

1.365

H26

İFW

←

SL

3.334

3.437

0.447

7.687

***

1.794

5.407

H8

YG

←

EL

0.299

0.344

7.098

***

0.15

H28

DW

←

EL

−0.909

−1.242

0.2

−6.194

***

−1.442

−0.491

H29

AW

←

EL

−0.584

−0.744

0.143

−5.197

***

−0.936

−0.273

H30

ZW

←

EL

−0.9

−1.094

0.182

−6.024

***

−1.989

−0.438

H32

İFW

←

EL

−0.985

−0.882

0.148

−5.967

***

−2.14

−0.509

0.048

0.655

0.443

*p < 0.05, **p < 0.01, ***bootstrap 2000 samples AW explicit whistleblowing, DKL democratic leadership, DW external whistleblowing, EL ethical leadership, FW formal whistleblowing, IFW informal whistleblowing, IW internal whistleblowing, OL autocratic leadership, OG organizational trust, SL delegative leadership, YG managerial trust, ZW implicit whistleblowing

While the employees with higher levels of education tend to internal and formal whistleblowing, confidential and informal whistleblowing becomes prominent among the employees with lower levels of education. As the level of education increases, the chance for the employees to take part in administrative levels will also increase. Thus, when they encounter a potential ethical violation, it may be said that they will probably try working on the intra-organizational decision mechanism regarding their inferiors under their administration, since there will be higher chance that the violence might be committed by one of their personnel. It is also observed that the inferiors will take external actions if they see that the ethical violations that they saw or experienced are coming straight from the top management. It may result from lack of information in lower-level employees regarding in-house channels of disclosure. While ethical, democratic, and delegative leadership styles become prominent in education sector when compared to textile industry, autocratic leadership style becomes prominent in packaging industry. It may be suggested that the fact that the

F. Çağla Oran and A. S. Ünsar

122 Table 7.9 SEM model

R2

Structural equation modeling

ÖG = 0.702SL 0.493 YG = 0.299EL + 0.515DKL 0.579 IFW = −0.985EL + 3.334SL − 2.774DKL + 0.386OL 0.602 FW = 0.916SL − 0.534DKL + 0.234OL 0.324 ZW = −0.9EL + 3.06SL − 2.538DKL + 0.294OL 0.498 AW = −0.584EL + 2.092SL − 1.368DKL 0.268 DW = −0.909EL + 3.057SL − 2.191DKL 0.491 IW = 0.515SL 0.266 AW explicit whistleblowing, DKL democratic leadership, DW external whistleblowing, EL ethical leadership, FW formal whistleblowing, IFW informal whistleblowing, IW internal whistleblowing, OL autocratic leadership, OG organizational trust, SL delegative leadership, YG managerial trust, ZW implicit whistleblowing

Table 7.10 Mann–Whitney U test result for sub-dimensions of leadership styles scale Dependent variable

Independent variable

Democratic leadership

Gender Mean rank Female Male 509.65 466.10

Delegative leadership

Z

Sig.

Explanation

−2.417

0.016

Marital status Mean rank Married Single 504.12 465.38

−2.144

0.032

Ethical leadership

Position Mean rank Manual White-collar workers workers 425.73 580.57

−8.419

0.000

Democratic leadership

Position Mean rank Manual White-collar workers workers 409.69 605.08

−10.613

0.000

Delegative leadership

Position Mean rank Manual White-collar workers workers

−2.970

0.003

There is a significant difference between gender and democratic leadership style. Female employees are perceiving their leaders’ styles as more democratic than male employees There is a significant difference between marital status and delegative leadership style. Married employees are perceiving their leaders’ styles as more delegative than single employees There is a significant difference between position and ethical leadership style. White-collar workers are perceiving their leaders’ styles as more ethical than manual workers There is a significant difference between position and democratic leadership style. White-collar workers are perceiving their leaders’ styles as more democratic than manual workers There is a significant difference between position and delegative leadership style. White-collar workers are perceiving their leaders’ styles as more delegative than manual workers

7 The Effects of Leadership Styles on Organizational …

123

Table 7.11 Mann–Whitney U test results of intergroup differences among leadership style scale Dependent variable

Independent variable

Ethical leadership

Education Mean rank Primary school 193.77 Middle school 184.74 Middle school 202.57 High school 223.06 Middle school 110.45 Vocational school 138.99 Education Mean rank Primary school 165.41 Primary school 178.87 Primary school 90.11 Middle school 182.73 Middle school 188.84 Middle school 109.08

Democratic leadership

Z

Sig.

Bachelor

−6.698

0.000

286.87 High school

−2.968

0.003

219.11 Bachelor

−8.388

0.000

319.85 Bachelor

−5.396

0.000

−2.250

0.024

−3.194

0.001

298.23 Graduate study 144.88 Bachelor

Explanation There is a significant difference between education and ethical leadership style. Primary school, middle school, and high school education level of employees are perceiving their leaders’ styles as less ethical than the others

198.55

High school

−2.782

0.005

196.14 Bachelor

−8.274

0.000

294.08 Graduate study 126.50 High school

−2.843

0.004

−3.323

0.001

221.23 Bachelor

−9.943

0.000

−3.260

0.001

328.04 Graduate study 158.98

There is a significant difference between education and democratic leadership style. Primary school, middle school, and high school education level of employees are perceiving their leaders’ styles as less democratic than the others

(continued)

F. Çağla Oran and A. S. Ünsar

124 Table 7.11 (continued) Dependent variable

Delegative leadership

Ethical leadership

Democratic leadership

Delegative leadership

Independent variable High school 210.55 High school 105.73 Vocational school 128.41 Education Mean rank Primary school 229.19 Vocational school 152.87 Hometown Mean rank Village 209.66 Village 178.4 Village 227.27 Hometown Mean rank Village 206.28 Village 180.39 Village 226.65 Hometown Mean rank Village 121.88 Village 211.25

Bachelor 305.34 Graduate study 135.63 Bachelor

Z

Sig.

−6.790

0.000

−2.039

0.041

−3.814

0.000

Explanation

199.74

Bachelor

−2.918

0.004

269.72 Bachelor

−2.362

0.018

There is a significant difference between education and delegative leadership style. Primary school and vocational school education level of employees are perceiving their leaders’ styles as less delegative than the others

196.98

Sub-district 240.60 Province 213.69 Metropolitan 259.54

Sub-district 243.43 Province 211.45 Metropolitan 259.99

Sub-district 161.58 Town/ district 239.27

−2.512

0.012

−3.095

0.002

−2.491

0.013

−3.014

0.003

−2.721

0.007

−2.571

0.010

−3.457

0.001

−2.282

0.022

There is a significant difference between hometown and ethical leadership style. Employees whose hometown is village are perceiving their leaders’ styles as less ethical than the others

There is a significant difference between hometown and democratic leadership style. Employees whose hometown is village are perceiving their leaders’ styles as less democratic than the others

There is a significant difference between hometown and delegative leadership style. Employees whose hometown is village, town, and metropolitan are perceiving their leaders’ styles as less delegative than the sub-district (continued)

7 The Effects of Leadership Styles on Organizational …

125

Table 7.11 (continued) Dependent variable

Independent variable Sub-district

Ethical leadership

Democratic leadership

Autocratic leadership

Delegative leadership

181.98 Sub-district 144.55 Sub-district 205.94 Sector Mean rank Packaging 253.83 Packaging 355.93 Education 423.41 Sector Mean rank Packaging 241.46 Packaging 358.86 Education 438.42 Sector Mean rank Packaging 339.27 Packaging 375.17 Sector Mean rank Packaging 280.45 Education 367.91

Town/ district 143.11 Province 110.96 Metropolitan 162.72

Education 349.69 Textile 309.37 Textile 270.49

Education 361.20 Textile 307.04 Textile 257.65

Education 270.24 Textile 294.06

Education 324.94 Textile 317.98

Z

Sig.

−2.986

0.003

−3.169

0.002

−2.969

0.003

−6.759

0.000

−3.122

0.002

−10.133

0.000

−8.424

0.000

−3.473

0.001

−11.965

0.000

−4.858

0.000

−5.442

0.000

−3.138

0.002

−3.315

0.001

Explanation

There is a significant difference between sector and ethical leadership style. Employees in the education and packaging industries are perceiving their leaders’ styles as more ethical than the textile

There is a significant difference between sector and democratic leadership style. Employees in the education and packaging industries are perceiving their leaders’ styles as more democratic than the textile

There is a significant difference between sector and autocratic leadership style. Employees in the packaging industry are perceiving their leaders’ styles as more autocratic than the others There is a significant difference between sector and delegative leadership style. Employees in the education sector are perceiving their leaders’ styles as more delegative than the others

surveys were conducted in public institutions in education sector may be delimitative in ethical violations when compared to private sector. Ethical leadership style is found to be least common in textile industry. The results of a research conducted by the Ministry of Labor and Social Security in textile industry, which found

F. Çağla Oran and A. S. Ünsar

126

Table 7.12 Mann–Whitney U test result for sub-dimensions of organizational trust scale Dependent variable

Independent variable

Z

Sig.

Explanation

Managerial trust

Position Mean rank Manual White-collar workers workers 418.78 591.19

−9.392

0.000

Organizational trust

Position Mean rank Manual White-collar workers workers 437.02 563.33

−6.865

0.000

There is a significant difference between position and managerial trust. White-collar workers have higher managerial trust than the others There is a significant difference between position and organizational trust. White-collar workers have higher organizational trust than the others

behaviors against working hours, differences between actual and registered wages, and higher levels of unregistered employment, proves this result. It is observed that democratic leadership style prevails in education sector, where the employees have higher levels of education. It may be concluded that the chance of being taken into consideration in terms of leader–member relations increases as the levels of education increase. With the existence of dangerous conditions in metal packaging industry, it may also be concluded that the perceived risk of occupational safety is higher. Lower levels of education among workers, the importance of even a small mistake and negligence, and no tolerance to mistakes force the superiors to implement strict and supervisory rules. When the sectoral report on work accidents is examined, it is observed that the number of work accidents in metal product manufacturing is ranked first except for machinery and equipment (TMMOB (Union of Chambers of Turkish Engineers and Architects) Chamber of Mechanical Engineers 2018, s. 54–59). The levels of trust to management and organization are higher in education sector than it is in packaging and textile industries. This may be explained by the fact that education is a public sector, and that they take part in management by complying with predesignated decisions instead of their own independent decisions. All teachers in education sector are equal, and this leads to an increase in trust in co-workers, since there are no conflicts of interest, or any other area of competition such as promotion that are common in private sector. In addition, the fact that the schools are under the control of the government, and the work conditions are standardized and protected by the laws in accordance with the predesignated procedures may influence the trust in management and, thus, the trust in their organizations. Internal whistleblowing has become more prominent in education sector than in textile industry. This may be explained through institutionalized structure of the

7 The Effects of Leadership Styles on Organizational …

127

Table 7.13 Mann–Whitney U test results of intergroup differences among organizational trust scale Dependent variable

Independent variable

Managerial trust

Education Mean rank Primary school 90.54 Middle school 189.86 Middle school 205.69 Middle school 110.17 High school 212.79 High school 105.54 Vocational school 144.06 Eğitim Düzeyi Mean rank Primary school 215.72 Middle school 220.37 Middle school 110.81 High school 219.19 Vocational school 134.32

Organizational trust

Graduate study 122.93 High school 213.73 Bachelor 317.98 Graduate study 147.80 Bachelor 304.07 Graduate study 137.50 Bachelor

Z

Sig.

−2.534

0.011

−2.063

0.039

−8.065

0.000

−2.463

0.014

−6.571

0.000

−2.183

0.029

−2.908

0.004

Explanation There is a significant difference between education and managerial trust. Primary school, middle school, high school, and vocational school education level of employees have lower managerial trust than the others

197.98

Bachelor

−4.353

0.000

276.24 Bachelor

−6.351

0.000

309.22 Graduate study 141.23 Bachelor

−1.988

0.047

−5.823

0.000

300.44 Bachelor

−3.465

0.001

There is a significant difference between education and organizational trust. Primary school, middle school, high school, and vocational school education level of employees have lower organizational trust than the others

199.08 (continued)

F. Çağla Oran and A. S. Ünsar

128 Table 7.13 (continued) Dependent variable

Independent variable

Managerial trust

Hometown Mean rank Village Sub-district 122.90 157.61 Village Town/ district 207.33 242.55 Village Province 177.33 214.90 Village Metropolitan 217.60 266.53 Sektör Mean rank Ambalaj Eğitim 241.88 360.80 Eğitim Tekstil 419.46 273.87 Sector

Managerial trust

Organizational trust

Z

Sig.

−3.020

0.003

−2.862

0.004

−3.301

0.001

−3.783

0.000

−8.404

0.000

−9.681

0.000

Explanation There is a significant difference between hometown and managerial trust. Employees whose hometown is village have lower managerial trust than the others

There is a significant difference between sector and managerial trust. Employees in the education sector have higher managerial trust than the others There is a significant difference between sector and organizational trust. Employees in the education sector have higher organizational trust than the others

education sector and the existence of internal disclosure channels. The textile workers usually believe that it will be hard for them to find another job because of their levels of education, they do not want to risk their jobs, they avoid catching the attention of their co-workers and management, and thus, they may prefer to disclose ethical violations confidentially. There are no internal disclosure channels in the companies, textile industry, that are included in this study, and this may have led to external whistleblowing. It is also observed that the people from smaller towns tend to choose external whistleblowing method when compared to people from larger cities. In this case, it can be concluded that there is a migration flow from smaller towns to cities, and these immigrants are mostly employed in textile industry.

7 The Effects of Leadership Styles on Organizational …

129

Table 7.14 Mann–Whitney U test result for sub-dimensions of whistleblowing scale Dependent variable

Independent variable

Z

Sig.

Explanation

Internal whistleblowing

Gender

−2.925

0.003

There is a significant difference between gender and internal whistleblowing. Female employees tend to be more internal whistleblowing than male employees

−2.568

0.010

There is a significant difference between gender and explicit whistleblowing. Female employees tend to be more explicit whistleblowing than male employees

−2.017

0.044

There is a significant difference between gender and implicit whistleblowing. Male employees tend to be more explicit whistleblowing than female employees

−5.430

0.001

There is a significant difference between gender and informal whistleblowing. Male employees tend to be more informal whistleblowing than female employees

−2.946

0.003

There is a significant difference between position and internal whistleblowing. Manual workers tend to be more internal whistleblowing than white-collar workers

−4.160

0.000

There is a significant difference between position and external whistleblowing. Manual workers tend to be more external whistleblowing than white-collar workers

−7.974

0.000

There is a significant difference between position and implicit whistleblowing. Manual workers tend to be more implicit whistleblowing than white-collar workers

−5.605

0.000

There is a significant difference between position and formal whistleblowing. Manual workers tend to be less formal whistleblowing than white-collar workers

−5.430

0.000

There is a significant difference between position and informal whistleblowing. Manual workers tend to be more informal whistleblowing than white-collar workers

Explicit whistleblowing

Implicit whistleblowing

Informal whistleblowing

Internal whistleblowing

External whistleblowing

Implicit whistleblowing

Formal whistleblowing

Informal whistleblowing

Mean rank Female

Male

513.90

462.17

Gender Mean rank Female

Male

511.02

464.83

Gender Mean rank Female

Male

468.16

504.39

Gender Mean rank Female

Male

457.01

514.68

Position Mean rank Manual workers

White-collar workers

465.94

519.16

Position Mean rank Manual workers

White-collar workers

517.15

440.95

Position Mean rank Manual workers

White-collar workers

544.90

398.57

Position Mean rank Manual workers

White-collar workers

446.24

549.25

Position Mean rank Manual workers

White-collar workers

526.27

427.02

F. Çağla Oran and A. S. Ünsar

130

Table 7.15 Mann–Whitney U test results of intergroup differences among whistleblowing scale Dependent variable

Independent variable

External whistleblowing

Age

External whistleblowing

Internal whistleblowing

External whistleblowing

Z

Sig.

Mean rank 20–29 age

30–39 age

405.09

373.46

20–29 age

40–49 age

295.54

251.43

−1.959

0.050

−2.744

0.006

Seniority

Explanation The employees whose 20–29 age and 40–49 age tend to be less external whistleblowing than 30–39 age employees

More senior employees tend to be less external whistleblowing than less senior employees

Mean rank Less than 1 year

1–5 years

360.39

399.64

Less than 1 year

11–15 years

115.48

92.67

1–5 years

11–15 years

336.22

237.45

1–5 years

21 years and over

313.36

191.21

−2.026

0.043

−2.220

0.026

−3.491

0.000

−2.348

0.019

Education Mean rank Middle school

High school

190.36

213.20

Middle school

High school

236.82

299.39

High school

Bachelor

250.20

282.82

−1.992

0.046

−4.556

0.000

−2.386

0.017

Education Mean rank Primary school

Vocational school

108.75

81.04

Primary school

Bachelor

284.54

242.92

Primary school

Graduate study

96.77

70.90

Middle school

Vocational school

128.37

94.63

−2.629

0.009

−3.002

0.003

−2.031

0.042

−2.742

0.006

There is a significant difference between education and internal whistleblowing. Middle school education level of employees tends to be less internal whistleblowing than high school and bachelor education level of employees

There is a significant difference between education and external whistleblowing. Primary school and middle school education level of employees tend to be more external whistleblowing than vocational school, bachelor, and graduate study education level of employees

(continued)

7 The Effects of Leadership Styles on Organizational …

131

Table 7.15 (continued) Dependent variable

Implicit whistleblowing

Formal whistleblowing

Independent variable

Z

Sig.

Middle school

Bachelor

−3.299

0.001

304.79

258.81

Middle school

Graduate study

−2.157

0.031

116.41

83.55

Education Mean rank Primary school

Vocational school

108.81

80.78

Primary school

Bachelor

306.47

232.31

Primary school

Graduate study

97.87

61.68

Middle school

Vocational school

128.85

92.12

Middle school

Bachelor

333.95

241.40

Middle school

Graduate study

117.92

67.95

High school

Vocational school

122.95

93.12

High school

Bachelor

317.79

244.42

High school

Graduate study

112.33

70.95

−2.653

0.008

−5.345

0.000

−2.836

0.005

−2.976

0.003

−6.631

0.000

−3.272

0.001

−2.514

0.012

−5.277

0.000

−2.831

0.005

Education Mean rank Primary school

High school

155.46

204.61

Primary school

Vocational school

98.87

123.33

Primary school

Bachelor

199.64

284.02

−4.458

0.000

−2.312

0.021

−6.068

0.000

Explanation

There is a significant difference between education and implicit whistleblowing. Primary school, middle school, and high school education level of employees tend to be more implicit whistleblowing than vocational school, bachelor, and graduate study education level of employees

There is a significant difference between education and formal whistleblowing. Primary school and middle school education level of employees tend to be less formal whistleblowing than vocational school, bachelor, and graduate study education level of employees

(continued)

F. Çağla Oran and A. S. Ünsar

132 Table 7.15 (continued) Dependent variable

Informal whistleblowing

External whistleblowing

Independent variable

Z

Sig.

Primary school

−2.659

0.008

−4.361

0.000

−2.183

0.029

−6.254

0.000

−2.718

0.007

Graduate study

90.37

124.35

Middle school

High school

176.91

227.34

Middle school

Vocational school

118.71

145.67

Middle school

Bachelor

221.26

308.69

Middle school

Graduate study

109.83

151.35

Education Mean rank Primary school

Bachelor

286.43

242.01

Primary school

Graduate study

97.16

67.65

Middle school

Bachelor

308.43

256.64

Middle school

Graduate study

116.87

78.80

High school

Vocational school

122.24

96.71

High school

Bachelor

313.26

246.99

High school

Graduate study

112.45

69.78

−3.212

0.001

−2.321

0.020

−3.726

0.000

−2.507

0.012

−2.157

0.031

−4.777

0.000

−2.929

0.003

Hometown Mean rank Sub-district

Province

135.55

113.56

Town/ district

Province

232.25

191.81

−2.080

0.038

−3.360

0.001

Explanation

There is a significant difference between education and informal whistleblowing. Primary school, middle school, and high school education level of employees tend to be more informal whistleblowing than vocational school, bachelor, and graduate study education level of employees

There is a significant difference between hometown and external whistleblowing. Employees whose hometown is sub-district and town tend to be more external whistleblowing than province and metropolitan

(continued)

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133

Table 7.15 (continued) Dependent variable

Explicit whistleblowing

Implicit whistleblowing

Formal whistleblowing

Independent variable

Z

Sig.

Town/ district

Metropolitan

−2.522

0.012

283.97

250.49

Hometown Mean rank Village

Sub-district

124.84

150.07

Village

Town/ district

210.26

240.10

Sub-district

Province

136.88

113.18

Sub-district

Metropolitan

200.33

163.77

Town/ district

Province

228.35

197.05

Town/ district

Metropolitan

288.50

246.58

−2.193

0.028

−2.425

0.015

−2.233

0.026

−2.510

0.012

−2.593

0.010

−3.147

0.002

Hometown Mean rank Village

Province

212.72

175.05

Town/ district

Province

239.98

181.42

Town/ district

Metropolitan

285.40

249.26

Province

Metropolitan

215.09

246.96

−3.316

0.001

−4.862

0.000

−2.715

0.007

−2.504

0.012

Hometown Mean rank Town/ district

Metropolitan

287.06

247.82

Village

Town/ district

198.26

250.15

Village

Province

184.42

206.91

−2.947

0.003

−4.217

0.000

−1.973

0.048

Explanation

There is a significant difference between hometown and explicit whistleblowing. Employees whose hometown is sub-district and town tend to be more explicit whistleblowing than village, province, and metropolitan

There is a significant difference between hometown and implicit whistleblowing. Employees whose hometown is village and town tend to be more implicit whistleblowing than metropolitan

There is a significant difference between hometown and formal whistleblowing. Employees whose hometown is town tend to be more formal whistleblowing than village and metropolitan

(continued)

F. Çağla Oran and A. S. Ünsar

134 Table 7.15 (continued) Dependent variable

Independent variable

Informal whistleblowing

Hometown

Internal whistleblowing

External whistleblowing

Implicit whistleblowing

Formal whistleblowing

Informal whistleblowing

Z

Sig.

Mean rank Town/ district

Province

231.72

192.53

Province

Metropolitan

215.29

246.84

−3.268

0.001

−2.483

0.013

Sector Mean rank Packaging

Textile

362.31

304.29

Education

Textile

386.23

302.30

−3.943

0.000

−5.651

0.000

Sector Mean rank Packaging

Education

285.32

320.41

Packaging

Textile

273.91

374.63

Education

Textile

303.44

373.14

−2.486

0.013

−6.787

0.000

−4.632

0.000

Sector Mean rank Packaging

Textile

274.96

373.79

Education

Textile

269.95

401.79

−6.640

0.000

−8.743

0.000

Sector Mean rank Packaging

Education

278.41

326.83

Packaging

Textile

360.79

305.50

Education

Textile

398.69

291.64

−3.412

0.001

−3.712

0.000

−7.097

0.000

Sector Mean rank Packaging

Textile

291.81

360.38

Education

Textile

288.01

386.33

−4.627

0.000

−6.542

0.000

Explanation There is a significant difference between hometown and informal whistleblowing. Employees whose hometown is town and metropolitan tend to be more informal whistleblowing than province

There is a significant difference between sector and internal whistleblowing. Employees in the education and packaging sectors tend to be more internal whistleblowing than the textile sector

There is a significant difference between sector and external whistleblowing. Employees in the textile and education sectors tend to be more external whistleblowing than the packaging sector

There is a significant difference between sector and implicit whistleblowing. Employees in the textile sector tend to be more implicit whistleblowing than the packaging and education sectors

There is a significant difference between sector and formal whistleblowing. Employees in the education and packaging sectors tend to be more formal whistleblowing than the packaging and education sectors

There is a significant difference between sector and informal whistleblowing. Employees in the textile sector tend to be more informal whistleblowing than the packaging and education sectors

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Bilimleri Ana Bilim Dalı Eğitim Yönetimi, Teftiş, Planlaması Ve Ekonomisi Yüksek Lisans Programı, Yüksek Lisans Tezi, Danışman: Prof.Dr.Ruhi Sarpkaya., Aydın, Türkiye. Zalabak, P. S. (2011). A Matter of Trust. Communication World, 17–21. Zalabak, P. S., & Morreale, S. P. (2011). Building high—trust organizations. Leader to Leader, 39–45. Zand, D. (1972). Trust and managerial problem solving. Administrative Science Quarterly, 17(2), 229–239.

Feyza Çağla Oran graduated from Trakya University, Faculty of Economics and Administrative Sciences, Department of Business Administration in 2009. She completed her graduate education in Trakya University, Social Sciences Institute, Department of Business Administration, in 2012. She worked in private sector as a specialist for two years. She completed her doctoral studies in 2018; her dissertation topic was about leadership, organizational trust, and whistleblowing. Since 2015, she is continuing her career as Lecturer in the logistics program at Kadir Has Vocational School. Her research interests focus on management and organizational behavior, leadership, and ethics. Professor Dr. Agah Sinan Ünsar was born in Kırklareli, Turkey, in 1967. He received primary and secondary education in Edirne. He graduated from Edirne High School in 1984. He graduated from the Department of Business Management at Open Education Faculty at Eskişehir Anadolu University with a good degree in 1990. He completed his military service as reserve office in 1992. He received master’s degree from the Department of Business Administration at Institute of Social Sciences of Trakya University and doctorate degree from the Department of Human Resources Management at Institute of Social Sciences of Istanbul University. He worked in Trakya University as Contracted Civil Servant between the years of 1992 and 1994. Between 1994 and 1998, he worked as Civil Servant in Institute of Social Sciences at Trakya University. He worked as Faculty Member in the Department of Business Administration at Faculty of Economics and Administrative Sciences at Trakya University between 1998 and 2004 and as Assistant Professor between 2004 and 2010. He received associate professor degree in the field of “management and organization” in 2010. He was appointed as Professor in 2015. He continues to work as Professor in the same faculty and gives graduate, postgraduate, and doctorate lessons at the Department of Management and Organization. Furthermore, he serves as thesis advisor at postgraduate and doctorate level. His fields of specialization are human resources management and organizational behavior.

Part III

New Approaches in CSR

Chapter 8

Corporate Social Responsibility in Bulgaria: Perspectives and Possibilities Diana Kopeva, Nikolay Sterev and Dimitar Blagoev

Abstract Corporate social responsibility (CSR) is an element of business contribution to the sustainable development. The corporate social responsibility is a new socio-economic phenomenon, especially for Bulgaria, and its applied introduction by Bulgarian business is important and not fully researched topic yet. Corporate social responsibility (CSR) has forcefully and irreversibly become a part of the corporate actions of a growing number of Bulgarian companies in the last decades, but CSR’s effects on regional level is not enough recognized neither by the regional authorities nor by the local societies. The paper aims to examine the role of corporate social responsibility (CSR) as a tool not just for improving the organizational performance but for regional development as well. So, it explores the theoretical framework of the corporate social responsibility, as well as some strategic CSR’s activities to outline the need of it for enforcing some key affects for regional development. For us, these key effects on the development of the regions are: unemployment rate, population growth, raising the level of education, etc. Further, the paper describes the linkages between these key aspects of business’ CSR and regional socio-economics development. Finally, the authors make an overview of some good practices showing the implementation of corporate social responsibilities in selected Bulgarian enterprises and demonstrating the possible improvements in the understanding the matters of corporate responsibility inside the Bulgarian companies. According to the given aim paper includes five parts: Introduction outlines the importance of corporate social responsibility today and its link to regional development. Here it is given the main aim and tasks based on the topic of the paper, research methods and information database. A brief literature preview of different points of view about corporate social responsibility, main characteristics of CSR in Bulgarian firms and classification of results of previous research studies are D. Kopeva (&)
N. Sterev
D. Blagoev University of National and World Economy, Sofia, Bulgaria e-mail: [email protected]; [email protected] N. Sterev e-mail: [email protected] D. Blagoev e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability, Volume I, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_8

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provided in the second part. Third part presents some aspects and directions of CSR implementation by companies in Bulgaria, methods, forms, etc., that are typical for the Bulgarian business in recent years. They are classified according to the degree of utilization and the degree of efficiency from the business, not social, point of understanding. The fourth part covers the effects of CSR on the development of regions in Bulgaria (by presenting examples from selected regions). The focus of the survey is on the status quo and the trends of CSR implementation that is carried out by business organizations operating on the Bulgarian market. Their impact on the regional development, based on selected socio-economic and demographic indicators is also presented. For this purposes, the following research methods are used: data collection and processing of statistical information, data comparison method, diagnostic analysis, etc. Finally, the main conclusions are presented and the next steps of the authors’ research in the area of CSR in Bulgaria are outlined. Keywords Corporate social responsibility (CSR) regional development Enterprise strategies Bulgaria




8.1




Introduction

Corporate social responsibility (CSR) is an element of business contribution to the sustainable development. The corporate social responsibility is a new socio-economic phenomenon, especially for Bulgaria, and its applied introduction by Bulgarian business is important and not fully researched topic yet. Corporate social responsibility (CSR) has forcefully and irreversibly become a part of the corporate actions of a growing number of Bulgarian companies in the last decades, but CSR’s effects on regional level is not enough recognized neither by the regional authorities nor by the local societies. The paper aims to examine the role of corporate social responsibility (CSR) as a tool not just for improving the organizational performance but for regional development as well. So, it explores the theoretical framework of the corporate social responsibility, as well as some strategic CSR’s activities to outline the need of it for enforcing some key affects for regional development. For us, these key effects on the development of the regions are: unemployment rate, population growth, raising the level of education, etc. Further, the paper describes the linkages between these key aspects of business’ CSR and regional socio-economics development. Finally, the authors make an overview of some good practices showing the implementation of corporate social responsibilities in selected Bulgarian enterprises and demonstrating the possible improvements in the understanding the matters of corporate responsibility inside the Bulgarian companies.

8 Corporate Social Responsibility in Bulgaria: Perspectives …

8.1.1

143

State of Art

The concept for corporate social responsibility, namely the companies’ responsibility for the economic, social and ecological outcomes of their activities, is a relatively new concept in Bulgaria. The use of this notion has mainly been related to the processes of integration and acceptance of our country for a full-right member of EU and the established traditions and experience in this field of the international companies that have entered our market. In 2011, the European Commission published a new strategy on CSR, which aims to create conditions favourable to sustainable growth and employment generation in the medium and long term. Through CSR, enterprises can significantly contribute to the European Union’s treaty objectives of sustainable development and a highly competitive social market economy. CSR underpins the objectives of the Europe 2020 strategy for smart, sustainable and inclusive growth, including the 75% employment target. The European Commission has previously defined CSR as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”.1 The European Commission now puts forward a new and simpler definition of CSR as “the responsibility of enterprises for their impacts on society”. The EU’s strategy clearly demonstrates that the positive development of the European economy is closely related to Europe’s companies putting sustainability and corporate responsibility into practice on the ground and that these issues have to be driven by these very companies. To facilitate this, the EU is creating a shared political framework and promoting the discussion on CSR. In response to the dynamic socio-economic eco system, the Commission is making a number of regulatory proposals to ensure a more responsible and transparent financial system. The Commission intends to consider a requirement on all investment funds and financial institutions to inform all their clients (citizens, enterprises, public authorities, etc.) about any ethical or responsible investment criteria they apply or any standards and codes to which they adhere. The new policy also puts forward an agenda for action covering eight areas: • • • • • • • •

Enhancing the visibility of CSR and disseminating good practices; Improving and tracking levels of trust in business; Improving self- and co-regulation processes; Enhancing market reward for CSR; Improving company disclosure of social and environmental information; Further integrating CSR into education, training and research; Emphasizing the importance of national and sub-national CSR policies; Better aligning European and global approaches to CSR.

Despite the slow acceptance of the principles and policies of CSR in comparison with the world trends, the Bulgarian business has increased significantly its 1

EU Strategy on Corporate Social Responsibility (2011).

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awareness of these models, because apart from the practices that the companies themselves can benefit from, these business models serve as a condition for survival and competitiveness in today’s global economy reality. Various initiatives held by international and national organizations help the popularization of CSR amongst the Bulgarian companies. The ones that are worth being mentioned are: • The inauguration of the Bulgarian Business Leaders Forum (BBLF) in November 1998 and the launch of the project Code of Business Ethics October 1999 when several BBLF member companies presented their codes of business ethics and shared examples of good business practices. • The creation of a national network of companies, members of the initiative Global Compact, in 2003 that aimed to make social responsible practices in Bulgaria more popular. • In 2007, a Bulgarian Code for Corporate Governance was adopted and later on the Association of Bulgarian Industrial Capital together with the Association of Bulgarian Investor Relation Directors presented a Handbook of Good Practices for Corporate Social Responsibility, which is applied in the activities of 130 Bulgarian companies at the moment. • In 2010, indicators for measurement of the effectiveness of CSR on national and company level have been developed in the frames of the regional project “Increasing of the transparency and reliability of the CSR practices through establishment of a system for evaluation and monitoring of CSR in the new EU member-states”. The state also has an active role and encourages the implementation of CSR in the country by creating an appropriate legislative environment and conditions for effective partnerships between all interested parties. Bulgaria had ratified different UN conventions, related to respect of human rights, ecology and fight against corruption, as well as the ones related to International Labour Organization(ILO), in respect of the labour standards. In addition to that on 25 November 2009 was adopted a National Strategy for Corporate Social Responsibility, that reflects the state attitude towards CSR matters and has as an objective the creation and reinforcement of a favourable environment for the implementation of CSR practices. The strategy covers the 2009–2013 period and is divided in three steps: analysis of the situation; vision, goals and principles; and implementation of the CSR strategy. As a result of all these activities and efforts CSR’s popularity amongst the Bulgarian business is increasing and more and more companies declare their social and ecological engagement. Nevertheless, the fact is that in the greater number of cases the companies are doing charity, donations or restricted in their scope activities in this direction, and don’t act on the implementation of comprehensive internationally acknowledged corporate models and standards, aiming to be a part of a long-term strategy for sustainable growth. In 2011, a great advance in relation to the implementation of transparent and responsible management in Bulgaria was made and two companies presented their first reports on sustainable development and CSR (for 2010), based on G3 created

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by Global Reporting Initiative(GRI)—the world’s most widely used standard for measurement of the economic, social and ecological impact and achieving of sustainable development. If this example is to be followed by other companies, this will definitely set a serious base for the recognition of social responsible business models and the creation of a competitive and sustainable economy in Bulgaria.

8.2

Aspects and Directions of CSR Implementation by Companies in Bulgaria: Methods and Forms

The intensive process of globalization, the growing social and public requirements, as well as the unprecedented climate changes set new type of challenges for the companies that can be overcome only through responsible and transparent management and by having in mind the economic, social and ecological impact of their work. The broad range of areas in which CSR is categorized include: • • • • •

Involvement in the community; Internal corporate culture; Education and leadership development; Corporate governance and business ethics; Environmentally friendly business.

Above all, corporate social responsibility is a philosophy that the companies in Bulgaria believe every true business leader has to share. Today’s managers understand that the sustainable social responsible practices are the main element in achieving a successful corporate management and effective leadership. A prerequisite for meeting this responsibility is the observance of the legislation and the group contracts between the social partners. In order to be able to fulfil their CSR, the companies have to implement processes for integration of the social, ecological and ethical issues, as well as issues related to human rights and consumers, in their business activities and overall strategy. Moreover, the companies have to work in close cooperation with the interested parties aiming to (i) increase the creation of a shared value for their owners/shareholders and for other stakeholders and the society as a whole and (ii) to determine, avoid and tone down the possible negative effects. CSR is a concept, whereby companies integrate social responsibilities and environmental concerns in their business operations and in relations with partners on a voluntary basis. The most common social accountability covers the obligations of business to society, expansion of their circle, for economic functions and the inclusion of social activities such as necessities. The social responsibility of business is multi-layered. The first observance of the principles of corporate social responsibility involves compliance with the following obligations: timely payment of taxes, wages and creation of new jobs. The second level of CSR involves the provision of adequate conditions for work and life of

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employees by increasing their skills, preventive treatment, housing and social development. The highest, third, level of responsibility, charity events, including local infrastructure improvements. In particular, corporate social excuse can be crammed into the field: A. Society • • • • • • • •

Upgrading of the urban environment; PR activities and social impact; Volunteer; Support and social integration of children-orphans, and children and adults in homes; Preservation of cultural and historical heritage; The quality and safety of products; Donations; Sponsorship.

B. Ecology • • • • • •

Pollution control; Restoration or protection of the environment; Conservation of natural resources; Processing; Spending on energy efficiency and reduction of environmental pollution; Manage the impact of the environment and natural resources.

C. Human capital and working conditions • • • • • •

The development of a healthy and safe working conditions; Training and staff development; Support career development; Volunteer programs for employees; Programs for objective and fair remuneration; The satisfaction and commitment of employees.

D. Knowledge and education • • • •

Scholarships to support people at a disadvantage; Providing tools and materials for practicing at school; Providing a paid internship; Encouraging young intelligent people.

E. Marketing associated with business • Product donations. Social responsibility brings many advantages for the organizations using it. They could be seen in respecting the interests of all stakeholders; counting business influence over economy, society, environment; increasing reputation of the business organization; contributing for economic stability in the region, where organization

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operates in; accent over stable use of natural resources. The integration of corporate social responsibility, as a key tool in the strategies for company development, and the active dialouge with all interested persons can cooperate for long-term stable progress and increasing the value of relevant companionship, and it can realize competitive advantages2 in improving producing effectiveness; realization of product decentralization and innovations; better satisfaction of the company client’s needs; better management of the company risks; improving the personnel competence and increasing the value of intellectual capital by development of human resources; improving the trade reputation and company image; achievement of higher share price of the social responsible companies. Independently of the taken actions and created preconditions, corporate social responsibility of the Bulgarian companies is accompanied with settling problems like: • Passive attitude of the organization’s managers towards market’s attitudes; • Lack of information for regulation of social responsibility, not knowing the procedures and values of the certification favours; • Lack of resources for execution of certain activities by the social policy; • Organizational problems of the business organizations, as not regulated property, draining of funds, etc.; • Problems with sharing information for social responsible activities of organization. The main challenges at application of corporate social responsibility are connected with lack of the so-called administrative capacity; lack of leading state structure, which guides and coordinates actions of the single government institutions and collaborates with business, civil society, media and academic community; insufficient dissemination and not knowing the conception for corporate social responsibility; distrust of the community, syndicates, users and others; certain prejudices in business; myths and realities for the benefits from social responsible practices; pseudo-social responsible practices.

8.3

Effects of CSR on the Development of Regions in Bulgaria (by Presenting Examples from Selected Regions)

The CSR’s impact over the regional development could be found in the given above five directions. They could be specified in the following indicators in order to be found by the national social and business accounts: • Gross domestic product (GDP) per capita/Purchasing power standard (PPS) per capita: the market impact of the CSR’s activities means that the total income of

2

Gogova (2011).

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•

• •

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the local inhabitants will increase the total value of the business in the region and, respectively, it will increase the monetary wealth of the local society. Employment/Unemployment rate: the CSR’ activities basically involve more local people not just at temporary employment but decreases the long-term unemployment as well. It is because the CRS activities are provided by the local companies and, respectively inhabitants. In-patient average length of stay/Hospital days of in-patients/Number of people at risk of social exclusions: basically CSR activities help the society to develop and the health and social exclusion decrease. Participation rates in education/Education exclusion: whether the new employment opportunities arose by CSR’s activities the desire for education increases, as well as the rate of excluded pupils from the educational system decreases. Rate of natural change of population/Rate of net migration: the wealthy regions are magnets for the people. Thus, the regions that increase total value of life being increase their population exponentially.

The given five indices are used in analysis of the impact of the CSR on the regional development in Bulgaria. The time coverage is 2000–2016 as the different indices are observed by different time sets according to the national accounts. The data is collected and provided as open source database by the Eurostat and Bulgarian national statistical office. The regional data coverage includes statistical data for NUTS 2 regions in Bulgaria, respectively: north-west (NW); north central (NC), north-east (NE), south-east (SE), south central (SC), and south-west (SW). A data set for Pazardzhik at NUTS 3 level as a part of south central region is included as well. A. Development impact: the total development is basically observed by the change of GDP. We use a structural indices that reduce the regional inequality as: Gross domestic product (GDP) per capita (Fig. 8.1)/Purchasing power standard (PPS) per capita (Fig. 8.2). Figures 8.1 and 8.2 show that some Bulgarian regions are developing faster than others. For example: • The south-west region is economically over developed in comparison with the others regions. The GDP per capita in 2011 is more than twice than the following SE region. The difference in the indices “Purchasing power standard (PPS) per capita” is much higher. • In addition, the north-west and south central regions are developing slowly than the others. The figures for these regions flew down in comparison with others. • On the other side, the Pazardzhik region is economically presented well than the south central region. From the last place in figures for 2005, the researched indices sharply increase 2006–2008 and 2010–2011.

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Fig. 8.1 Gross domestic product (GDP) per capita by regions at NUTS 2 in Bulgaria

Fig. 8.2 Purchasing power standard (PPS) per capita by regions at NUTS 2 in Bulgaria

B. Labour impact: the job creation by the CSR’s activities reflected on the increase of employment rate (Fig. 8.3) as well as on decrease of unemployment rate (Fig. 8.4). The figures verify some of the above results. For example: • The south-west region is labour over developed in comparison with the others regions. The youth employment rate is 10% higher as the unemployment rate is 2.5% lower in 2011 than the following NE/SE regions. The difference in the indices “Purchasing power standard (PPS) per capita” is much higher. • In addition, the north-west and north central regions are characterized by lowest levels of youth employment and highest level of unemployment.

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Fig. 8.3 Purchasing power standard (PPS) per capita by regions at NUTS 2 in Bulgaria

Fig. 8.4 Unemployment rates from 15 to 74 years by regions at NUTS 2 in Bulgaria

• The case of south central region is interesting as it takes a middle position in the both indices, but they have highest change rate during the observed period. The employment/unemployment rates sharply increase/decrease 2005–2008 and 2012–2015, and vice versa: sharply decrease/increase 2009–2011. C. Social wealthy impact: it is measured by the share of people at risk of poverty and social exclusion (Fig. 8.5). Preliminary expectations are that the CSR’s activities reduce the social exclusion. The figures verify some of the above results. For example: • The south-west region is social wealthy over developed in comparison with the others regions. The social exclusion rate is 50% higher than the following SE regions.

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Fig. 8.5 Unemployment rates from 15 to 74 years by regions at NUTS 2 in Bulgaria

• The case of south central region is interesting as it had started at second place in 2008 with 43% rate of social exclusion and finished at last place in 2016 with 46% exclusion rate. All other regions have changed positively their exclusion rates even the most economic undeveloped NW region. D. Demographic impact: it is measured by the natural change of population and net migration. We use structural indices that reduce the regional inequality as: Rate of natural change of population (Fig. 8.6)/Rate of net migration (Fig. 8.7). Preliminary expectations are that the CSR’s activities increase the positive natural change of the population by increasing birth rate and decreasing death rate, as well as increase the positive net migration by reducing outgoing employees and attracting incoming employees by other regions/countries.

Fig. 8.6 Rate of natural change of population by regions at NUTS 2 in Bulgaria (‰)

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Fig. 8.7 Rate of net migration by regions at NUTS 2 in Bulgaria (‰)

Figures 8.6 and 8.7 verify some of the above results. For example: • The south-west region is the single region with positive figures on net migration with the lowest level of decrease of natural change of population. The north-west and north central regions are firmly last according to the both indices. • The cases of south central and north-east regions are totally opposite as the highest decrease of net change rate of SW in 2001 is quite opposite the positive net change of population of NE. The next ten years the negative figures for SC decreases opposite of the decreasing negative figures of net change of population of the NE region. Education impact: it is measured by the participation rates of children/youths in Primary and lower secondary education (Fig. 8.8)/Rate of early leavers from education. Preliminary expectations are that the CSR’s activities increase the

Fig. 8.8 Participation rates in primary and lower secondary education by regions at NUTS 2 in Bulgaria (%)

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participation and decrease the early leaver’s rate of child in the education system by inclusion children of the social excluded families. Unfortunately the figures do not allow the confirmation or rejection of the above results. The given results could be better understood by presentation ones of the best examples of CSR in Bulgaria in different regions and sectors: A. Marketing: Danone Bulgaria (Dairy Sector): South-West region Danone has officially set foot in Bulgaria in 1993, when the Group Danone acquired the state enterprise “Serdika”. For many years, the company is developing in various socially responsible practices, some adapted from the parent company, while others are purely local. Danone Serdika is a company that since its creation linked to the health of people is inherent in her genes. The mission of Danone, it gives health, through its products an increasing number of people around the world. In 1972, Group Danone is committed to so-called dual model of management, business—it combines the usefulness for business (economic) and society (social). It is based fits the belief that a successful business goes hand in hand with investment in the society. From the first day in Bulgaria, Danone rigidly to the model, this for many years finds manifestation in various projects expressing our socially responsible activities. The Danone’s strategy is to support a smaller number of projects, but for a much longer time. We believe that in this way the support is comprehensive and much more tangible. Since 01 January 2013, the projects Danone is working actively and focused on the external for the company audiences are: • • • • •

“Denoniada”; “Active and healthy”; “The hour child”; Donations of products Initiatives aimed at environmental protection—a project to reduce carbon emissions, the initiative “Put a tree branch with Danone” and “Earth Hour”.

As part of the Group Danone, “Danone Serdika” AD has formalized a policy on environmental protection from 2004, when confirms to the international standard for environmental management ISO 14001. The company‘s efforts towards environmental protection, however, date back to earlier. The protection of nature, it is inherent in our mission, namely “to bring health through healthy food in the greatest possible number of people”, and as we know, clean and healthy food comes from nature. With 2001 on the territory of “Danone Serdika” daily ensures the selective collection and recycling, management of hazardous substances, water consumption, thermal energy and electricity, with the aim of optimizing processes and reducing consumption of natural resources per unit of output. Since 2008, Danone implemented a procedure to measure of carbon dioxide (CO2) through a representative sample of their products. As a rule, an effort they

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focused on energy efficiency, energy savings and recovery of excess heat. Equipment is selected according to several criteria, such as part of them is related to the carbon footprint that is generated. Always with the advantage are the projects, as a result, which reduced hydrocarbon footprint. At the end of 2012, Danone BG stumbled upon a common goal which they set themselves in 2008, namely, for four years, they will be able to reduce carbon dioxide emissions of their products with a 30% on a global scale. In particular, Danone Bulgaria plans to reduce the rate of production over the period from 21.2%. One of the initiatives is the implementation of “Green schools Danone: All about nature” in 2011. It was attended by their employees and their families. With the help of Grove, WWF, Ecopak, Gimel, Bulgarian Biodiversity Fund and Natural History Museum has been more informal and fun way to get acquainted with the basic five priorities of the environment Danone Group: climate change, packaging, water conservation, sustainable agriculture and biodiversity. Transferrable knowledge and skills of our employees and their families in order to gather more ideas for projects for the protection of the environment and to pay attention to the small steps that lead to great achievements. Of two years, the company participates in the global initiative “Earth Hour”, as of 31 March 2012, was delivered to 84 kWh of energy, equivalent to a productivity of 1400 standard bulbs at 60 W. B. Environment: CEZ Bulgaria (Electricity): South-West (SW) and North-West (NW) regions The electricity power company CEZ intends to increase the use of renewable sources in the next few years. In the next 15 years, CEZ intends to invest the total amount of 30 billion Czech crowns in their development. About 20 billion of this investment will be used for construction of new windmills. That is why all activities, related to use of renewable sources, except the ones for power generation from biomass, were separated in the company CEZ Renewable Sources. CEZ regularly conducts volunteer event, which involved staff and top managers of company in Bulgaria. As part of these initiatives, are upgrading children’s facilities in a number of kindergartens in the territory served by the company. Replaced incandescent bulbs, energy saving lamps, clean yards, the shares are held for the collection of children’s clothes and booklets and more. Children of employees of the company prepare cards and gave them to the home for the elderly for the biggest Bulgarian holidays. At the initiative of the CEZ have been repaired and repainted part of the electric board along streets “G.S. Rakovski”, “Graf Ignatiev”, “Patriarch Evtimii”, “Moscow”, bul. “Dondukov” and more. Artistic action with the aim of improving the urban environment how to make it more attractive, modern and cosy. Campaign street talented artists have transformed into works of art with just 100 electrical switchboards, located in the representative part of Sofia. The campaign focus is on the improvement of the urban environment and the education of a responsible attitude to the elements on the part of the inhabitants of Sofia. In the future, CEZ is planning similar actions in other cities of western Bulgaria.

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C. Society: Mtel JSC. (Telecommunication): SW region Mtel JSC. is the first mobile telecommunication provider in Bulgaria. During its life it has been involved in numerous initiative and campaigns linked to different aspects of CSR. Massive fundraising campaign for children in foster care in Bulgaria is initiating from the national network for children. The campaign is part of the second edition of the project “Accept child. Create the future”, carried out from Mtel and non-governmental organizations. It provides financial support and promotes education in the Russian Federation. In the framework of the charity campaign was disclosed grants the number to which each may provide financial assistance for children living in foster parents. One Lev value donated SMS to the number 17 777, which should be with the text DMS DETE. Donations can be made through Bank transfer IBAN BG13UNCR76301078951570, as well as online on the website www.nmd.bg. The project “Accept child. Create the future” comes from the Mtel for the second consecutive year in partnership with the National network for children. In 2013, the Mtel provides financial assistance to at least 200 children in foster care in Bulgaria. The amount that Telekom donated to a child in the amount of 200 € and is available at a time for adoptive parents; 300 € estimated amount for a child with a disability. With this support, Mtel objectives to help foster families in meeting the initial needs of children, their placement in their new home. This need and the adoptive parents as a priority in the framework of the special research conducted in late 2012. The results show that the adoptive parents in Bulgaria work with the feeling that our society is ordered to the Russian Federation in the education of children. So this year, the project “Accept child. Create the future” includes fundraising campaign, which through introducing companies to business will contribute to the efforts of adoptive parents for a better future of children. Thanks to the first edition of the project “Accept child. Create the future”, 100 foster families received in 2012 additional financial assistance from Mtel. Program partners are the national network for children, Bulgarian grants forum, the Ministry of labour and social policy, State Agency for child protection, the newspaper Now and NetInfo. D. Working conditions and Human capital: Asarel Medet JSC: South Central region and Pazardzhik region Assarel-Medet JSC Mining and Processing Complex is the first, biggest and leading Bulgarian company for open-pit mining and processing of copper ores providing around 50% of the national production of the vital metal for the human development—copper. The company is the biggest and main factor for the social and economic development and the image of the municipality of Panagyurishte and the district of Pazardzhik. It has structural-determinant significance for the Bulgarian economy, as one of the leading industrial companies with an important contribution to the raw materials independence and gross domestic product of the country.

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Assarel-Medet JSC processes about 13 million tonnes of ore per year; thus, ensuring sustainable and stable development and production at thorough utilization of the mineral raw materials of the Assarel deposit. In respect of CSR, the company is implementing the philosophy of the approach in the area of working conditions, human capital, ecology, sponsorship and partnership. In the field of work conditions, Asarel-Medet JSC follows and strictly implements the rule that achieving corporate success is interlink with respecting moral values and meeting ethic, legal, environmental and social anticipations of the society to the company’s activity. Voluntary, profoundly realized and rationally motivated commitment of the company to the priority care for environment protection, safe labour conditions, personnel development, human rights and social needs consideration. Systematic risk evaluation and application of higher standards of occupational safety and health, which meet at least the minimal requirements by the legislation and the OHSAS 18001:2002 international specification under which our company was the first to be certified on 19 November 2003. Measures are: monitoring and planning of complex and preventive measures in order to reduce and eliminate the risk for the personnel health and life and to improve the labour conditions of all people working in the company; unconditional observance of the occupational health and safety requirements by the personnel and business partners on the territory of the company; use of high quality working and special garment and approved personal safety devices by workers; provision of efficient preventive medical checks, high quality medical care and the highest level of health and life insurance for all workers and employees; developing high health culture of the personnel as an important prerequisite for a healthy and safe way of life; active cooperation between the management body and representatives of the workers and employees in order to ensure healthy and safe labour conditions. Assarel-Medet JSC is active in partnership and sponsorship at local and regional level. It is possible to be distinct following areas of involvement: • Active involvement in the social and civil dialogue through successive actions in order to create economic stability and social security. • Donation orientated policy with a priority towards implementation of significant infrastructure projects and life standard improvement in the municipality of Panagyurishte—the place where we work and live and where our children and grandchildren grow. • Assistance for establishing cooperation between the municipality and dynamically developing European and other cities based on our company’s high prestige and contacts with international partners. • Active involvement and encouragement of the regional, national and branch association formation and efforts uniting in order to create favourable business climate.

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• Public–private partnership with the municipalities and the state along the technological chain for copper mining and processing in the region of the central Sredna Gora mountain through the Srednogorie Med Industrial Cluster. • Sharing the sustainable development principles of the UN Global Compact of which our company is a member. • Contribution to Bulgaria’s authority establishment in front of the European and world community. Participation in Euromin, the World Mining Congress and support for the participation of Bulgaria in prestigious international initiatives.

8.4

Main Conclusions in CSR in Bulgaria

The overall acceptance of the concept for corporate social responsibility is very important for the development of the modern society as the European commission has defined CSR and published strategy on CSR in 2011. The main idea of the CSR is the definition of the role and the responsibility of the contemporary business economic, social and ecological development of the society as the long term social expectations are stronger than the short term profit expectations of the business. Nevertheless, as the CSR is a concept of establishment business activities and outcomes for society and ecology sustainability, the CSR has done on a voluntary basis since now. Even though there is no exact list of activities describing the CSR, we can outline three basic elements of the corporate social responsibility: employment development as salary and tax payment as well as creation of new jobs; social development as life being and labour infrastructure building; and social inclusion and ecological development as charity to local social and ecology infrastructure improvements. By analysing, some good practices of CSR we could develop five directions that explain the CSR’s impact over the regional development: (i) Gross domestic product (GDP) per capita/Purchasing power standard (PPS) per capita; (ii) Employment/Unemployment rate; (iii) In-patient average length of stay/ Hospital days of in-patients/Number of people at risk of social exclusions; (iv) Participation rates in education/Education exclusion; (v) Rate of natural change of population/Rate of net migration. Analysis of Bulgarian case of CSR could be summarized in two directions: • The highest CSR costs are done in south-west region. Thus, all of the indices mention above are over exceeded the average level of Bulgaria and there is some times difference with the next region. • The case of south central region is interesting were the example of Assarel-Medet is found. The results of the region differ as the CSR campaign of company has changed. For example, with the indices of employment/ unemployment rate at the south central region: a middle position is in the

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both indices, but they have highest change rate during the observed period as they sharply increase/decrease 2005–2008 and 2012–2015, and vice versa: sharply decrease/increase 2009–2011. In conclusions, a more deep information base for CSR costs is needed to be built a decision-making cause-reaction business model.

References EC. (2011). EU strategy on corporate social responsibility. Accessed on 09.09.2017. http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0681:FIN:en:PDF%20. Accessed on April 1, 2018. Gogova, T. (2011). Corporate social responsibility and its influence over the company’s value (pp. 23–24). Sofia: UNSS.

Diana Kopeva is a full time professor at the University of National and World Economy (UNWE), Sofia, Bulgaria. She gives lectures on Strategic management, Entrepreneurship, Business Planning, Cost-Benefit Analysis and Project Management. She has more than 100 scientific publications, based on his research interests. She is one of the leading researchers in the area of business economics and entrepreneurship in Bulgaria. Her research interests are in the field of start-ups, corporate social responsibility (CSR) and circular economy. She participated in numerous projects (national and international) focused on CSR and transition from linear to circular and regenerative economies. Nikolay Sterev is full time professor in Organization and management of marketing at the University of National and World Economy—Sofia (UNWE), Bulgaria. He is Head of Industrial Business Department at the Business Faculty. He is Chairman of Association of Professors of Industrial Economics and Management (APIUI). Main research field are: industrial growth, leadership and marketing leaders, START-Ups and entrepreneurship, CSR in industry, industrial marketing management. Dimitar Blagoev is a associate professor at the University of National and World Economy, Sofia, Bulgaria. He has Ph.D. degree in the field of Business Economy. He is a deputy Dean of Business Faculty in University of National and World Economy. He actively participated as a lecturer in the Institute for Postgraduate studies. At the University of National and World Economy he teaches courses in Investments, Innovations, Economics of Enterprise and Innovation leadership. He has more than 60 scientific publications, based on his research interests, in the field of innovation, investments, industrial dynamics, human resource management. He participated as a trainer and expert in projects (national and international) aiming increase of competences and skills of labour force and development and implementation of investment and innovation projects.

Chapter 9

Property Inheritance by Women in Kosovo Simeana Beshi

Abstract One of the most important challenges in Kosovo remains the rule of law. In Kosovo society, women are discriminated against in terms of the division of inheritance in relation to males; although, legally the property should be divided equally. In Kosovo, there are still barriers in that direction. Today in Kosovo, there is a weak rule of law in general, since it still shows the dominance of patriarchal practices, especially in rural areas, where inheritance is not shared as defined by the law, as well as property created during matrimony is not recorded as property of both partners. Lack of proper realization of women’s rights in general and insufficient existence of property rights on property acquired during the marriage life, in particular, is a major obstacle to the development and empowerment of women in Kosovo. Gender equality in our country is very controversial. Tradition is considered one of the key factors that made women in Kosovo more reluctant in search of the right for inheritance. Some people see the request of the inheritance of women as a risk of weakening or total termination of relations of the woman with her family. The number of proceedings initiated in the courts for heritage profit is only 10% of them are initiated by women, making 90% of them are initiated by men. Although Kosovo is still rather traditional, it is still raising awareness of the equal right to property, for both genders, compared with the past. The mentality has changed in urban areas of Kosovo, while in rural areas still it is dominated by traditional mentality. Through the treatment of this topic, I will aim at increasing respect for human rights and fundamental freedoms by women’s rights in Kosovo. Keywords Inheritance wealth


Position of women
Inequality
Notary
Common

S. Beshi (&) Faculty of Law, FAMA College, Pristina, Kosovo e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability, Volume I, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_9

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Introduction

Heritage is an ancient social category. It was first shown from the early stage of development of human society, when some of the best material, in addition to the social community, belongs to the designated persons. Legal basis for the determination and implementation of inheritance rights in Kosovo is the Law on Inheritance of Kosovo it is based on the principle of equality in inheritance between men and women. Kosovo laws guarantee equal rights and non-discrimination. The right to own and inherit in terms of both the men and women indiscriminately. The right to inherit is among the fundamental principles of human rights without discrimination guaranteed by the international conventions. Referred to various factors that affect the property’s heritage separating women, such as the preservation of family relations, patriarchal traditions, education, unemployment, (…) that reflect the typical traditional mentality of Kosovo society. Although the right to inheritance is regulated by law and international conventions, in Kosovo, it is practically solved by traditions and customs. The customary law recognizes only a man as the heir and that is the reason that drives most women to give up the right to inherit. Right codified still unable to supplant the customary rules. The Canon continues to be present in rural areas as a regulator of relationships hereditary.

9.1.1

General Description of the Problem

Realization of the legal and moral rights of inheritance by women is seen as a problem that requires additional commitment of all institutional mechanisms and civil society. Despite some achievements, women in Kosovo, especially in rural areas, continue to be in an unequal position in many spheres of life, with particular emphasis on non-fulfillment of the right to property inheritance. So, the right of women to inheritance was treated by the society, but not in accordance with the law and with modern European values. The number of women, which realize their legal right to inherit is symbolic, therefore, the increased need for a more active approach to the institutions and the general public awareness of the population, that this legal right of women is realized. Compared with the past, now there is a growing trend of women who carry their owned properties, but the situation is still not at a satisfactory level. We can say that the right of women to inherit is in its embryonic stage. It is disturbing mentality and consciousness of the population, in terms of women’s rights as heir and owners. Lack of inheritance of property by women is affecting the position of women in the society, therefore, rightfully we can say that the role of women in society is about (in)visible (Kosovar Gender Studies 2011). This study explores and addresses the impact of various factors that affect the indivisibility of property inheritance for women as patriarchal tradition, education,

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unemployment, illiteracy, low levels of awareness, not disturbing the parents (brothers), lack of awareness for their rights, and reflecting the typical traditional mentality of the Kosovo society. Women in Kosovo, in most cases, do not enjoy the right to family heritage, as family wealth evenly divided only between male family members. In practice, we see that there are discrepancies between tradition and the legal rights that it may have legal consequences. Laws applicable in Kosovo guarantee equal rights for men and women, but the weight of culture and tradition, the poor economic situation, low education, against any effective equality, and the use of legal rights and legal mechanisms remains extremely difficult. Otherwise, the right to inheritance is a fundamental right guaranteed by the Constitution of the Republic of Kosovo, as the highest legal act of the country. Kosovo women “de jure” are equal before the law, but “de facto” remain discriminated. The large number of international instruments for human rights has made the issue of gender equality to be a field of interest not only nationally but also internationally. Those conventions determine the equal rights without discrimination between men and women and undertake initiatives to promote gender equality in all aspects. An important place among the International Conventions on Human Rights, occupies the Convention on the Elimination of Discrimination against Women, which establishes the equality of human rights for men and women, both in family and in society, as well as the elimination of all forms of discrimination (Idrizi 2014). Equality between men and women in Kosovo remains a sensitive issue. The main research question is how are women heiress property in Kosovo. In empirical work, focuses on the analysis of the position of women as successor. The main result is that we have a great heritage disproportion in favor of men. On the other hand, the notary functionality has improved the position of women in terms of common property.

9.1.2

The Importance of the Study

This study attempts to provide a theoretical analysis of property inheritance by women in Kosovo. The research conducted will help raise awareness of civil society on women’s rights, including their inheritance of the directors as equal gender. The importance of this study consists in the recognition of the provisions of domestic laws and international instruments on human rights that are relevant to women’s rights, especially those that are relevant to women’s property rights. This research includes the identification of the challenges that women face in practice, as well as the possibility that voice can be raised in order to realize and advance the position of women in society. The study carried out is important, because it formulates the hypothesis that determines the position of women as the property owners and heiress in Kosovo.

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Objectives of the Study

The main scientific question is how women are heirs of property in Kosovo. The aims of this study are: – To increase institutional law enforcement for heritage and gender equality law; – To increase the number of women on the use of their right to own and inherit property; – Enriching the knowledge of beneficiary parties and relevant officials; – The impact of traditional unwritten rules on the welfare of women in the realization of inheritance and property rights; – Strengthening the role of women and her awareness of the general public in relation to inheritance and property rights.

9.1.4

Research Question and Hypothesis

Based on the conducted scientific research and literature review, we formulate the main research question: How much are women heiress of property in Kosovo? To answer the main question we formulate the research hypotheses as follows: Hypothesis 1: Males inherit more and women much less. There is a great imbalance in favor of males heritage. Hypothesis 2: Functionality of notary impact on improving the position of women in terms of common property.

9.2

Literature Review

“The right of women to take legal action is limited […] and its ability to seek action by the courts. In others, her status as a witness or her evidence is less respected or weight less than any male. These laws or traditions restrict women’s right to seek or retain her equal share of property and diminish her position as a member of the independent, responsible, and valued member of her community” (Instituti Gjyqësor i Kosovës 2012). Illiteracy in Kosovo continues to be gender and age issue. Women in general are more than twice as illiterate than men (7.5% vs. 3.3% in urban areas and 11.3% compared with 5.5% in rural areas) (Population of Statistic Department 2011). The Constitution of the Republic of Kosovo, Article 22, for the advancement of the rights belonging to both genders in general and women in particular, has

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provided direct implementation of the Agreement, as international instruments (Kuvendi i Republikës së Kosovës 2008). The issue of equality and non-discrimination in legacy is ensured by the international legal instruments that are applicable. As a point of reference for the Universal Declaration of Human Rights (1948) which prohibits any kind of discrimination against women. These principles are set out in the Preamble of the Declaration which states that “recognition of the inherent dignity and of the equal rights and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world” (UN 2016). Other international instruments that guarantee and sanction equality and non-discrimination are the UN Convention on the Elimination of All Forms of Discrimination against Women (CEDAW), the Protocol to the Convention on the Elimination of All Forms of Discrimination against Women, the European Convention on Human Rights (…). Common to these legal acts is to guarantee, validation, legal protection, and enforcement of the signatory states to the internal legislation to harmonize these rights. These rights fall within the group of civil rights that include political, economic, social, cultural, etc., where is promised the fight against all forms of violence against women. Also Resolution 1325 of the Security Council of the United Nations on Women, Peace, and Security invites women from their experience in conflict contribute to maintaining peace and international security. This resolution promotes increased representation of women at all levels of decision-making in the prevention, management, and resolution of conflicts (Gender Training and Research Center 2008). In terms of these Conventions, the Constitution of Kosovo, Article 21 guarantees human rights and fundamental freedoms, while Article 24 provides for equality in front of the law and equal legal protection of rights regardless of gender, race, national background, religion, etc. Within the positive laws in Kosovo that are against discrimination the law that guarantees the right of persons to be treated equally by the law and to enjoy equal rights and duties in all areas of life and not to be discriminated against for any reason and in any environment (Kuvendi i Republikës së Kosovës 2004a). Then, the Law on Gender Equality, which in Article 16. Twelve envisaged that children, women, and men inherit property equally (Kuvendi i Republikës së Kosovës 2004b). The Law on Inheritance as a legal basis for inheritance, Article 3.1 provides that all natural persons under the same conditions are equal in inheritance (Kuvendi i Republikës së Kosovës 2004c). Canon of Lek Dukagjin, which is part of customary law, women are excluded from heritage. According to the canon: “If the heir is a woman, then the male shall be required until the 12th degree, only just that this property shall not be given to a woman” (Kosovar Gender Studies Center 2011, p. 22). The right of inheritance in general does not rule out the inheritance either gender, rather, legal instruments in positive law and in international law, guarantee the right of women to inherit. Examples of this are international documents and national legislation referred to in this paper.

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From the reports of NGOs and international organizations operating in Kosovo from 1999 onward, there is an overall assessment that women continue to be subjected to unequal inheritance proceedings. A research conducted by the monitors of BIRN about heritage in Kosovo and court cases in this area of law, state that in most cases only men are subject to the right to inheritance, while women voluntarily waive this right. Only in Pristina, Gjakova, and Prizren, there are cases where women have inherited from their parents’ property. In Ferizaj, Peja, Mitrovica, Glogovac, in 98% of cases women waive their inheritance rights (Drejtësia në Kosovë 2012). In Kosovo, often in professional debates or research studies have indicated that in practice, however, women are excluded from property they own or have given up their share of the property in favor of men in the family. In a survey, about the right of property inheritance for women in Kosovo conducted in 2011, conducted by USAID, more than 61% of respondents stated that even if we wanted the inheritance their right will be prevented by the family and even those few women who may be aware of their right to inheritance can decide to waive that right. 27.3% of respondents put first the relations with brothers and their parents, then property (USAID 2014). According to the OSCE report conducted in 2010, there are a number of obstacles related to the social position of women related to their right to inherit. These obstructions occur, especially due to masculine mentality that the property of the house should remain in the hands of man, as “the woman belongs to the man’s door” (OSCE 2010). Monitoring activities by USAID, regarding the justice system have focused on several issues, including the treatment by the courts in property disputes, including women. In court as discriminatory practices were observed: failure to notify the married daughters in the hereditary procedure (Basic Court of Gjakova) and counseling of married women for their share of inheritance to give them to their brothers (Basic Court of Peja) (USAID 2014). “A justice delayed is a justice denied” with all its meaning, it is present in Kosovo, which represents what can rightly be considered as the main problem in the lack of public confidence in the judiciary. With functioning of notary system of the Republic of Kosovo citizens have multiple interests. Citizens need not apply to a court for cases that are elected in an extra procedure; each contract, which has to do with the circulation of properties certified to the notary, not to the Clerk of the Court confirmations. Also, the application of the notary system has a very large discharge of the courts with cases, dealing with contentious proceedings, resolution-setting which Kosovo citizens have to wait for months (Beka 2009). According to a survey conducted by “POLIS,” respondents, who refused to elaborate why would examine the notaries, all have an answer, because the procedure is faster (USAID 2015). Only recent transactions and agreements between spouses dealing with property relations should be legalized by a notary service. This, de jure, has improved the status of the division of marital property (Färnsveden et al. 2014).

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Since 2012, it has begun functioning of notary service; the courts are observed reduction of the hereditary materials to the area. Notary has enabled citizens to exercise their rights more quickly and easily. From the work of notaries practice proved that no transaction or transfer of property is not done without consent of both spouses and women, respectively. This is an important step to support women in the field of heritage and common property. From the sayings of the above mentioned, we can say that, despite the existence of legal infrastructure in which women are treated as equal inheritance, practice shows that the right of women to inherit, despite evolutionary changes, after 1999, is still far from legal provisions because of the mentality, traditions and specific position of men in the family.

9.3

Research Methodology

Research methodology, which is used in this study is qualitative analysis, which will focus on the analysis of survey results. Some of the methods that will be used during this study will be: descriptive method; Inflict access qualitative methods (survey with judges from civil field, notaries, and civil clerks) and historical methods.

9.3.1

Sample

In this study, it is used the probability sample groups (clusters) so that each group represents or is a representative of the complete population. The population is divided into several groups (clusters), each representative of the population. A selection of study groups and are all units in the selected groups. The reason for the selection of the sample relates to the eligibility level and provides a better representation of the population for hereditary issues. In seven municipalities in Kosovo were surveyed judges from civil field, notaries and clerks, because hearing for inheritance begins and ends in the presence of these profiles. The research surveyed ten judges who deal with the examination of civil cases in seven Basic Courts of the Republic of Kosovo: Pristina, Prizren, Peja, Gjakova, Ferizaj, Gjilan, and Mitrovica. Parts of the survey were seven clerks and 13 notaries from the municipalities of Kosovo. Total part of the survey respondents were 30 profiles above mentioned. It is applied detailed interviews with professionals in the field. Data collection was conducted through personal interviews and direct written and e-mail, then the data/information sources are primary. The next will be presented samples of selected tables and charts (Fig. 9.1; Table 9.1).

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Fig. 9.1 Structure of respondents in chart form Table 9.1 Structure of respondents in table form

9.3.2

Municipality

Civil law judges

Notaries

Clerks

Prizren Pristina Peja Gjakova Ferizaj Gjilan Mitrovica

2 2 1 2 1 1 1

3 3 2 2 1 1 1

1 1 1 1 1 1 1

Research Instrument

This research was conducted through a questionnaire, which contains a total of ten (10) questions about the implementation of property rights and inheritance of property by women in Kosovo. Questions are considered to be sufficient to demonstrate the gap between laws and their practical application in society. Opinions of the respondents about the property’s heritage of women in Kosovo, containing questions, which give information on whether the provisions are foreseen by the law on the right to property inheritance for women and their access to inheritance. The challenge is not faced ex-officio initiation of the law on inheritance, in terms of reviewing the heritage of the responsible official, who mostly disaffects women and customary law. The survey was conducted through direct interviews with professionals in the field area, where the possibility of mistakes is small and the data are more accurate and more reliable. Submission of survey questions has become so generalized, which gives more opportunities to respondents, to escape the essay question and

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comment on something else or otherwise of what was required by the questions. In the questionnaire, there are specific questions, so that we will have concrete answers. Inadequate responses by the respondent’s increases the possibility of mistakes in reflection of reality regarding property and inheritance of property by women and misrepresent it. We can say that half of the respondents gave complete answers.

9.4

Research Results

From the results obtained based on a qualitative approach to the inheritance of property by women in Kosovo we can say that men inherit more and woman much less. There is a great imbalance in favor of males heritage. Functionality of notary impact on improving the position of women in terms of common property. Heritage Law of the Republic of Kosovo shall ensure that all natural persons under the same conditions are equal in inheritance. Therefore, to emancipate our society regarding property and inheritance rights of women in Kosovo, it has conducted research in the form of a questionnaire in seven Basic Courts of the Republic of Kosovo, through which we get the answers and opinions of judges who deal review of civil cases. Parts of the survey are also notaries and clerks of these municipalities.

9.5

Discussions

1. Heritage Law of the Republic of Kosovo recognizes the principle of equality and ensures that all natural persons under the same conditions are equal in inheritance. Besides the existence of legal infrastructure, Kosovo, in the context of inheritance and property rights of women facing the poor implementation of the Law on Inheritance and continuity of existence of unwritten laws and the impact of customary law. Legacy, although is regulated by law, “de facto” governed by tradition and custom in the division of property. In practice, we see that there are discrepancies between tradition and legal rights. 2. Based on the responses received from respondents, we can emphasize that the procedure for examining the legacy ex-officio, unfortunately still remains at a low level of implementation, because the civil registry officers fail to submit the act of death in the courts, so that the inheritance procedure is initiated only upon the proposal of the interested parties. 3. By hereditary reviewed cases, rarely or no review procedure was initiated ex-officio for heritage by the court. Initiate court proceedings after lodging hereditary proposals from parties. As a result of the examination procedure of not initiating the procedure for the heritage it is also ex-officio delayed the submission of the request for reviewing of the heritage draft. Often these

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4.

5.

6.

7.

8.

9.

10.

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proposals are not made until many years after the death of the testator. From the data provided by the courts, we conclude that the death certificate is marked not by all heirs, especially female heirs are not included. Discriminated women do not file a claim and do not require to be entitled to judicial decisions. According to court statistics, the number of proceedings initiated lawsuits in the contentious procedure by women is extremely small, or not initiated any subject for that matter. The relevant municipal authority (registrar’s office) does not provide regular monthly court information about documents of death certificates that issued to citizens. At the entrance to the civil registry service, we did not find any public announcements, which reminded citizens that false declaration of family status and giving false testimony by witnesses is a crime and they are sanctioned if they do act such. Obtaining information from the Office of Civil Status, for each death certificate, we have found in many cases that many female successors in death certificates do not appear at all. Not included in the civil registers of all family members and unreported deaths courts. According to officials interviewed by the Civil Registry Office of the obstacles they encounter in which are: insufficient human resources (lack of staff) and financial services, the lack of space in the office and lack of adequate equipment to work. Increasing the number of staff made only during the summer to accommodate the additional requirements for the needs of the diaspora. Judicial practice and research conducted with notaries, proved that men possess more and women possess less, there is a large gap of inheritance in favor of men, while the region of Pristina and Prizren lead to cases when women inherit hereditary wealth. Even in the few cases, where women inherit dominance observed in urban areas, much less to say at all in rural areas. Despite that by law women and men inherit equally, in practice, when several factors affect women waive the right of realization of the right to property and inheritance. These factors are: the social, economic, traditional customs, maintaining relationships with brothers or family, avoidance of conflicts, non-efficiency of the courts, etc., ignorance of the law. The reasons and causes of the phenomenon of our heritage are largely patriarchal society, where tradition and law collide with each other. Patriarchal traditions, living in large family community always had a negative impact on the development of women’s rights to property and inheritance. However, the establishment of education, educational, intellectual, and cultural level, invasions from one place to another, it has contributed to our families, relatives, society emancipated, and feminine in supporting the realization of property and inheritance rights. If women encounter obstacles from family, necessary for the inheritance, the law on inheritance, the law on gender equality and anti-discrimination law obliges the state bodies and courts to protect the rights of citizens and thus also women’s rights.

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11. Since 2012, it has begun functioning of the notary service, the courts are observed reduction of the hereditary materials to the area. Notary has enabled citizens to not face delays in the processing of cases of inheritance, prolong the proceedings, delays in execution of court decisions and other procedural problems. Now citizens of their rights of inheritance can realize without delay and in a shorter period of time. Notary offices engage more in verification of the heirs, before issuing a document on the right to inheritance. 12. From the work of notaries, the practice proved that no transaction or transfer of property is not done without consent of both spouses and women, respectively. This is an important step to support women in the field of heritage and common property. Functionality of notary services has led citizens to provide services more quickly and easily and improvements of the position of women in terms of the common property, as it is considered that it is registered in the name of both spouses.

9.6

Conclusions

Women in our country is lagging behind in the implementation of the right to property as a result of customary law and traditional relationships within the family and our society. Women’s rights remain a major challenge for the development of Kosovo society, in particular about their right to own, to inherit wealth and their equal participation in the economy. The current study examines the inheritance of property by women in Kosovo how much are women successors of property in Kosovo, the influence to citizens to perform notary services more quickly and easily and to improve the position of women in terms of common assets. Through this research, we prove what respondents think in different municipalities of Kosovo for these two hypothesized cases. The survey for the research questionnaire was used as the primary instrument to get the views of respondents about the property and inheritance of property by women in Kosovo, the impact of notary performing legal services for citizens and improve the position of women in terms of common assets. The main goal of this research is to emphasize that in Kosovo men inherit more, women much less. There is a great imbalance in favor of males heritage. Functionality of notary impact on improving the position of women in terms of common property. To answer the main research question and to achieve the purpose of the research, this study developed a basic theoretical and conceptual model. The information used in this study is the combination of theories and research results on the ground. Making validation of these two hypotheses, determining the property and inheritance of property by women in Kosovo, the impact of notary performing legal services for citizens and improve the position of women in terms of the common property, and contribute scientific literature and the field of inheritance and property

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rights in general, with special emphasis of property and inheritance of property by women. A democratic state cannot be imagined without the woman and her active participation in all spheres of social and political life.

9.6.1

Study Limitations

This study has its limitations, because it studies the property and inheritance of property by women only in Kosovo. The findings are based mainly on the territory and population of the Republic of Kosovo. It had to be used the quantitative research methodology, statistical data collection by the court administration, the civil registration offices, notaries, and municipalities across Kosovo, which lacks. It explores only the Republic of Kosovo, therefore, future studies should be extended to other countries in the region, namely in the neighbors states, using comparative analysis between Kosovo, Albania, Macedonia or other countries beyond. In the research, females are have not been surveyed to understand their views on “Heritage property by women in Kosovo,” how they consider the practical implementation laws. Much of the research is conducted by respondents with ethnic Albanians, leaving aside the inclusion of minorities.

9.6.2

Future Directions of the Research

The research can be extended to other countries in the region, namely in neighboring countries and beyond, and the application of the comparative method. Comparison of inheritance of property by women in Kosovo to other countries in the region still presents an opportunity to research the future by academics and experts in this field, but also by local NGOs in various countries of the Republic of Kosovo. In the future research, it should be expanded the circle of respondents and increase their number, so that the information collected would be more convincing and the possibility results be more realistic. The study should be expanded in terms of inclusion of communities living in Kosovo, in order to possess the attitudes resources and their position as part of Kosovo society about the property and inheritance of property. In the future, civil society, NGOs, and law-making institutions should organize awareness campaigns for citizens (through public debates, brochures, and social media), especially among the youth regarding property and inheritance rights of women.

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References Beka, A. (2009). Noteria dhe Kadastri në Kosovë (pp. 13–14). Prishtinë, Kosovë: Kolegji Universitar Biznesi. Drejtësia në Kosovë. (2012). Trashëgimia në Kosovë- femrat ende besnike ndaj “traditës dhe Kanunit”. (Online) Available http://kallxo.com/dnk/trashegimia-ne-kosove-femrat-endebesnike-ndaj-tradites-dhe-kanunit/. Accessed on November 12, 2018. Färnsveden, U., Qosaj-Mustafa, A., & Farnsworth, N. (2014). Profili Gjinor i Vendit (p. 20). Prishtinë, Kosovë: Orgut. Gender Training and Research Center. (2008). Të kuptuarit e Rezolutës 1325 të Këshillit të Sigurimit të Kombeve të Bashkuara mbi Gratë, Paqen dhe Sigurinë (p. 6). Prishtinë, Kosovë: Friedrich Ebert Stiftung. Idrizi, N. (2014). Instrumentet Ndërkombëtare për Barazinë Gjinore (p. 4). Prishtinë, Kosovë: Instituti Gjyqësor i Kosovës. Instituti Gjyqësor i Kosovës. (2012). Trajtimi i çështjeve të barazisë gjinore dhe mbrojtja e të drejtave të gruas në Instrumentet Ndërkombëtare (p. 9). Prishtinë, Kosovë: IGJK. Kosovar Gender Studies Center. (2011). Women’s property inheritance rights in Kosovo (pp. 17– 22). Prishtinë, Kosovë: KGSC. Kuvendi i Republikës së Kosovës. (2008). Kushtetuta e Republikës së Kosovës. Kap. II Kuvendi i Republikës së Kosovës. (2004a). Ligji Nr. 2004/3 kundër Diskriminimit. K. I. Kuvendi i Republikës së Kosovës. (2004b). Ligji Nr. 2004/2 për Barazi Gjinore. K. I. Kuvendi i Republikës së Kosovës. (2004c). Ligji Nr. 2004/26 për Trashëgiminë i Kosovës. K. I. OSCE. (2010). Të drejtat e gruas në legjislacionin Shqiptar (p. 32). Shqipëri: Kingdom of the Netherlands & Sida. Population of Statistic Department. (2011). Women and man in Kosovo (p. 5). Prishtinë, Kosovë: Sida. UN Convention on the Elimination of All Forms of Discrimination against Women (CEDAW). The protocol to the convention on the elimination of all forms of discrimination against women, the European convention on human rights. https://www.un.org/womenwatch/daw/ cedaw/text/econvention.htm. Adopted by the UN General Assembly on December 18, 1979. United Nations. (2016). The universal declaration of human rights. (Online) Available http:// www.un.org/en/universal-declaration-human-rights/. Accessed on June 7, 2018. USAID. (2014). Women and commerce report (pp. 12–25). Prishtinë, Kosovë: CLE. USAID. (2015). Të Gjeturat dhe Rekomandimet e Organizatave Lokale nga Aktivitetet e Monitorimit të Gjykatës (p. 9). Prishtinë, Kosovë: Atrc.

Simeana Beshi born on May 15, 1991, in Prizren, Republic of Kosovo, a Ph.D. Candidate in the field of Financial Law, at the University of Pristina “Hasan Pristina,” in Pristina, Republic of Kosovo. Works as: Assistant Teacher at Public University of Prizren “Ukshin Hoti,” Faculty of Law, str. “Rruga e Shkronjave,” no. 1, Prizren 20000, Republic of Kosovo; Lecturer at Kolegji “FAMA”, Faculty of Law.

Chapter 10

Women Rights for Sustainable Business and Entrepreneurship: Case from Balkan Area Kıymet Tunca Çalıyurt

Abstract The first step in the protection of women’s rights is to be recognized as human rights. For women to live happily and confidently in daily life, they have to be in economic growth, have educational reasons and have a profession. Today, the competence of countries regarding women’s rights is measured not only by legislation but indices. This study examined the rights of women living in the Balkan countries in the business world. As a result, it has been understood that it is necessary to increase the proportion of women in the business world where they are standard and to remove the obstacles to the rise of women in management. It is recommended that the Balkan Business Women and Women Academician Initiative Group are established to protect the rights of women in the business world to decrease gender inequality in Balkan Countries. Keywords Women business

10.1


Balkan
Women rights
Entrepreneurship
Sustainable

Introduction

The concern of measuring gender inequalities emerged in the academic and political environment after 1990, along with the awareness of the actual connections between social risks and the presence of these inequalities, also as a result of highlighting the associations between these and economic growth (Dollar and Gatti 1999a). Economic developments depend on many criteria that one of them is contribution women to economy. According to United Nations, Women Reports “When more women work, economies grow. An increase in female labour force participation—or a reduction in the gap between women’s and men’s labour force participation—results in faster economic growth” and also means healthy kids. Evidence from a range of countries shows that increasing the share of household K. T. Çalıyurt (&) Business Administration Department, Trakya University, Edirne, Turkey e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability, Volume I, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_10

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income controlled by women, either through their earnings or cash transfers, changes spending in ways that benefit children. Women continue to participate in labour markets on a different basis with men. In 2013, the male employment-to-population ratio stood at 72.2%, while the ratio for females was 47.1% (United Nations, women, facts and figures … 2018). However, women contribute to the economy needs to eliminate barriers entering the business life like the gap between women and men for women. “Women in business” is an emerging issue among the business world, academicians, NGOs, governments and other parties. Each party takes the issue from a different perspective. However, everyone agrees that women in business have many, many problems (Caliyurt 2017). According to Sawicka and others, “Equality is an essential characteristic and indicator of democracy, which is why the goal of many modern societies is the desire to respect the principle of equal opportunities because undoubtedly translates into the quality of social, political and economic life of citizens, thus ensuring a more sustainable and balanced socio-economic development” (Sawicka and Lagoda 2015). For example, there are still some difficulties to measure women’s contribution to the economy. According to Sabotinova from Bulgaria (2016a) “Unpaid work as a women’s or gender issue has a long UN history. There have been attempts from the United Nations and academic and feminist circles for care and domestic activities the home to be classified as valuegenerating work, and as a large component of wealth”. Few efforts have been made in this direction both because of technical and methodological difficulties and of what the statistical measurement of unpaid social reproduction would require … The inclusion of unpaid work (household, caregiving or subsistence activities) in the systems of national accounts would have major consequences, given the importance of these instruments for policy-making and economic decision-making, at both the national and international levels (Sabotinova 2016b). Balkans, also called Balkan Peninsula, easternmost of Europe’s three great southern peninsulas. There is no universal agreement on the region’s components. According to Encyclopaedia Britannica, The Balkans regions include the following countries. To make a good start discussion on women rights in Balkan area, listing countries’ rank in Gender Inequality Index (GII). • • • • • • • • •

Albania, (Gender Inequality Index—70th) Bosnia and Herzegovina, (not listed) Bulgaria, (Gender Inequality Index—43rd) Croatia, (Gender Inequality Index—59th) Kosovo, (not listed) Macedonia, (Gender Inequality Index—69th) Montenegro, (Gender Inequality Index—79th) Romania, (Gender Inequality Index—77th) Serbia—with all or part of each of those countries located within the peninsula (Gender Inequality Index—45th) • Portions of Greece (Gender Inequality Index—87th) • and Turkey (Gender Inequality Index—130th)

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are also located within the geographic region defines as Balkan peninsula (Encyclopaedia Britannica 2018).1 In this study, women rights in business in Balkan area and their ranks in GII, report results, academic researchers related to women rights in business in Balkan area and international pressure group activities and their reports are discussed.

10.2

Sustainable Reporting and Women for Sustainable Business

For sustainable economic development and business life, companies should be forced to disclosure about their gender activities. Caliyurt and Oruc held a search in public companies in Turkey. In the discussions about the topic of women, despite women being categorized as others, we should not ignore that they are both employees of businesses and partners of the society as a piece of it. How women take a part in the CSR and sustainability operations of businesses, or how women have perceived problems in the society and businesses are evaluated, and what is being done has been the starting point of the research. Thus, the review the sustainability reports of businesses included in Istanbul Stock Exchange Sustainability Index, claiming they are sensitive about CSR is sought for. It is observed that most of the 63 firms that appear in the list, most have not yet issued a sustainability report, some of them found annual reports adequate, and some of them issued CSR or CSR compliance reports. Since these reports do not answer the research question, they have been moved out of sample. When the sustainability reports of those 31 businesses are taken into consideration, it is seen that some of these businesses have sustainability reports based on the holding that they are affiliated with. Based on the sustainability activities of the enterprises, it is considered that the topic of women can be considered in two dimensions. In the evaluations made, it is seen that the businesses emphasize that they are sensitive to some or many of the discrimination practices in business life about the topic of women that is stated in the literature. It is possible to state that holdings and international companies in the evaluation are making more efforts in this regard. The themes that are determined accordingly are assessed depending on how women are treated as internal and external stakeholders. Here is some positive finding from our research. It is seen that especially banks that have a sustainability report emphasize this matter; It was the first Turkish bank to become a member of “We Connect International”, a global organization that aims for women entrepreneurs to take part in the supply chain. It provided women entrepreneurs with a total of 2.8 billion TL in loans until the end of 2015.

1

http://reports.weforum.org/global-gender-gap-report-2015/rankings/.

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Fig. 10.1 Preferred salaries when men and women are up for the same role. Source 2017 Women, work, and the state of wage inequality, https://hired.com/gender-wage-gap-2017 In 2007, Xbank, the first bank in Turkey to support women entrepreneurs who want to start a business with Women Entrepreneur Loan, has also been in the pioneering position in the sector as the first public bank to use TV banking and have offshore branches abroad. The bank gives great importance to backing up women with an entrepreneurial spirit who aim to establish their own business and the improvement and strengthening of businesses that are driven by women’s labour force. In this context, the Bank which has continued its support for women entrepreneurs since 1994, with its collaboration with KOSGEB Small and Medium Industry Development Organization, has supported approximately 800 entrepreneurs with the training held in 17 provinces in 2013.2

While positive things are happening in the business sector, women in business have many problems, however, sometimes problems are created by women as follows because of lack of self-confidence. 69% of the time women in the industry ask for less money than men. This example shows up that women should improve her self-esteem (Fig. 10.1). Laçka and Rushani (2016) stated that “Albanian nation historically has been regressing in the emancipation and integration of women in society. However, in recent decades, it can be said that satisfactory progress has been made in this direction, but it is not enough. There is not a fact that women are banned from male influence, but there is still a deficit, especially as regarded to older generations and the middle ones. Now we have enough examples in society for successful women and ladies, as in education, politics, as well as in the sphere of business. Even the women have too many good examples of cooperation, such as cases of various organizations and initiatives by women politicians that know and want to eliminate partial ideological differences for the benefit of society and the common good. Therefore, it is necessary to sensitize the whole society on the mass education of

2

Caliyurt and Oruç (2016).

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women, emancipation and its full integration into society. This should be supported by both genders, but especially from females, from women who have already been successful, so women to enjoy their rightful place in society and not to become a tool of calculations through quotas, but to fight with all democratic means to be equal in representation”.

10.3

Indices and Regulations About Women Rights in Balkan Area

There are important laws for protecting women in their current and business life. The most important regulation is the CEDAW agreement. Equality of rights for women is a basic principle of the United Nations. The Preamble to the Charter of the United Nations sets as one of the Organization’s central goals the reaffirmation of “faith in fundamental human rights, in the dignity and worth of the human person, in the equal rights of men and women”. Article 1 proclaims that one of the purposes of the United Nations is to achieve international cooperation in promoting and encouraging respect for human rights and for fundamental freedoms for all without distinction as to, inter alia, sex. The Convention of CEDAW defines discrimination against women as “… any distinction, exclusion or restriction made on the basis of sex which has the effect or purpose of impairing or nullifying the recognition, enjoyment or exercise by women, irrespective of their marital status, on a basis of equality of men and women, of human rights and fundamental freedoms in the political, economic, social, cultural, civil or any other field” (http:// www.un.org/womenwatch/daw/cedaw/). In the following table, we will discuss the reports published by shadow NGOs related to CEDAW commitment by countries (Table 10.1). As seen in the table, NGOs’ comments are very strict on regulations for governments.

10.4

Scores from Reliable Indexes on Women Rights

Social gaps caused by gender differences were evaluated for the first time by PNUD (UNDP) using two composite indicators: • Gender-Related Development Index and • Gender Empowerment Measure. Among the criticisms these indicators have been subjected to, we note their inability to adapt its territorial context of the phenomenon. The most popularized quantification methods for the gender inequalities are proposed by PNUD (UNDP), which produced two synthetic indicators used worldwide:

Higher education

In Albania, there are 31% women with the title Professor versus 69% men, 51% Ph.D.s versus 49% men, and 62% docents and pedagogues versus 38% men. Although that we have more women than men with the title Ph.D.s or pedagogues men are ruling the system of education with 12 rectors men versus 1 woman, 14 deputy rectors men versus 9 women, 183 men as members of Senate versus 90 women and 44 men versus 15 women as deans, chiefs of department 170 men versus 102 women

Population and female population

Albania total population of 2,893,000 inhabitants consists of 49% women and 51% men (http:// www.instat.gov.al/en/ home.aspx). 42.8% of the population lives in rural areas, and 57.2% lives in urban areas

Country

Albania (http://www. un.org/ womenwatch/ daw/cedaw/; Arqimandriti and Llubani 2018) In 2014 in Albania, the gross average monthly wage per employee is 45,539 Lek. For men employees, the total average monthly wage is 47,664 Lek and for women, employees are 42,852 Lek

Wages

Table 10.1 Shadow groups reports related to Cedaw regulatıons in Balkan area

The gender pay gap is 10% (Institute of Statistics of Albania (INSTAT) 2014). That means that men employees have a gross average monthly wage 10% higher than women employees. Gender pay gap varies depending on the type of enterprise ownership. The gross average monthly wage per employee in foreigner enterprises is more than two times higher for men compared to women. For employees in public enterprises, the gender pay gap is almost insignificant (−1%). In Albanian private enterprises, the gender pay gap is 8%, whereas in Joint venture enterprises this indicator is 37%

Gender gap As of 2014, Albania has not achieved any of the targeted quotas for women participation in P parliament (The Organization for Security and Co-operation in Europe average 24.8%, Beijing Platform target 30% and CoE recommendation 40%). In the Organization for Security and Co-operation in Europe region, however, less than half of the countries have reached any of the set targets and recommendations (with only four countries that have exceeded the 40% recommendation of the CoE)

Women in decision making

(continued)

According to INSTAT in 2014 (The Institute of Statistics 2015), the percentage of women owners/administrators of enterprises is 28.5%. The percentage of women owners/administrators in small enterprises (1–4 employees) is significantly higher than in other categories. From 2005 to 2014 the rate of women owners/ administrators has increased in all groups, with the highest increase for enterprises with 1–4 employees, approximately 6%. During this period, for big enterprises with more than 50 employees, the growth is 3.7%. During the year 2014 from 17,377 newly created enterprises, 31% of them owned/managed by women and 69% by men (INSTANT-The Institute of Statistics 2014)

Women entrepreneurship

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Women entrepreneurship Self-employed females in 2014 were 19.1% while males was 21.8%. Regarding different industry sector employment of females, 60% of them were employed in services, 23% in agriculture and 16% in non-agricultural or other related industries (Palalic et al. 2017c)

Women in decision making In B&H, women hold 24.1% of top managerial position and 27.2% own a business. Kosovo is a little bit lower, top management by females was 7.2% while business owner was 11.1% of women (Palalic et al. 2017b)

Gender gap The National Gender Action Plan on Gender Equality (GAP), adopted initially in 2007 and renewed to cover the period 2013–2017, builds on national and global conventions and strategies (e.g. CEDAW, EU, UN) to promote the implementation of the LGE. It is complemented by the Financing for the Implementation of the Gender Equality Action Programme (FIGAP) adapted to provide for the law’s long-term implementation (Djulic and Kuzman 2013; AGEBiH 2016). Main priorities in FIGAP include ensuring measures for women’s increase in labour, employment and access to economic resources

Wages Another frequent form of violating women’s labour rights is related to maternity pay which is, in most cases, lower than the wage earned during work. The budget continually lacks funds for maternity leave payments and in the period of crisis when the State reduces pricey security transfers, the first on the target are the budgets intended for women and marginalized groups (Idžakovic 2013)

Higher education

World Bank revealed in their annual report of 189 world economies (World Bank 2015) 2 ranking that shows how easy is to do business in each country. According to this report, B&H takes one of the least ranks in the Balkans. Ratings among them are Macedonia in 12th place, Croatia 40th, Montenegro 46th, Serbia 59th, Kosovo 66th, B&H79th and Albania 97 the. For domestic, especially foreign investors, this is a significant burden if they decide to invest in this country (Palalic et al. 2017a)

Table 10.1 (continued)

Population and female population

Bosnia has an estimated 2018 population of 3.50 million. Women population is 43.1. Regarding gender proportion in the employment rate in 2014, the above report showed that there were 41.2% men and 22.7% females while regarding unemployment rate, there were 31.2% females and 25.2% males

Country

Bosnia and Herzegovina (Petrid et al. 2018)

(continued)

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It’s estimated that Bulgaria has a population of 7.04 million in 2018. There are 1053 females for every 1000 males (Bulgaria Population 2018)

Country

Bulgaria

Table 10.1 (continued)

Female entrepreneurship continues the upward trend globally. Latest research shows that women’s entrepreneurial activity is up 10%, closing the gender gap by 5% since 2014. In the past year, 163 million women were starting businesses across 74 economies worldwide, while 111 million were running established businesses. Among the 63 economies surveyed in both this and the last report produced in 2015, GEM found that Total Entrepreneurial Activity (TEA) among women increased by 10%, and the gender gap (ratio of women to men participating in entrepreneurship,) narrowed by 5%. These The main policy commitments in the area of gender equality in Bulgaria are set out in the national strategy for gender equality 2009– 2015, which aims to “provide guarantees for equal access to resources and similar participation of both women and men in decision-making, with a view towards their successful personal and social development and the promotion of gender equality in all spheres of social, economic and political life (National strategy for promoting the equality … 2018)”

The gender pay gap in Bulgaria widened from 12.3% in 2008 to 13.5% in 2013, but was still better than the European Union average, going by figures released by EU statistics office Eurostat ahead of International Women’s Day on March 8, 2015 (Gender pay gap in Bulgaria … 2018)

The gender overall earnings gap is the difference between the average annual earnings of women and men. It takes into account three types of disadvantages women face: • lower hourly earnings; • working fewer hours in paid jobs; and • lower employment rates (for example when interrupting a career to take care of children or relatives). The gender overall earnings gap in Bulgaria stands at 22.8% (the average gender overall earnings gap in the EU is 39.6%) (The gender pay gap Bulgaria 2018)

Although the Bulgarian government has adopted many documents in the past 15 years which introduce policies and programs for development and improvement of economic, social and health situation of Roma people, it must be noted that the country’s second-biggest minority group is still at the very bottom of all spheres of social organisation. The progress in educational reforms is no exception despite the presence of these political frameworks (Substantive equality and non-discrimination … 2018)

(continued)

Women entrepreneurship

Women in decision making

Gender gap

Wages

Higher education

180 K. T. Çalıyurt

Women make up only 14.7% of members of the current Parliament, a figure well below the global average of 22% and the 30% target set by the United Nations Economic and Social Council in 1995, and a decline from the previous Parliament’s 17.8% (UN Women presents gender review … 2018)

The Committee stated its concern in its 2010 Concluding Observations “about the discrimination faced by women in employment, as reflected in the hiring process, the persistence of a wide gender pay gap and of occupational segregation, as well as women’s concentration in agriculture in rural areas as unpaid family workers with no entitlements within the social security system [28]. Turkey’s gender gap overall places it 130th of 145 countries, according to the 2015 Global Gender Gap Index of the World Economic Forum (http://reports. weforum.org/globalgender-gap-report-2015/

Income differences are seen between genders at every educational level, but it is more common among those with lower educational levels. By 2014, compensation differences between women and men who have primary or lower educational level is 18%. This difference is 17.8% among those who have high school and higher educational levels. The same situation applies to management positions. By 2014, female managers earn an income 6.6% lower than male managers (NGO shadow report to the seventh periodic report … 2018)

The participation and representation of women in decision-making mechanisms is consistently low (the highest rate of participation by women in Parliament to date is 17.08%, while at the level of Mayor it is 3.7%). In addition to that, women’s participation in decisionmaking mechanisms from bureaucracy to the judiciary, business life and academia, is very limited. By February 2015, on the one hand, the percentage of women currently serving as governor was 2.4% and as minister was 3.8%. The rate of women’s representation in Turkey’s Higher Judicial

80,845,215 (estimated in 2017) Female population constituted 49.8% of Turkey’s population. According to the formal data provided by the Turkish Statistical Institute in 2014 the rate of women’s participation in the labour force is 30.3%. This is one of the lowest rates in the world. According to the same data, the employment rate is 26.7%. When we exclude unpaid female agricultural workers in rural areas, women who receive allowances for home care (who, incidentally, lack social security rights) and women who work part-time or under flexible conditions, the

(continued)

While the rate of Early Stage Entrepreneurship in Turkey in 2015 was 17.4%, it dropped to 16.1% in 2016. However, this rate (16.1%) is still higher then the average rate of efficiency-driven economies (14%). According to the Global Entrepreneurship Monitor (GEM) 2016/17 Global Report released today by Babson College, Universidad Del Desarrollo, and Universiti Tun Abdul Razak, 55% of entrepreneurs worldwide expect to create at least one job in the next five years. In general, the expectation for growth among entrepreneurs is low. However, the ratio of

same economies show an 8% increase in women’s ownership of established businesses (GEM 2016/ 17—Special topic report … 2018)

Women entrepreneurship

Turkey

Women in decision making

Population and female population

Country

Gender gap

Table 10.1 (continued) Wages

Women Rights for Sustainable Business and Entrepreneurship …

Higher education

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Higher education

Bodies are 14.2% (TURKEY: Shadow report summary … 2018)

Population and female population

actual rate of employed women is even lower. Furthermore, while the female unemployment rate is 11.9%, this rate is much higher among young women aged 15– 24 (20.4%) (TURKEY: Shadow report summary … 2018)

Source Designed by the author

Country

Table 10.1 (continued) Wages rankings/). Turkey ranks 105th in educational attainment, 105th in political empowerment, and 131th in economic participation and opportunity

Gender gap

Women in decision making

early stage entrepreneurs who have the potential to grow is high in Turkey and Turkey is second on the list among the 62 countries (Entrepreneurship Monitor (GEM) 2016/17 global report … 2018)

Women entrepreneurship

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• GDI (Gender-Related Development Index) and • GEM (Gender Empowerment Measure). Subsequently, these two indicators were subjected to criticism coming from the perspective of the composing solutions for subsequent indicators and also from the inability to synthesize very different socio-cultural realities. The answer to these inadequacies was the proposal of adjusting correctors or simple adjusted versions of the two already consecrated indicators: • • • •

Gender-related Development Index, Global Gender Gap Measure, Gender Equity Index, Social Institutions and Gender Index, etc. (Dollar and Gatti 1999b).

What learn from GDI? • Biggest imbalance being characteristic for Greece (in the EU, Greece has the largest multi-year female unemployment and also the most important gap between feminine and masculine unemployment). • Using the correlation techniques, Bye (2012) identifies the forms the longevity differences between men and women become sensitive to the particularities of the social, economic or geographical context. For the countries from Balkan Peninsula, it is noted that if the level of urbanization is higher, women tend to increase their longevity gap compared with the men’s one, as in the case of countries experiencing a balanced distribution of the income, the relations being reverse in countries where the infant mortality is higher than average or where the health system is deficient. • Countries such as Albania or Kosovo, where life expectancy at birth for women is higher than the regional average, are downgraded because of the absence of a longevity difference comparing to men according to the regional average. In the same context, the best-ranked regions will be those which have a higher life expectancy at birth and those where the women live longer, and, as the opposite, the regions with a low life expectancy at birth and where women live less than men (Tudora et al. 2015). Technical Notes—How does Human Development Index Measure? The Human Development Index (HDI) is a summary measure of achievements in three key dimensions of human development: • a long and healthy life, • access to knowledge and a decent standard of living. The HDI is the geometric mean of normalized indices for each of the three dimensions.

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Data sources for Human Development Index Measure Human Development Index Measure consists of following criteria: • Life expectancy at birth: UNDESA (2015) • Expected years of schooling: UNESCO Institute for Statistics (2016), United Nations Children’s Fund (UNICEF) Multiple Indicator Cluster Surveys and ICF Macro Demographic and Health Surveys • Mean years schooling: Barro and Lee (2016), UNESCO Institute for Statistics (2016), UNICEF Multiple Indicator Cluster Surveys and ICF Macro Demographics and Health Surveys • GNI per capita: IMF (2016), UNSD (2016) and World Bank (2016).3

10.5

The Notes from Balkan Area in Gender Equity Index

Technical Note 4. Gender Inequality Index The Gender Inequality Index (GII) reflects gender-based disadvantage in three dimensions—reproductive health, empowerment and the labour market—for as many countries as data of reasonable quality allow. It shows the loss in potential human development due to inequality between female and male achievements in these dimensions. It ranges from 0, where women and men are equal, to 1, where one gender fares as poorly as possible in all measured dimensions. The GII is computed using the association-sensitive inequality measure suggested by Seth (2009), which implies that the index is based on the general mean of general means of different orders—the first aggregation is by a geometric mean across dimensions; these means, calculated separately for women and men, are then aggregated using a harmonic mean across genders (Human Development Report 2016a). Gender inequality remains a major barrier to human development. Girls and women have made major strides since 1990, but they have not yet gained gender equity. The disadvantages facing women and girls are a major source of inequality. All too often, women and girls are discriminated against health, education, political representation, labour market, etc., with negative consequences for the development of their capabilities and their freedom of choice. The GII is an inequality index. It measures gender inequalities in three important aspects of human development— reproductive health, measured by maternal mortality ratio and adolescent birth rates; empowerment, measured by proportion of parliamentary seats occupied by females and proportion of adult females and males aged 25 years and older with at least some secondary education; and economic status, expressed as labour market participation and measured by labour force participation rate of female and male populations aged 15 years and older. The GII is built on the same framework as the IHDI—to better expose differences in the distribution of achievements between 3

http://hdr.undp.org/sites/default/files/hdr2016_technical_notes_0.pdf.

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women and men. It measures the human development costs of gender inequality. Thus, the higher the GII value the more disparities between females and males and the more loss of human development. The GII sheds new light on the position of women in 159 countries; it yields insights in gender gaps in significant areas of human development. The component indicators highlight areas in need of critical policy intervention and it stimulates proactive thinking and public policy to overcome systematic disadvantages of women (Human Development Report 2016b).

10.6

Compulsory Regulations for the Development of Women’s Rights in the Business World

United Nations Global Compact (UNGC) is called as “the world’s largest corporate Sustainability initiative” which invites companies to align strategies and operations with universal principles on human rights, labour, environment and anti-corruption, and take actions that advance societal goals. The UN Global Compact’s Ten Principles are derived from the Universal Declaration of Human Rights, the International Labour Organization’s. Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development and the United Nations Convention Against Corruption (2017). UN Global Compact has also announced 17 “sustainable development goals” (SDGs) which provide a historic opportunity to unite all global stakeholders to end extreme poverty, fight inequality and injustice, and protect our planet. Among these goals, goal five is titled as “Achieve gender equality and empower all women and girls” (2017). Turkey, as a developing country, is trying to catch high-level standards in business by applying international accounting, auditing, taxation, sustainability and gender equity standards. A total of 246 Turkish institutions have signed UN Global Compact and announced that these companies promised to follow principles and goals published by UNGC. Among 246 Turkish institutions, 77 companies are profit companies and 35 of these companies have also signed Women Empowerment Principles (WEP). It is found that 74 companies have invited women as a member in the board. Many studies stated that women existence inboard effect companies performance and accountability. In this study, women existence in board or/and signing WEP has positive effect on sustainability reporting [45].

10.7

Discussion

The purpose of development is to provide a human-oriented progress which emphasizes individual rights and freedoms. If women, who are the most vulnerable portion of the society in regard to reaching individuals’ rights and freedom, become stronger, their ability to participate in employment will increase accordingly. In addition, the fertility

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Fig. 10.2 Gender inequality index

rate and infant deaths will decrease and finally the healthier, well-nourished and educated child population will increase (Yilmazer and Onay 2017). It is necessary for women to be supported in the field of education, health, law and freedom for the healthy development of the society and the more corporate business world. As seen in the work done, women add value to the organizations they are in many ways. However, advancement of women in organizations depends on nine factors: friendships, personal factors, family responsibility, management experience, work and family conflict, mentors and networks, organisational policies and culture, societal factors, training and development (Caliyurt and Farooqi 2017). These conditions should be provided by government- and business-related NGOs. As a result, United Nations Development Programme Human Development Reports Gender Inequality Index4 in Balkan area shows us there is a long way to 4

Gender inequality remains a major barrier to human development. Girls and women have made major strides since 1990, but they have not yet gained gender equity. The disadvantages facing women and girls are a major source of inequality. All too often, women and girls are discriminated against in health, education, political representation, labour market, etc., with negative consequences for development of their capabilities and their freedom of choice. The GII is an inequality index. It measures gender inequalities in three important aspects of human development—reproductive health, measured by maternal mortality ratio and adolescent birth rates; empowerment, measured by proportion of parliamentary seats occupied by females and proportion of adult females and males aged 25 years and older with at least some secondary education; and economic status, expressed as labour market participation and measured by labour force participation rate of female and male populations aged 15 years and older. The GII is built on the same framework as the IHDI—to better expose differences in the distribution of achievements between women and men. It measures the human development costs of gender inequality. Thus, the higher the GII value the more disparities between females and males and the more loss to human development. The GII sheds new light on the position of women in 160 countries; it yields insights in gender gaps in major areas of human development. The component indicators highlight areas in need of critical policy intervention, and it stimulates proactive thinking and public policy to overcome systematic disadvantages of women.

Women Rights for Sustainable Business and Entrepreneurship …

Fig. 10.3 Turkey’s rank in the human development index (HDI)

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Fig. 10.4 Turkey’s rank in gender inequality index. http://hdr.undp.org/en/composite/GII. Accessed May 15, 2019

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run to get better conditions for women in Balkan area however the accuracy of the data is also a very important issue. It is recommended that the Balkan Business Women and Women Academician Initiative Group be established to protect the rights of women in the business world to decrease gender inequality in Balkan Countries (Figs. 10.2, 10.3 and 10.4).

References AGEBİH. (2016). Priority gender issues in Bosnia and Herzegovina, Georgia, Moldova, Serbia, and Ukraine–with consideration to gender and governance. Agency for Gender Equality of Bosnia and Herzegovina. http://www.gsdrc.org/wp-content/uploads/2016/07/HDQ1372.pdf. Accessed on March 18, 2019. Arqimandriti, M., & Llubani, M. (2018). Convention on the elimination of all forms of discrimination against women. Committee on the Elimination of Discrimination against Women Sixty-fourth session. Shadow Report, With a special focus to the applications and implications of the Article 11 in shoes and textile industry in Albania, Albanian NGO’s Shadow Report, Complementing the Albanian Government Reports CEDAW/C/ALB/4 and CEDAW/ALB/Q/4/Add.1 to the CEDAW committee, Gender Alliance for Development Centre Albania June 2016. http://tbinternet.ohchr.org/Treaties/CEDAW/Shared% 20Documents/ALB/INT_CEDAW_NGO_ALB_24256_E.pdf. Accessed March 12, 2018. Bulgaria Population. (2018). http://worldpopulationreview.com/countries/bulgaria-population/. Accessed on March 3, 2018. Bye, S. (2012). Can structural indicators explain gender difference in life expectancy (LE) at birth among WHO member countries? Tromso: Institut for samfunnsmedisin Universitetet i Tromsø. https://ac.els-cdn.com/S2212567115001203/1-s2.0-S2212567115001203-main.pdf?_tid=c383 c006-3bcf-43e5-9ebe-3b9437d582d7&acdnat=1522133874_ce7c96a06108744dd0e6e447dd2 db2cc. Accessed March 3, 2018. Caliyurt, K. T. (2017). Why women are important for sustainable world? Introduction. In Women and Sustainable Business. Women and sustainability in business. United Kingdom: Routledge. Caliyurt, K. (2018). Women Inboards & Effects on Sustainability Reporting: Case from Firms Signed UN Global Compact in Turkey, February 10, 2018. https://papers.ssrn.com/sol3/papers. cfm?abstract_id=3121748. Caliyurt, K., & Farooqi, N. (2017). 8th International Women and Business Conference, July 25– 28, 2017. Sackville, New Brunswick, Canada: Mount Allison University Libraries. ISBN: 978-0-88828-254-5. Caliyurt, K., & Oruç, I. (2016). Women in sustainability reporting: Case from Turkey. In 7th International Women and Business Congress (p. 50). Prizren Ukshin Hoti University, November 9–11, 2016. Djulic, k., & Kuzman, T. (2013). Women On corporate boards in Bosnia And Herzegovina, FYR Macedonia And Serbia. https://openknowledge.worldbank.org/bitstream/handle/10986/26119/ 112580-WP-ECA-Women-on-Boards-2013-PUBLIC.pdf?sequence=1&isAllowed=y. Accessed on March 8, 2019. Dollar, D., & Gatti, R. (1999a). Gender inequality, income and growth: Are good times good for women? Washington: The World Bank, Development Research Group, Mimeo. Dollar, D., & Gatti, R. (1999b) a.g.e. Encyclopedia Britannica. (2018). https://www.britannica.com/place/Balkans. Accessed February 23, 2018. Entrepreneurship Monitor (GEM) 2016/17 Global report released today by Babson College, Universidad Del Desarrollo, and Universiti Tun Abdul Razak. (2018). http://www.yeditepe.

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edu.tr/en/news/global-entrepreneurship-monitor-gem-2016-results-have-been-announced. Accessed on March 9, 2018. European Parliament, STUDY Requested by the FEMM, Committee professional status of rural women in the EU. (2019). http://www.europarl.europa.eu/RegData/etudes/STUD/2019/ 608868/IPOL_STU(2019)608868_EN.pdf. Accessed on March 18, 2019. GEM 2016/17—Special topic report—Women’s entrepreneurship. (2018). http://gemorg.bg/gem2016-17-special-topic-report-women-s-entrepreneurship/. Accessed on March 1, 2018. Gender Alternatives Foundation. (2012). Substantive equality and non-discrimination in Bulgaria. Shadow report submitted to CEDAW Committee for the 52nd Session 2012. http:// genderalternatives.org/images/Shadow_report_GAF_June_2012_Final.pdf. Accessed on March 1, 2018. Gender pay gap in Bulgaria has worsened, but still better than EU average. (2018). https:// sofiaglobe.com/2015/03/05/gender-pay-gap-in-bulgaria-has-worsened-but-still-better-than-euaverage/. Accessed on March 10, 2018. Goal 5. Achieve gender equality and empower all women and girls. (2017). https://www. unglobalcompact.org/sdgs/17-global-goals#sdg5. Accessed on April 6, 2017. http://www.instat.gov.al/en/home.aspx. Human Development Report. (2016a). Human development for everyone. Technical notes calculating the human development indices—Graphical presentation. http://hdr.undp.org/sites/ default/files/hdr2016_technical_notes_0.pdf. Accessed on February 25, 2018. Human Development Report. (2016b). a.g.e. Idžaković, F. (2013). Economic status of women. In Miftari, E. (Ed.), Annexe to the 3rd alternative report on the implementation of CEDAW and women’s human rights in Bosnia and Herzegovina (pp. 9–14). Sarajevo: Sarajevo Open Center. Institute of Statistics of Albania (INSTAT). (2014). Albania in figures 2014. http://www.instat. gov.al/media/3554/albania_in_figures_2014.pdf. Accessed on May 8, 2019. Lacka, S., & Rushani, G. (2016). The political emancipation of Albanian woman in the Republic of Macedonia from 1991 to today. In 7th International Women and Business Congress, November 9–11, 2016. Prizren, Kosova: Prizren Ukshin Hoti University. http://uni-prizren. com/repository/docs/CONFERENCE_PROCEEDING_PRIZREN_443216.pdf. National strategy for promoting the equality between women and men. (2018). http://evaw-globaldatabase.unwomen.org/en/countries/europe/bulgaria/2016/national-strategy-for-promoting-theequality-between-women-and-men. Accessed March 5, 2018. NGO shadow report to the seventh periodic report submitted by Turkey to CEDAW for the 47th Session of CEDAW July 2016, Prepared by KADEM (Women and Democracy Association). (2018). http://kadem.org.tr/wp-content/uploads/2016/09/CEDAW-REPORT-BY-KADEM.pdf. Accessed March 14, 2018. Palalic, R., Ramadani, V., & Dana, L. P. (2017a). Entrepreneurship in Bosnia and Herzegovina: Focus on gender. European Business Review, 29(4), 6. https://doi.org/10.1108/EBR-05-20160071. Palalic, R., et al. (2017b). a.g.e. (p. 10). Palalic, R., et al. (2017c). a.g.e. (p. 18). Petrid, A., Vidovid, G., Hadžid, I., Gačanica, L., Umidevid, Ž., Dardid, D., et al.: Alternative CEDAW report: Report of civil society organizations on implementation of the concluding observations and recommendations of CEDAW committee for Bosnia and herzeGovina 2013– 2017. http://rightsforall.ba/wp-content/uploads/2016/11/CEDAW-Prevod-FINAL.pdf. Accessed on March 15, 2018. Sabotinova, D. (2016a). Making visible the invisible: Women’s unpaid labour. In Women and Sustainable Business. Women and sustainability in business (p. 18). United Kingdom: Routledge. Sabotinova. (2016b). a.g.e. (p. 9). Sawicka, J., & Lagoda, J. (2015). Gender and sustainability in the economic development—Equal chances for women at the labour market. Oeconomia, 14(4), 115–125.

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Seth, S. (2009). Inequality, Interactions, and Human Development. Journal of Human Development and Capabilities, 10(3), 375–96. The gender pay gap Bulgaria. (2018). http://ipmmp.um.si/wp-content/uploads/2017/09/GEM_ Womens-2016_2017_Report_v10.pdf. Accessed on March 9, 2018. The ten principles of the UN global compact. (2017). https://www.unglobalcompact.org/what-isgc/mission/principles. Accessed on April 6, 2017. Tudora, D., Banica, A., & Istrate, M. (2015). Evaluation of gender disparities from the Balkan countries. In 7th International Conference on Globalization and Higher Education in Economics and Business Administration. https://sci-hub.tw/https://doi.org/10.1016/S22125671(15)00120-3. TURKEY: Shadow report summary for the 64th pre-sessional working group of the committee on the elimination of all forms of discrimination against women submitted by the Executive Committee for NGO forum on CEDAW-Turkey12015. (2018). http://tbinternet.ohchr.org/ Treaties/CEDAW/Shared%20Documents/TUR/INT_CEDAW_NGO_TUR_21871_E.pdf. Accessed March 6, 2018. UNITED NATIONS DEVELOPMENT PROGRAMME, Life expectancy at birth (2015). http:// hdr.undp.org/en/69206. Accessed on March 20, 2019. UNITED NATIONS DEVELOPMENT PROGRAMME, IMF. (2016). Technical notes Calculating the human development indices—graphical presentation. http://hdr.undp.org/ sites/default/files/hdr2016_technical_notes_0.pdf. Accessed on March 20, 2019. UNITED NATIONS DEVELOPMENT PROGRAMME, UNSD. (2016). Technical notes Calculating the human development indices—graphical presentation. http://hdr.undp.org/ sites/default/files/hdr2016_technical_notes_0.pdf. Accessed on March 20, 2019. UNITED NATIONS DEVELOPMENT PROGRAMME, Worldbank. (2016). Technical notes Calculating the human development indices—graphical presentation. http://hdr.undp.org/sites/ default/files/hdr2016_technical_notes_0.pdf. Accessed on March 20, 2019. UNITED NATIONS DEVELOPMENT PROGRAMME, Expected years of schooling (of children). (2016). http://uis.unesco.org/. Accessed on March 20, 2019. UNITED NATIONS DEVELOPMENT PROGRAMME, Mean years of schooling (males aged 25 years and above). (2016). http://hdr.undp.org/en/content/mean-years-schooling-males-aged-25years-and-above-years. Accessed on March 20, 2019. United Nations, women, facts and figures: Economic empowerment, benefits of economic empowerment. (2018). http://www.unwomen.org/en/what-we-do/economic-empowerment/ facts-and-figuresdo/economic-empowerment/facts-and-figures. Accessed on February 3, 2018. UN Women presents gender review of key laws to Turkish Parliament. (2018). http://eca. unwomen.org/en/news/stories/2016/05/un-women-presents-gender-review-of-key-laws-toturkish-parliament. Accessed on March 9, 2018. Yilmazer, M., & Onay, M. (2017). A different view of women’s employment: The case of Turkey and Germany. In Women and Sustainable Business. Women and sustainability in business (p. 43). United Kingdom: Routledge.

Prof. Dr. Kıymet Tunca Çalıyurt CPA, CFE, graduated from the Faculty of Business Administration at Marmara University, Istanbul, Turkey. Her master’s and Ph.D. degrees are in Accounting and Finance Programme from the Social Graduate School, Marmara University. She has worked as Auditor in Horwath Auditing Company, Manager in McDonalds and finance staff in Singapore Airlines. After vast experience in private sector, she has started to work in academia. She is holding CFE and CPE titles. Her research interests are in accounting, auditing, fraud, social responsibility, corporate governance, finance and business ethics, with a special interest in aviation management, NGOs, women rights in business. She has been as visiting researcher in Massachusetts University Amherst Business School. She is the founder of the International Group on Governance, Fraud, Ethics and Social Responsibility (IGonGFE&SR) which was founded in 2009. In 2009, she also founded the International Women and Business Group, which

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organizes global, annual conferences. Kiymet has published papers, book chapters and books both nationally and internationally on fraud, social responsibility, ethics in accounting/finance/aviation disciplines in Springer and Routledge. She is book series editor in Springer with the title Accounting, Finance, Sustainability, Governance and Fraud: Theory and Application, and book series editor in Routledge with the title Women and Sustainable Business. Some book titles: Emerging Fraud (with Sam Idowu), Corporate Governance: An International Perspective (with Sam Idowu), Women and Sustainability in Business: A Global Perspective, Sustainability and Management: An International Perspective (with Ulku Yuksel), Globalization and Social Responsibility (with David Crowther), Regulations and Applications of Ethics in Business Practice (with Dr. Jiang Bian), Ethics and Sustainability in Accounting and Finance, Volume I. She is acting as member in editorial board Journal of Financial Crime, Social Responsibility Journal, International Journal on Law and Management, Journal of Money Laundering Control. She is regular speaker at International Economic Crime Symposium in Jesus College, Cambridge University. She is member in editorial board Social Responsibility Journal, Journal of Financial Crime, International Journal of Law and Management. She is partner of Herme Consulting in Trakya University Technopark.

Chapter 11

The Relationship of Public Banks in Turkey with Sustainable Macroeconomic Factors Başak Oktay Akın and Enver Erdinç Dinçsoy

Abstract Public banks in Turkey importantly took a part in providing supervision, balancing the commercial affairs and developing the industry to prevent economic problems after The Great Depression in 1929. Newly, for sustainability-focused growth, public banks should possess financial policies to support the real sector by covering of financial needs of municipalities, public institutions, SMEs, tradesmen, and corporate firms. Also, for a functionally sustainable macroeconomic structure, public banks should bring fluidity to the financial system structurally, manage a rational physical asset, transform short-term funds to long-term funds, create deposit money, develop trade, and especially contribute to the distribution of income. In this point, governments can make some interventions on the economy by using public banks. Therefore, macroeconomic structure supported by the public banks has vital importance from many aspects such as budget, financial system, the balance of payments and borrowing, interest rates and financial markets, and employment resulting in the development of the country and establishing a sustainable growth path. Keywords Banking sector


Sustainability
Macroeconomics

This study was produced from the post-graduate thesis titled “The Place and The Importance of Public Banks in Turkish Economy” conducted by Başak Oktay Akın in Trakya University, Institution of Social Sciences, under the supervision of Inst. Dr. Enver Erdinç Dinçsoy. B. O. Akın Department of Banking and Insurance, Keşan Yusuf Çapraz School of Applied Sciences, Trakya University, Edirne, Turkey e-mail: [email protected] E. E. Dinçsoy (&) Department of Banking, School of Applied Sciences, Trakya University, Edirne, Turkey e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability, Volume I, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_11

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B. O. Akın and E. E. Dinçsoy

Introduction

Although it was decided to establish national banks in order to support private sector in İzmir Economic Congress, Turkey (Koç 2000: 156) at first, public banks were established in order to prevent economic disruptions after the 1929 crisis, to provide supervision, order and balance in commercial affairs and to develop industry. Another reason of establishing public banks is that they can provide funds to investors with a more convenient price than other banks. The effect of government on banks has also provided development for banking sector and economic system. With the authorization of using, minting and supervising tools such as money, currency, and valuable paper etc. the principle of etatism has risen. Establishing public banks is also a significant step for laying the foundations of national banks. Furthermore, while private banks cannot open branches all around the country since it is costly, public banks can open branches even in smallest settlements (Rezvanian et al. 2008: 704). Public banks, which try to reach the people as much as possible, being able to provide funds with low cost and present term loans with low interest carry out a significant financial function (Alam et al. 2011: 56). In this chapter, the relationship of public banks in Turkey with sustainable macroeconomic factors will be discussed under.

11.2

The Place of Public Banks in the Sector

The government also performs certain interventions on public banks for several purposes. These purposes are briefly; to increase the reliability and strength of financial system (Patrick 1966: 176), to prevent the market failures that may occur due to asymmetric and costly information, to finance projects that are important in terms of society although they do not possess profitability and to provide banking services even in hard-to-reach areas to provide financial development (Micco et al. 2004: 6). Executing these purposes by government is vital in terms of the development of the country and a sustainable macroeconomic growth movement. Public-owned banks have earned the trust of people with government support that has been coming from the early years of the foundation of Republic up until now and acquired advantage against private-owned banks in many ways. However, these banks that experience various innovations, have faced situations such as transfer, merging and bankruptcy from time to time. As shown in Table 11.1, 51 deposit banks in 1960 have increased to 56 in 1990 and to 61 in 2000, reaching its highest level. After 2000, the number started to decrease again. Shortly, although banks demonstrate a significant increase after 1985, they cannot carry on service by staying in the sector for long years. Besides there are 34 deposit banks today, only 3 of them are public-owned banks. Since 1960, public-owned banks could not be more than 14. Especially in 1985, the introduction of many banks to the sector did not influence public-owned banks, on

1965

1970

1975

1980

Deposit banks 51 46 44 40 40 Public-owned 14 12 12 12 12 Private-owned 20 23 22 23 24 Foreign-owned 5 5 5 5 4 Banks that are – – – – – transferred to savings deposit insurance fund Development and 0 2 2 2 3 investment banks Participation banks – – – – – Source https://www.tbb.org.tr/en/research-and-publications/research/17

1960

Table 11.1 Number of banks in Turkey according to their types

56 8 25 23 –

10 –

3 –

1990

47 12 20 15 –

1985

–

13

55 5 32 18 –

1995

–

18

61 4 28 18 11

2000

4

13

34 3 17 13 1

2005

4

13

32 3 11 17 1

2010

5

13

34 3 9 21 1

2015

5

13

34 3 9 21 1

2016

5

13

34 3 9 21 1

2017 (March)

11 The Relationship of Public Banks in Turkey with Sustainable … 195

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the contrary their numbers are reduced. Private-owned banks however, did not experience a significant change until 1990, reached the highest number in 1995 and decreased to a number of 9 in time. Foreign-owned banks of which there were only 5 of them in the early years, have continued to increase in number with the change in 1985 and the increase in the entrance of foreign capital to the country. Foreignowned banks have the highest number among deposit banks. Although development and investment banks did not carry much service in the early years, they had become more active after 1990 and have been keeping their seat in the sector since 2005. Investment banks could not carry out service until 2005 and these banks which have become 4 in number in that year, are still active today. To evaluate generally, the number of banks which was 51 in the early years of banking business, has shown changes in time. It has experienced the biggest increase in 2000 and has fallen to 52 in number by showing changes again. Developing countries can support the growth by transferring the limited funds to the sectors that can provide economic growth by loan. Banks electively provide loans to the strong businesses, thus, they can provide increase in the event of the conversion of funds, per capita income and growth rates. As shown in Table 11.2, it can be observed that the share of public banks have increased in total loan volume. This increase is an indicator that the public banks have carried out a significant financial function in terms of Turkish economy. Furthermore, according to CBTR data (Table 11.3), the share of general deposit volume of 3 (three) public banks, Ziraat Bank, Halkbank and Vakıfbank, has increased up to 38% in April 2018. Turkey Wealth Fund was established in August 26, 2016 by being announced in Official Gazette. Some of the public organizations and some immovables were transferred to this fund.1 Wealth Fund aims long-term investments to be made with low interest environment. Furthermore, it is aimed to create a system that contributes to the growth. After all, it is expected to strengthen funds by putting forward public property and develop in economy.

11.3

Public-Owned Banks and Budget Relationship

Governments can make some interventions on economy by using public banks. Since public banks have duties such as stabilizing the economic balance, they carry out tasks that are given by the government. Economic intervention can be carried out in 3 different ways; directed loan, reduced (subsidized) loans and warranties (Okutan 2010: 202). Governments control banks and other institutions in order to provide profit such as employment, subvention for their supporters (Sitorus and Srinivas 2004: 3). Furthermore, they can lead customers such as farmers, public institutions etc. for

1

Publicly owned shares and some immovables of Ziraat Bank and Halkbank were transferred to Wealth Fund. The process about the transfer of Vakıfbank is in progress.

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Table 11.2 Loan volumes in Turkish banking sector (in thousands)

Year

Public banks

Banking sector

Ratio (%)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 April

30,791,043.00 43,203,134.00 56,221,420.00 73,904,750.00 89,121,080.00 131,215,641.00 169,423,852.00 189,617,429.00 264,707,344.00 319,439,801.00 402,770,228.00 492,772,822.00 632,005,946.00 728,267,942.00

137,229,568.00 192,070,142.00 242,927,249.00 302,010,858.00 335,210,049.00 483,818,493.00 639,126,816.00 759,762,194.00 1,018,735,495.00 1,209,005,135.00 1,452,160,856.00 1,686,908,873.00 2,045,329,483.00 2,283,353,775.00

22 22 23 24 27 27 27 25 26 26 28 29 31 32

Table 11.3 Deposit volumes in Turkish banking sector (in thousands)

Year

Public banks

Banking sector

Ratio (%)

2012 2013 2014 2015 2016 2017 2018 Nisan

182,811,129.00 215,391,989.00 229,241,064.00 259,701,266.00 302,834,417.00 354,942,265.00 378,918,378.00

505,680,036.00 592,817,263.00 655,831,096.00 705,882,250.00 834,832,668.00 943,429,943.00 993,972,449.00

36 36 35 37 36 38 38

loans to be used in fields such as road, substructure and superstructure. Thus, by providing fund flow to the needed fields, funds can be obtained. Governments can give loan with low interest rates in order to protect domestic producers and can protect the consumer by keeping the price of much consumed goods low. Hence, it is aimed to reach a strong level in international arena by supporting production. The cost that emerges as a result of using loans that are under the interest rates from banks is tried to be reduced by making other customers to use loans that are above the interest rates. Directed loan and subsidized loan are provided by the government in cases where the customer is not reliable or when the interest rate is applied lower than the interest rate on the market. Since the warranties will be compensated by the government if the obligations are not fulfilled, it does not possess any risk. If public banks experience a situation where they may have difficulty in repayment as a result of these risks, they undergo restructure or liquidation.

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Because of some conditions that public banks ignore while performing banking activities, they may create problems on economy. Public banks that give loan to a person or institutions that might have difficulty in repayment with the effect of directed loans, increase the non-performing loans and this situation causes significant problems on budget by increasing the debts of the bank.

11.4

Public-Owned Banks, Growth and the Relationship of Financial System

The place of public banks is extremely important in financial system with features such as gathering savings, managing investments, shaping the sector with various innovations and knowing the investors better in time and many researches were conducted about their roles in economic developments. Generally, banks have two opinions about government ownership; these are growth and political opinions. In countries with financial system where growth is expected, a positive progress was not observed for private banks which play the role of improvement by directing the fund to the productive sector, hence governments have taken steps to carry out the role of development banks with gathering savings by interfering banks and directing them to strategic, long-term projects (Otchere 2005: 3). Governments use public banks as a tool to execute their political objectives. Politicians provide employment and subvention to their supporters in exchange for their support and votes. According to this view, research reservation policies that emerge as a result of governments’ taking banks to their ownership will slow down the financial development. In banking sector, unlike other sectors of the economy, the relationship between the interaction in terms of competition and financial stability should be measured well, while performing competition policy. Big competition (static) might be good for productivity, but it may result in negative for financial stability (Allen and Gale 2004: 453). The financial stability might increase if the competition between the banks will decrease, but the possibility of reduction in wealth emerges. Financial stability is effective in the transfer of resources between the saver in economy and producer. In the case of active performing of financial system, risks are distributed equally and it causes financial system to be desensitized against unexpected situations. Since crisis environment prevents production, there will be a reduction in production. Public banks in our country were established in order to enhance the economy structurally, which was negatively affected by 1929 crisis. The government aimed to interfere the economy more easily by using public banks as a tool and to play a more active role in the economy with the policies it will implement. Since the activity of public banks is slightly low compared to private banks, competitive environment could not be established. Furthermore, because of the possibilities and privileges provided to public banks, they have surpassed private banks in some situations. Investors prefer public banks more, thinking that

11

The Relationship of Public Banks in Turkey with Sustainable …

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government provides warranty and for this reason public banks which have a wide customer portfolio acquire more funds compared to private banks. Possibilities that are provided for public banks which allow customers to obtain high-income with low costs have also reduced the competitiveness of private banks and prevented them to be active within economic system. In his study, Yaşa (2008) mentioned data measurement analysis in Turkish banking system between 2002 and 2004. 21 banks, 3 of them public banks, were analyzed. As a result of the analysis, it was found that the most important factor in determining the activity of banks in the sector is their size of assets. According to another result, public banks acquired closer activity2 values than private banks. According to Beck and Levine (2004), there is a direct relationship between banking sector and growth. In the panel analysis study conducted for 40 countries, covering the years 1976–1998, the development of banking sector was evaluated with the loans provided to private sector and a positive development was determined in long-term. In their study, Aslan and Küçükaksoy analyzed economic growth and financial development for each year. Causality relationship was examined for the years between 1970 and 2004 and the Vector Autoregression (VAR) Granger model was applied. As a result of the study, it was concluded that financial development in Turkey affects growth or causes growth.

11.5

Public-Owned Banks, Balance of Payments and Borrowing Relationship

Towards the end of 1980’s, liberating capital mobility has made transnational borrowing common. This situation has shown increase in 1990’s with the growth in the countries’ need of source and loan demands with each other. Countries provide financing through borrowing. Especially, underdeveloped countries prefer borrowing from foreign countries in order to sustain their economy since they cannot perform savings. Developing countries prefer external borrowing since their own savings are inadequate. Developed countries should increase their share in economic development by increasing production instead of reducing consumption (Gündüz and Dinçsoy 2016: 220). Governments should support subjects such as increasing employment, developing infrastructure projects, supporting big projects, education, transportation and health as a priority (Karagöz 2002: 99). However, while executing these, since they require a certain source, they are obliged to prefer external borrowing. As long as this borrowing is not excessive, it can contribute to the economies of developing countries.

2

At the same time, activity concept is determined according to inputs (number of branches, number of staff) and outputs (interest income, investments) which were discussed in the study.

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Since developing countries cannot provide enough savings, they balance deficits emerging from current accounts with external borrowing. As long as the foreign trade deficit which is the basic cause of current deficit is not narrowed, there won’t be any recovery in the amount of external debt. For this, export strategy can be improved by increasing the domestic production and if the country’s sources are used effectively, foreign dependency would be reduced and balance of payments process healthily. As well as budget deficits are not seen commonly in developed countries, having low external debt does not affect the budget in the process of paying the debt. Along with this, factors such as capital inflow to the country, increase in exports, and adequacy of foreign currency reserve are effective in the protection of balance of payments. In our country external borrowing is usually preferred in order to narrow the deficit in the balance of payments or to pay the debts, however this situation have emerged the condition of not being able to pay the debts. When the data for the last 5 years is examined (Table 11.4); Although there is a decrease in the amount of loans that are used from IMF since 2012, total external debt has increased over the last 5 years. According to TSI data, only Turkey does not possess external debt among OECD countries in 2016. While our external debt is sustainable in short term, it does not demonstrate a very strong structure in the long term. For this reason, giving importance to the subjects such as export policies, domestic savings, reducing imported goods and domestic production will be able to balance debts.

11.6

Public-Owned Banks, Interest Rates and Financial Market Relationship

Since public banks are in competition with other banks in the sector, they gain some advantages. Interest rates alteration, which is one these advantages, have provided them an advantage by increasing the share of public banks in the market. Along with this, since public banks gather official deposit with low interest rates, they can gather sources with lower cost compared to private sector banks.

Table 11.4 External debt and loan usage (million USD) Year

Total external debt

Long term external debt

2012 339,561.9 239,406.9 2013 389,765.5 259,474.5 2014 401,811.1 270,246.1 2015 396,083.1 294,206.1 2016 404,459.5 306,457.5 Source http://www.tuik.gov.tr/UstMenu.do?metod=istgosterge

Debt received from IMF 2338.4 1476.8 1388.8 1330.4 1289

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The Relationship of Public Banks in Turkey with Sustainable …

201

Since public banks do not have to worry about loss-making and can transfer their losses to the Treasury cyclically, they did not abstain from giving deposits with high interest rates. Against this situation, private-owned banks also increase their interest rates in order not to lose the funds they have. Hence, banks in the system can increase their interest rates successively. In the case of experiencing liquidity shortage of public banks, money market interest rates increase as well as deposit interests. Since private banks struggle in bearing the cost of high interest rates, they cannot demonstrate much activity in the system. Financial markets are the markets that provide transfer of funds from those who have fund surplus to those who have funding gap with financial intermediary (Mishkin 2007: 23). Financial tools and financial institutions in this mechanism help the system to operate effective and healthy. Banks which are important factors in the effective usage of funds in the financial system contribute to the economy greatly. Investors who have fund surplus want to make good use of their investments in banks and banks will give these funds to those who need them, thus, idle funds will be evaluated. In financial system, fund transfer is conducted through two ways, indirectly and directly. In indirect finance, fund offerors transfer their funds to fund requesters through financial intermediaries. These funds consist of deposit and loans in general. In direct finance, on the other hand, fund offerors can give their funds to those who request their funds without intermediaries. Tools that are used in direct finance consist of capital market tools (bonds and stocks). Because of the competition between the banks that are in the lead in deposit and loan departments, some imbalances may occur in the system. For example, while there are various practices such as the size of the deposit and interest rate while raising fund, raising deposit with a single interest rate strategy in public banks can be observed. This situation causes investors to prefer public banks instead of private banks, hence public banks to profit at the end of the year. Swap contracts used by public banks increase the profitability of both banks and customers. Swap contracts are contracts in which the bank and investor changes the asset in the type of currency with the interest applied on the asset or the responsible in a given period. Hence, the risks that emerge with the changes in interest and foreign exchange can be reduced. Investors prefer these financial tools in order to make more profitable moves with less risk. Possessing various precedence of public banks have become very important for investors. They have created perception of trust because they are public banks and their profitability have increased as much. Public banks which are one of the basic structures of financial system contribute greatly to the operation of the system and to the economy.

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Public-Owned Banks and Employment Relationship

Among the founding purposes of public banks, there are many elements different from private banks such as employment creation, contributing to the economy and to the financial requirements of the government. Employment creation, which is one of these purposes, have caused excessive employment with the increase in the number of public banks’ branches and further this situation caused decrease in quality and increase in expenses (Marston and ve Narain 2004) Public banks which were aimed to be used as a tool to increase employment by the state, have faced the increase in the expenses. However, banks’ increasing employment and their increased activity as a result of the confidence they acquire may create some imbalances in banking sector. There hasn’t been a change in the number of public banks since 2010. But when Fig. 11.1 is examined, there has been a significant change in the number of branches of public banks since 2012. The increase in the employee after 2014 is remarkable as well (Table 11.5). The number of employees is significantly higher than other banks. According to UMT data, average employee number in banks is higher in public-owned banks than private-owned banks between the years 1966 and 2016. With the increase of 3838 people between 1981 and 1986, the number of employees working in public-owned banks has passed 9000. When private-owned banks are observed, they demonstrate an increase of 193 people in the same period and come to a number of 2736 employees. The other significant increase in public banks was seen between 1996 and 2001, but a decrease of approximately 5629 people is observed after the 2001 crisis. Finally, the average number of employees working in public-owned banks has reached more than twice of the employees working in private-owned banks in the year 2016.

11.8

Result

It is possible to sort banking sector according to various factors such as structural features, economic features, activity fields and capital structure. In general, banks can be classified into two, according to their capital structures as “deposit banks” and “development and investment banks”. It is also possible to sort them according to the capital resources as national capital banks and foreign capital banks. Furthermore, banks that are established with both domestic and foreign capital can be added to this classification. Banks that are established within the borders of Turkey and of which all of their capital was paid with domestic money are named as national-owned banks. These banks split up to three within themselves: Public-Owned Banks,3 Private-Owned 3

Banks of which their capital is covered by treasury on behalf of the public or statutory bodies.

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Fig. 11.1 Average number of employees per bank. Source https://www.tbb.org.tr/Content/ Upload/Dokuman/7349/TBB_sube_personel_bilgi_notu_100316.pdf

Table 11.5 Branch and staff information of public banks Numbers of

2010

2011

2012

2013

2014

2015

2016

Banks 3 3 3 3 3 3 3 Branch 2679 2894 3058 3329 3456 3647 3699 Personnel 47,128 49,218 50,914 53,647 53,793 57,475 57,509 Source https://www.tbb.org.tr/modules/banka-bilgileri/banka_sube_bilgileri.asp

2017 3 3697 58,330

Banks4 and Mixed-Owned Banks.5 On the other hand, location of banks of which all of their capital is covered by foreign person and institutions are usually outside of Turkey and these banks can open branches in Turkey if they want. There is also Central Bank which was established in order to help to provide the stability and the development in the economy by using various money policy tools, do not seek profit and has the authority of all kinds of supervision and management. If public-owned banks were evaluated specifically in Turkey, they have gained the trust of the public with the support of the government from the foundation years of the Republic up until now and acquired advantage against private banks in many aspects. However, duty losses of public banks was liquidated as a result of restructuring them with the purpose of privatization at the early years of 2000, more caution was exercised in crediting activities and significant savings were provided in their expenses. Today,6 public banks should find funds that have lower cost than foreign markets, support growth and would contribute to the development.

4

Banks which was established by private person or institutions, not by public capital. Banks of which some of their capital is covered by the government and some of them by legal entities. 6 Publicly owned shares and some immovables of Ziraat Bank and Halkbank were transferred to Wealth Fund. The process about the transfer of Vakıfbank is in progress. 5

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Furthermore, public banks play an active role in the covering of financial needs of municipalities, public institutions and organizations, SMEs, tradesmen and corporate firms under favorable conditions and in the finance of big projects. On the other hand, public banks give a significant support to the construction sector which is the locomotive of Turkish economy and mainly give credits to this sector. However, for sustainability-focused growth they should possess the possibility of marketing financial products in a wide range for policies that support the real sector, take important steps towards source diversity and increase the share of deposits. For a functionally sustainable macroeconomic structure to emerge, public banks should bring fluidity to the financial system structurally, manage rational physical asset, transform short-term funds to long-term funds, create deposit money, develop trade and especially contribute to the fair distribution of income. As a result, while public deposit banks provide people to gain interest income from their savings on the one hand, they also carry out a significant function in terms of financial markets by providing fund flow. However, for public banks to contribute to a sustainable growth environment in Turkey, they should possess strong capital base and balanced structure. In order to keep pace with global competitive environment with the developing technology and the increasingly difficult economic conditions, public banks should expand their service opportunities in areas where financial system is in need of as well as accepting deposits and giving loans.

References Alam, H. M., Raza, A., & Akram, M. (2011). A financial performance comparison of public vs private banks: The case of commercial banking sector of Pakistan. International Journal of Business and Social Science, 2(11), 56–64. Allen, F., & Gale, D. (2004). Competition and financial stability. Journal of Money, Credit, and Banking, 36(3–2), 453–480. Beck, T., & Levine, R. (2004). Stock market, banks and growth: Panel evidence. Journal of Banking & Finance, 28(3), 25–38. Gündüz, S., & Dinçsoy, E. E. (2016). İhracatın Finansmanında Eximbank’ın Rolü ve Performans Analizi. Akademik Sosyal Araştırmalar Dergisi, 22, 218–228. Karagöz, K. (2002). Türkiye’de Dış Borçlanmanın Nedenleri - Ekonometrik Bir Değerlendirme. Sayıştay Dergisi, 66(67), 99–110. Koç, C. (2000). İzmir İktisat Kongresi’nin Türk Ekonomisinin Oluşumuna Etkileri. Atatürk Dergisi, 3(1), 145–167. Marston, D., ve Narain, A. (2004). Painting the SFI landscape, observations from a survey of state-owned financial institutions. In Conference on The Role of State-Owned Financial Institutions: Policy and Practice. Washington D.C.: World Bank. Micco, A., Yeyati L. E., & Panizza, U. (2004). Should the government be in the banking business? The role of state-owned and development banks. Inter-American Development Bank Çalışma Tebliği. Mishkin, F. S. (2007). The economics of money banking and financial markets (8th ed.). USA: The Addison-Wesley.

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Okutan, M. (2010). Bütçenin İç Borçlanma ve Finansmanının Bankacılık Sektörü Üzerinde Etkileri [Dokuz Eylül Üniversitesi Sosyal Bilimler Enstitüsü Maliye Ana Bilim Dalı Maliye Programı Doktoru Tezi]. Otchere, I. (2005). Do privatized banks in middle- and low-income countries perform better than rival banks? An intra-industry analysis of bank privatization. Journal of Banking & Finance, 29(8–9), 2067–2093. Patrick, H. T. (1966). Financial development and economic growth in underdeveloped countries. Economic development and Cultural change, 14(2), 174–189. Rezvanian, R., Rao, N., & Mehdian, S. M. (2008). Efficiency change, technological progress and productivity growth of private, public and foreign banks in India: Evidence from the post-liberalization era. Applied Financial Economics, 18(9), 701–713. Sitorus, D., & Srinivas, P. S. (2004). The role of state owned banks in Indonesia. In Conference on The Role of State-Owned Financial Institutions: Policy and Practice. Washington D.C.: The World Bank. Yaşa, A. (2008). Bankacılık sektöründe etkinlik ve veri zarflama analizi yöntemi ile ölçülmesi [Ankara Üniversitesi İşletme Anabilim Dalı Yüksek Lisans Tezi], Ankara.

Banking Sector Number of Branches and Personnel Information Note https://www.tbb.org.tr/Content/Upload/Dokuman/7349/TBB_sube_personel_bilgi_notu_100316. pdf. Accessed May 15, 2019. https://www.tbb.org.tr/modules/banka-bilgileri/banka_sube_bilgileri.asp. Accessed May 15, 2019.

Research and Publications, The Bank Association of Turkey https://www.tbb.org.tr/en/research-and-publications/research/17. Accessed May 15, 2019.

Turkish Statistical Institute http://www.tuik.gov.tr/UstMenu.do?metod=istgosterge. Accessed May 15, 2019.

Başak Oktay Akın has completed her B.A. degree at Department of Banking and Insurance, Keşan Yusuf Çapraz School of Applied Sciences, Trakya University in 2014 and M.A. degree at Department of Banking, School of Applied Sciences, Trakya University in 2018. As the research area, she has focused on banking, insurance, and financial analysis. Additionally, she has some scientific papers and presentations in her research field. She has also some certificates on Capital Markets Licensing Level-3, Recruitment Strategies in Banking, Customer Relationship Management, FX Technical Analysis Training, and Marketing and Sales Management, and working experiences on automotive finance, insurance, and direct sales.

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Enver Erdinç Dinçsoy is an assistant professor at the Department of Banking, School of Applied Sciences, Trakya University. He completed his undergraduate degree at Karadeniz Technical University, Faculty of Economics and Administrative Sciences, Department of Business Administration. He completed his master and doctoral degree in Graduate School of Environmental Science and Technology, Okayama University, Japan. As the research area, he has focused on development, banking and finance, spatial analysis, and environmental economics and policies. In these areas, he has scientific articles published in various national and international journals, books and book chapters, and conferences. He gives undergraduate and postgraduate courses within the scope of his research subjects and proficiency. He has also been the Director of College of Uzunköprü Applies Sciences since 2017.

Chapter 12

Cultural Profiles and Assertiveness of Women in Bulgarian Business Environment Milen Baltov and Diana Sabotinova Mladenova

Abstract Professional women today face competing expectations. As professionals, many are expected to behave assertively and effectively in their relationships with others in their organizations. Yet, perhaps unconsciously, our culture still expects them to behave as the gentler, more supportive and more cooperative gender. Each woman has a unique personality, and some might genuinely have those gentler, more cooperative traits expected by our culture, while others might not. It is important that women remain true to their nature while meeting both cultural and organizational expectations. Keywords Cultural profiles

12.1


Assertiveness of women

Introduction

The impact of culture was explored substantially by Hofstede who identified a number of key dimensions which could determine not only people‘s behaviour, perceptions and values, but also the subsequent impact on organisational life and the economy. Hofstede’s research identified four dimensions of culture that can be used to compare cultures. Hofstede has also written articles about the implications of cultural differences for management. You may wish to explore issues relating to the HR function such as how recruitment and selection processes may be affected by local cultures, the concept of promotion and reward and how individualism links to organisational design. Objective recruitment may not recognise social networks or indeed religious or sex differences. Effective international HRM requires appropriate depth of understanding and insight into how cultures tend to differ from country to country. This includes the constituents of culture and the management of cultural differences and behaviours, the impact of societal norms and values, attitudes towards work, career orientation M. Baltov (&)
D. S. Mladenova Burgas Free University, Burgas, Bulgaria e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability, Volume I, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_12

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and the employment relationship and cultural differences in the regulation of the employment contract. As the sixth glass-ceiling index of the economist shows, disparity between countries remains wide. But women have made some progress towards equality in the workplace in the past year. The index ranks the best and worst countries for a working woman. Each score is based on average performance in ten indicators: educational attainment, labour market attachment, pay, childcare costs, maternity and paternity rights, business school applications and representation in senior jobs (in managerial positions on company boards and in Parliament). Employment rates in the EU continue to improve in line with continued growth and improved labour market conditions. The employment rate for people aged 20–64 reached the highest rate ever recorded—72.2% in 2017. Even if employment rate for women also reached it all time high, gender inequality persists on the labour market. With the employment rate for men at 77.9% as compared to 66.4% for women in 2017, the gender employment gap stood at 11.5% points the same figure for the last three years (Fig. 12.1). At the same time, increasing the employment rate of women aged 30–54 and 55–64 is considered to be a solution for a number of Member States in reaching the overall 75% employment rate target by 2020, as it seems to have the highest potential impact on the overall national employment rate in those countries.1 Partly, it could be explained by the extended age for retirement for the women, that is the case in Bulgaria, and with the general all times boom in the employment in the developed countries. Much of the employment is in the services sectors now, and that’s an extra opportunity for lowering the barriers for employing women. Equality-conscious Nordics typically do well while workplace parity for women in Japan, South Korea and Turkey still lags badly. America under President Donald Trump rose from 20th to 19th place thanks in part to a higher female labour force participation rate. Sweden ranks first, scoring well in female labour force participation, which is over 80%, and the share of women in Parliament (44%). Women broadly lifted their presence in the workplace. There has been an increase in the share of women in the labour force, with a tertiary education and of those taking business school entrance exams, which are a pipeline for senior executive jobs. Yet advances may be slower than anticipated. MSCI, a financial data firm, has pushed back its estimate by a year to 2028 for when the global share of women on boards will hit 30% (the figure is now 17.3%). Countries at the bottom of our index show signs of change in cultural attitudes. Last year, the Global Summit of Women, a business and economic gathering of over 1300 leaders from 60-odd countries was held in Japan for the first time. The #MeToo movement, a social media campaign against sexual assault and harassment, arrived in South Korea with fervour.

1

9 Key messages to accompany the Annual Employment Performance Report and Employment Performance Monitor, Doc. 12690/18, available at: https://www.consilium.europa.eu/register/en/ content/int?lang=EN&typ=ADV

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Fig. 12.1 EU-28 trends in employment rates, people aged 20–64, by gender [%]

Allegations of inappropriate behaviour against senior prosecutors, chaebol owners and board members there have since come to light as more women are feeling empowered.

12.2

Gender Equality in Bulgarian Business Environment

12.2.1 General Participation of Women in the Labour Market in 2016 Female participation in the labour market is on the rise in Bulgaria. In 2016, the employment rate of women (age 15–64) in Bulgaria was 60.0%. It increased by 3.7 pp between 2012 and 2016. However, women still do not participate in the Bulgarian labour market to the same degree as men (66.7%). The difference between the male and female employment rate was 6.7 pp in 2016. Female unemployment in Bulgaria was 7% in 2016. The unemployment rate for men (8.2%) was higher than for women. In addition to that, it is noteworthy that the situation considerably improved for both genders since 2012: Unemployment rates decreased by 3.9% for women and by 5.5% for men. Overall, the general participation rate of Bulgarian women in the labour market has decreased by 2.6 pp since 2012 and was at 64.6% in 2016.

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12.2.2 Part-Time Segregation Part-time employment plays a minor role in the Bulgarian labour market. No more than 1.9% of Bulgaria’s employees worked part time in 2016. Also, there is no significant gender gap between women and men when it comes to part-time employment. It can be said that women tend to work full time or not at all. The numbers underline the predominant model of full-time work. Good care infrastructure considerably facilitates women’s engagement in paid work. The 2017 Commission initiative on worklife balance underlines its importance for both children and other dependents. In May 2018, the Commission adopted a report on the Barcelona objectives.2 The report shows that there has been further improvement since 2013 on the share of children under mandatory school age being in childcare, but that some countries continue to seriously lag behind. On average, in the EU-28, the target of 33% has been reached for children under the age of three and the target of 90% has nearly been reached for children from three until mandatory school-going age (Fig. 12.2).

12.2.3 Qualification Level and Choice of Education Secondary and tertiary education attainment of Bulgarian men and women rose in the last decade. With regards to tertiary education, however, the data suggest that Bulgarian men lag behind in the rapid growth of attainment rates in Europe. With regard to women‘s fields of study in Bulgaria, the trend for typical female fields of studies follows the European trend: Women in Bulgaria make up for the majority in fields of studies, such as “Teaching, Training and education science” and “Humanities and arts”. Nevertheless, the trend for typical male fields of studies shows a different picture: Compared to the EU-28, higher share of women in Bulgaria pursue typical male fields of study, such as “Science, maths and computing” and “Engineering, manufacturing and construction”.

2

European Commission (2018), Barcelona objectives, Justice and Consumers, Publications Office of the European Union, Luxembourg, available at: https://ec.europa.eu/info/sites/info/files/bcn_ objectives-report2018_web_en.pdf. In 2002, the heads of state and government agreed on two targets for children under mandatory school age being in childcare (these are the Barcelona objectives): 33% of children under age of 3, and 90% of children between 3-years old and mandatory school age. See: https://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/71025.pdf.

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Fig. 12.2 Share of part-time to total employment by gender, 20–64, per Member State, 2017q3

12.2.4 Horizontal Segregation (Under and Over Representation of Women in Occupations and in Economic Sectors) Horizontal segregation is less pronounced in Bulgaria than in the EU-28; 68.6% of women and 65.0% of men are employed in their respective five most common sectors. The largest numbers of women (21.8%) as well as men (19.7%) are employed in manufacturing. “Wholesale and Retail” (20.3% of women and 15.8% of men) is the second most popular sector for both genders. Beyond those two sectors, the genders show a common trend: Women tend to work in the service-based industries, while men tend to work in “construction”, “transportation and storage” and “public administration”. Explaining these numbers, one has to take the history of the country into account: The focus on manufacturing is still related to a predominantly industrial past, a relic of the economic integration with the USSR. The higher percentage of women working in the service-based industry is reflecting the current economic developments that come along with the integration into the EU. The difference in the choice of occupations, however, displays stronger differences between women and men which are very much in line with the general EU-28 trend. Within the five most popular occupations, there is only one overlap: 10.0% of women and 9.0% of men work as “personal service workers”. The rest of the labour force working in the most popular occupations—sales workers, business and administration professionals, cleaners and helpers, general and keyboard clerks for women; drivers and mobile plant operators, metal, machinery and related trades workers, building and related trade workers, labourers in mining and construction for men—is strictly separated by gender. However, the Bulgarian labour market seems to be equally diversified for both genders—48.9% of women and 46.7% of men work in the top five occupations.

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12.2.5 Gender Segregation in Occupations and in Economic Sectors Index This index reflects the proportion of the employed population that would need to change occupation/sector in order to bring about an even distribution of men and women across occupations or sectors. The index varies between 0 (no segregation) and 50 (complete segregation). For the EU as a whole, the figures are still high: 24.3% for occupational segregation and 18.9% for sectoral segregation. Gender segregation in occupations 2005 2010 2015

Gender segregation in sectors 2005 2010

2015

27.8

19.2

21.9

28.9

28.6

21.1

Gender segregation Index of Bulgaria.3

12.2.6 Vertical Segregation (Under and Over Representation of Women in Hierarchical Levels) Vertical segregation is more pronounced in Bulgaria than in the EU-28. Only 15.3% of board positions in 2016 were held by women, which is 8.6 pp below the EU-28 average of 23.9%. Additionally, instead of progress between 2013 and 2016 there is a decline by 1.4 pp in the proportion of women in boards of the largest publicly listed companies. Proportion of women in the house of Parliament also experienced a decline by 5.4 pp compared with 2013 and in 2016, women were only 19.2%. Significant progress has been made in the proportion of women among senior ministers in national government—from 16.7% in 2010 up to 38.9% in 2013 and reaching 47.4% in 2016, which is 19.5 pp above the EU-28 average of 27.9%. Proportion of women in boards of the largest publicly listed companies (%) 2010 2013 2016

Proportion of women in the house of Parliament (%)

2010

2013

2016

2010

2013

2016

11.2%

22.1%

24.6%

19.2%

16.7%

38.9%

47.4%

16.7%

15.3%

Proportion of women among senior ministers in national government (%)

Gender equality in decision-making in Bulgaria.4 3

2017 Report on equality between women and men in the EU, https://eeas.europa.eu/sites/eeas/ files/2017_report_equality_women_men_in_the_eu_en.pdf. 4 2017 Report on equality between women and men in the EU, https://eeas.europa.eu/sites/eeas/ files/2017_report_equality_women_men_in_the_eu_en.pdf.

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According to International Labour Organization, Bulgaria ranks ninthth out of 88 countries for women’s percentage share of all managers in 2016. Female share of employment in senior and middle management in Bulgaria is 39.3% of all managers.5 And according to the Inter-Parliamentary Union’s Women National Parliament World Classification, Bulgaria ranks 73rd out of 193 countries on the number of women members of the National Assembly, elected in 2017—57 out of 240 members or 23.8% (Fig. 12.3).6 Considering the data in Fig. 11.2, we can enjoy increase of the share of women on the boards of the largest publicly listed companies practically in all the EU countries. In many of them, even it became regulated by law. In the countries in CEE, like Bulgaria it is not and the growth is not substantial, but also the big corporations listed in not high, with many of the big companies coming like outsourced businesses, managed by women, and not considered in this statistics.

12.2.7 Gender Pay Gap7 Progress in equality between women and men on the labour market is usually gauged by means of aggregate indicators in three fields: in employment, in the prevalence of atypical work such as part time and the pay gap. In 2016, Eurostat updated data on the gender gap in earnings, which compiles inequalities resulting from the gaps in pay, working hours and employment. This is therefore the most comprehensive indicator of labour market inequalities between women and men. It shows that the EU is still far from reaching gender equality on the labour market. Even in the most equal countries, the overall gender gap in earnings stood at 20% or so, while it reached 45% or even more in Germany, Greece, Malta, the Netherlands, Austria and the UK. The gap stood at 39.7% in 2014 in the EU, down from 41.2% in 2010. Inequalities narrowed slightly at the beginning of the decade in most EU countries, with the notable exception of Denmark, Estonia, Ireland, Latvia, Lithuania, Poland and Slovenia. At this rate of change, it would take another century to close the overall gender earnings gap.

5 International Labour Organization (2018), ILO database of labour statistics, Female share of employment in senior and middle management. 6 2017 Inter-Parliamentary Union’s Women in National Parliaments Classification, International labour Union, http://archive.ipu.org/wmn-e/classif.htm. 7 The Global Gender Gap Index was First introduced by the World Economic Forum in 2006 as a Framework for capturing the magnitude of Gender-based disparities and tracking their progress over time.

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Fig. 12.3 Change in the proportion of women on the boards of the largest publicly listed companies in the EU, October 2010–October 2018 (percentage points)

12.2.7.1

The Gender Pay Gap (%)

The gender pay gap is the difference between average gross hourly earnings of male and female paid employees, expressed as a percentage of the former. With 15.4% gender gap Bulgaria is 0.9 pp below the EU-28 average of 16.3 for 2015. Thus, the average female employee earns 15.4% less than the average male employee. 2007

2008

2009

2010

2011

2012

2013

2014

2015

12.1

12.3

13.3

13.0

13.2

15.1

14.1

14.2

15.4

The gender pay gap (%) in Bulgaria.

12.2.7.2

Overall Gender Gap in Earnings (%)

The overall gender earnings gap is a composite indicator. It measures the combined impact on the average earnings of all working-age women (whether or not employed), as compared with men, of: average hourly earnings; average number of paid work per month (before any adjustment for part-time work); and employment rate. The overall gender gap in earnings in Bulgaria for 2016 is 22.8% and is thus considerably smaller (16.9 pp) than on EU-28 average of 39.7%. 2002

2006

2010

2014

28.2

24.5

23.5

22.8

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Fig. 12.4 Gender gap by country, 2018

Overall gender gap in earnings (%) in Bulgaria. According to the 2016 Report by World Economic Forum’s assessments of workplace equality with the Global Gender Gap Index, Bulgaria ranks high in 18th position among 144 countries with the index 0.7456. According to the 2018 Report by World Economic Forum’s key findings include: • Globally, the average (population-weighted) distance completed to parity is at 68.0%, which is a marginal improvement over last year. In other words, to date there is still a 32.0% average gender gap that remains to be closed. The directionally positive average trend registered this year is supported by improvements in 89 of the 144 countries covered both this year and last year. (The Global Gender Gap Report 2018) (Fig. 12.4).

12.2.8 Women’s Share of Unpaid Work: More Hours, More Intensive and More Regular According to the data on the gender gap, the performance in Bulgaria is quite in the “short” distance of this gap, well headed by the Northern countries in Europe, and practically the best performing in South Europe and in Central and Eastern Europe with only Slovenia ahead in this region. At the same time, the result shows that

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countries from Central America and Africa might be in this “short” version of the gap too. Progress towards economic independence is usually gauged by the employment rate, but also by the number of paid working hours, which better reflects work intensity. Men spent 39 h of paid work per week on average in the EU, whereas women spend 33 h in paid work. In contrast, they do the lion’s share of housework and care: Working women spend 22 h per week in unpaid work, while working men spend fewer than 10 h. However, there are marked differences between countries. The division of housework and care between women and men is more equal in the Nordic countries, although parity has not yet been reached even there. It is not only the important matter of the number of hours men and women spend in paid and unpaid work that differs greatly, the type of tasks they do is very different too. Women tend to perform more routine, labour-intensive and rigidly scheduled tasks, in rapid alternation or even simultaneously. This is notably the case when they enter motherhood, but also if they care for elderly or disabled relatives. In the latter case, they tend to be more involved if care becomes more intensive and regular: Among 18–64 year olds, 20% of women and 18% of men were informal caregivers, of which 7% of women provided care on a daily basis compared to 4% of men. Paid and unpaid working hours, per sex, with countries ranked by the size of the gap in unpaid working hours, rank Bulgaria on 22nd place in the EU-28. Women’s unpaid work is 21 h per week, while men’s unpaid work is 7 h per week, hours worked in main and second job—40 for women and 41 for men, with commuting time hours per week 3 and 2, respectively (Eurofond 2015).

12.3

Gender Egalitarianism in Bulgaria (GLOBE Project)8

Gender Egalitarianism is the extent to which an organization or society minimizes gender -role differences, and its components include attitudinal domain with gender stereotypes and gender-role ideology and behavioural manifestation with gender discrimination and gender equality. On behaviour-tied Gender Egalitarianism measures (practices, “as is”) Bulgarian managers scores high (4.42) far exceeding the average score for 62 societies (3.40). When positioned on the GLOBE rankings on Gender Egalitarianism, Bulgaria was on the top of the comparative list, displaying higher scores than the most egalitarian countries Hungary, Russia or Poland. However, the

8

The Study is based on the Survey of Bulgarian managers (2014–2015)as per the GLOBE Methodology and on culture distance (friction) measures for Bulgaria relative to 62 countries/ societal cultures.

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perceptual index was different and higher among women managers (4.51) than among male managers (4.28). On values-tied Gender Egalitarianism measures (values, “should be”) the Bulgarian score was moderate (4.74) when compared to the average for 62 societies (4.74), and when compared to the GLOBE rankings, Bulgaria scored on par with Bolivia (22th), Mexico (23th) and Kazakhstan (24th). The gap in responses between women and men was more visible (5.01 vs. 4.27) (Bobina and Sabotinova 2015). Overall, the data on the perception of gender roles in Bulgarian business management revealed with the GLOBE research methodology reveals strong results on Gender Egalitarianism and suggests that this phenomenon serves as the important factor in business practices and in the economy at large. The study confirms the advancements in the equality of the roles of women and men and is consistent with the results of the other estimates by the international statistical authorities. It displays Bulgaria among the leading countries in terms of perception of the practices, and among the top 50% of 62 societies who participated in the GLOBE research.

12.4

Assertiveness

Assertiveness has been the study of psychologists and communication scholars for decades. In the field of communication, assertiveness falls within the study of interpersonal communication and has been defined in interpersonal communication as the kind of communication that happens when the people involved in talk and listen in ways that maximize the presence of the personal. Assertiveness is seen by other scholars as being a “skilful” form of interpersonal communication in which participants are open to one another about their own feelings and perspectives and respect those of the other. Today, in the early years of the twenty-first century, the development of a culture of assertiveness is especially important in light of the rampant sense of division and violence in the Western culture. A culture composed largely of assertive people would be an antidote to this often violent polarization because of the emphasis in assertiveness on respect and equality for all people involved. It would especially benefit our society to promote the practice of assertiveness among women, who are still in many cases brought up to be supportive and polite rather than forthright and assertive. Assertiveness can be an effective interpersonal communication attitude meant to promote equality in person to person relationship and to exercise personal rights without denying the rights of others: a more optional communicative behaviour for maintaining positive human relationships and resolving conflicts than is aggression because it promotes harmony, ensures that all needs are met, and decreases the sense of resentment that can build up when those needs are not met. If assertiveness can bring so many benefits to our society, one might wonder why it has taken so long for its practice to be universal—and why, in particular,

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professional women have such a difficult time expressing it. There are a lot of challenges that professional women have traditionally experienced—and continue to experience—in their efforts to be assertive in the workplace: Women are always already at a disadvantage because workplaces have many unspoken rules of behaviour, rules and communication norms that are fundamentally premised on masculine ways of communicating and interacting in the world. As a result, women are at a disadvantage because their communication strategies and expectations, speech community and interaction styles are distinctly different from masculine communication strategies and expectations (Kelly 2015). Much of communication and leadership literature has focused on assertiveness in professional women in particular because the directness and initiative, most often associated with assertiveness, are often seen as counter to the social expectations that women should be helpful, affectionate and nurturing. Because of the expectations placed on them as both professional and female, women have often had to choose when to be more assertive and when to use the softer traits, more often associated with women. Among other issues, the women have also experienced this need to decide when to behave assertively—and when to conform to social expectations. What factors drive these women to dare to act assertively—against the norms set out for them as females? And how do these women become transformed by the very practice of assertiveness when conforming to the expectations of others can be so much easier and safer? It would be vital for readers to understand the difference between assertiveness and aggression. Alberti and Emmons (2012) describe aggression as a set of behaviours in which the aggressor speaks his or her own mind in a way that hurts the other person, and as one who controls others, makes choices for them and is “self-enhancing at the expense of the other”. In contrast, they describe an assertive person as one who does, indeed, voice his or her own opinion and possibly achieves goals, but always with respect for the other person—allowing the other his or her dignity. Women often identified aggression as a communication style and set of behaviours that try to grasp power over the other person, and assertiveness as a way to work with others to achieve a common goal. In exploring how professional women value and practice assertiveness, the assumption is that assertiveness is not a fixed communication pattern practised uniformly by all people, but rather a continuum of traits and practices. These traits and values range from respect for the rights of others, helping others to “save face” and helping others to achieve their goals to standing up for one’s own rights and expressing one’s emotions and opinions. These assertive traits range from concern for the other to concern for oneself and for one’s organization. The traits of assertiveness that are most valued by the women—and how these values relate to the organization in which she works and to that organization’s core values.

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219

Assertiveness in Bulgaria (GLOBE Project)9

Assertiveness is defined as the degree to which individuals in organizations and society are assertive, confrontational and aggressive in social relationships. Being an important aspect of social culture, this dimension has received relatively less attention in literature. Bulgarian score on assertiveness was lower than average GLOBE score on practices (3.67 vs. 4.14) but higher on values (4.40 vs. 3.38); and “should be” score was higher than “as is” responses. Bulgarian assertiveness scores do not visibly deviate from the average GLOBE scores thus, explaining avoidance on confrontational, aggressive behaviours in an environment known for collective actions with obedient behaviours and conformist mentality. The lower levels of assertiveness in the society may also be interpreted as a result of strong family bonds, nepotism, friendliness and kindness which are deeply rooted in traditions (Bobina and Sabotinova 2017).

12.5.1 Assertiveness Training for Women 12.5.1.1

The Principles of Assertiveness

• Distinguishing between passive, assertive and aggressive behaviours • Discussing how Bulgaria’s social context affects your behaviour in the business environment • Identifying your individual work scenarios and obstacles that challenge your assertive behaviour.

12.5.1.2

Assessing Your Assertiveness

• Identifying your own assertiveness style preferences • Objectively assessing and identifying strengths and weaknesses of your assertiveness style • Understanding how your personal value systems impact your assertiveness • Identifying ways to reduce any conflict between the values you hold and the principles of assertiveness.

9 The Study is based on the Survey of Bulgarian managers (2014–2015) per the GLOBE Methodology and on culture distance (friction) measures for Bulgaria relative to 62 countries/ societal cultures.

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12.5.1.3

Getting to Know and Like Yourself

• Understanding how assertiveness can support your self-esteem • Looking at how well you know yourself • Using confidence and assertiveness techniques to initiate internal dialogue and stop negative self-talk.

12.5.1.4 • • • •

Assertive Body Language

Its ok to look someone into the eye The danger of large arm and hand gestures—what they say about you Avoiding the “girlie” gestures that immediately devalue your message Owning your space—and avoiding our natural instinct to “shrink”.

12.5.1.5

Assertive Communications Skills

• Understanding the different elements of communication and the factors that influence their impact • It’s not just what you say, but how you say it that conveys a confident message • Discovering the differences between the verbal and nonverbal communication styles of men and women • Applying active and reflective listening skills to build your assertive skills • Listening objectively and responding assertively to feedback and criticism.

12.5.1.6

Assertiveness Techniques and Practices

• Discovering assertive language and practicing this in a safe environment • Exploring four special assertiveness techniques: broken record, fogging, negative assertion and negative inquiry • Saying “no” and surviving • Responding assertively to common put-down statements—in a way that doesn’t permanently damage the relationship.

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12.5.1.7

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Leading a Balanced Life

• Practical techniques to help you deal constructively with anger • Limiting and coping better with stress • Assessing your personal level of work and life balance—and making sure you have the balance right • Discussing the value of women support networks and resources • Planning for your continuing assertiveness growth.

12.6

Conclusion

Before discussing recent development on cultural profiles and assertiveness of women in Bulgarian business environment, we need to check latest economic gender profile of Bulgaria announced by World Economic Forum (Fig. 12.5).10 According to the Global Gender Gap Index Data above, we keep the track of the tradition in which the education and health are the sectors where the gap is almost invisible. In some countries, like Bulgaria in the education, the women even dominate. On the trends, deviation continues with the indicators of women as head of state (still we don’t have one in Bulgaria, and one was a prime minister historically). Still a matter of worry is the deviations towards the indicators related to the wage equality and the estimated earned income. Considering the Global Gender Gap Index Data in comparative to the other countries mode, than definitely it a matter of proud for Bulgaria to show its ranking the top for the women involvement as professional and technical workers. It ranks first also, if the women in ministerial positions have to be considered, the enrolment in tertiary education and on the status of healthy life expectancy. The highly positive outcomes from those indexes are the potential of the influence coming from women both in top policy and in educational positions. Considering the negative extremes in the ranking, we may almost eliminate the lowest ranking (121-th place) for Bulgaria in enrolment in secondary education, as the distance to parity is almost zero, and even it might prove positive for the gender balance. There is an indicator that is practically uncontrollable—the sex ration at birth (114-th place)—it is related by the natural process of birth, and also the data on female and male is missing there, as this data is missing on the indicator for the wage equality for similar work (116-th place), where the missing data by sex may mean that the survey was not performed with a significant sample. Professional women today face competing expectations. As professionals, many are expected to behave assertively and effectively in their relationships with others

10

http://www3.weforum.org/docs/WEF_GGGR_2018.pdf.

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Fig. 12.5 Exploring the global gender gap index data

in their organizations. Yet, perhaps unconsciously, our culture still expects them to behave as the gentler, more supportive and more cooperative gender. Each woman has a unique personality, and some might genuinely have those gentler, more cooperative traits expected by our culture, while others might not. It is important that women remain true to their nature while meeting both cultural and organizational expectations.

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Studies through the years have been consistent in showing that women’s communication style is expected to be more polite, agreeable, compliant, cooperative and other directed than that of men. The conflict that professional women face between meeting social expectations of women and acting assertively and effectively in their organizations, as well as the tendency of professional women to choose when to be assertive and when to serve in a more traditional female supportive role, has been confirmed. Women have identified aspects of assertiveness that they find most effective and most favourable to the way they view their roles and their own philosophies. They have emphasized such values as respect for others; advocacy for their own values and for the needs of others; teamwork; inclusion; honesty and integrity and effective, respectful communication. Women have found themselves empowered and transformed—able to go beyond the limits set for women by society and—perhaps more importantly—set by themselves. In taking these bold and uncomfortable steps, they have discovered their own inner strength and a flexibility that allows them to operate at an optimum level in their professions: Playing the supportive role of listener and affirmer when needed but, in other cases, asserting themselves and going beyond social expectations when the situation calls for a bolder word or action. They—and so many other women and men who may not have voiced their own acts of courage in assertiveness—can help pave the way for a culture that celebrates true assertiveness in all people as a way to maintain positive human relationships and resolve conflicts. In a world fraught with terrorism, greed, violence and hatred, this interpersonal development of true, respectful assertiveness offers a shining ray of hope.

References Alberti, R., & Emmons, M. (2012). Your perfect right (9th ed.). Atascadero, CA: Impact Publishers. Baltov, M., & Baltova, S. (2014). Improving Managerial Capabilities of Expatriates in Bulgaria, “Research Papers of IBS”, Botevgrad, Vol. 5, 2012–2013. Bobina, M., & Sabotinova, D. (2017). Bulgarian management in a cross-cultural space. Journal of East European Management Studies, 22(1), 105–127. Bobina, M., & Sabotinova, D. (2015). The role of women in Bulgarian business: Cultural perceptions. // Бизнec пocoки, БCУ, Бypгac, бp. 2, c. 106–109. Accessed March 15, 2017. Eurofound. (2015). European working condition survey. https://www.eurofound.europa.eu/ surveys/european-working-conditions-surveys/sixth-european-working-conditions-survey2015. Accessed June 5, 2018. Global Gender Gap Report. World Economic Forum. http://www3.weforum.org/docs/WEF_ GGGR_2018.pdf. Accessed May 25, 2019. International Labor Organization. (2018). ILO database of labour statistics, Female share of employment in senior and middle management. Inter-Parliamentary Union’s Women in National Parliaments Classification. http://archive.ipu.org/ wmn-e/classif.htm. Accessed May 5, 2019.

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Kelly, B. (2015). Assertiveness in professional women. A Thesis. Gonzaga University. http:// web02.gonzaga.edu/comltheses/proquestftp/Kelley_gonzaga_0736M_10506.pdf. Accessed July 10, 2018. Report on equality between women and men in the EU. https://ec.europa.eu/info/sites/info/files/ aid_development_cooperation_fundamental_rights/annual_report_ge_2019_en.pdf. Accessed on May 5, 2019.

Professor Milen Baltov Ph.D. is himself an example of the transition from a business consultant to the small and medium-sized enterprises (SMEs) and start-ups to an academic and Researcher in the field. He is High Profile Expert in evaluation and monitoring of support schemes in variety of technical assistance projects to the business, industry and infrastructure programmes. A Graduate (1994) of the University of National and World Economy in Sofia, Bulgaria, he was the first in CEE to draft and defend a Ph.D. dissertation (2000) on the topic of “Management Consulting for SMEs”. For two decades, he was an expert and Team Leader in a capacity building and business promotion projects in almost all the current CEE countries, with best impressions from his missions in Macedonia, Croatia and Serbia. For the moment, Prof. Baltov is a Vice-Rector of the Burgas Free University and a Programme Committee member for the “Innovations in SMEs and Access to Risk Finance” filed of the EU Framework Programme for Scientific Research and Innovations “Horizon 2020”. He is a member of the Black Sea Innovations and Research Agenda working group member—initiative run by the “Maritime Research” unit at DG RTD of the EU Commission. He is head of the Ph.D. programme in “Economics and Management in Industry” and academic adviser of four Bulgarian, 2 Nepali, 1 Indian and 1 Pakistani Ph.D. students in business issues. He is a member of the working group for financial engineering in the R&D projects and Evaluator of the EU COST Programme project applications. Diana Sabotinova Mladenova has graduated from English Language School—Burgas at 1987. Her master degree is from University of National and World Economy—Sofia on Social-economic planning at 1991. She had Ph.D. degree from Economic Institute of the Bulgarian Academy of Science—Sofia, Section “Macroeconomics”. Her Ph.D. thesis title is “Macroeconomic Consequences of Population Ageing”. She is working at Burgas Free University—Burgas since 2000.

Chapter 13

Investing in Women’s Entrepreneurship: Inclusive and Sustainable Economic Growth Arzu Özyol

Abstract An important part of capitalizing on human potential lies in fostering entrepreneurship, which is essential to economic growth and employment creation. A Global Entrepreneurship Monitor study of 18 economies from 2002 to 2010 suggests that women’s entrepreneurial activity is lower than that of their male counterparts at different stages of development. Although, women’s entrepreneurship is large, diverse, and of great economic significance to achieve sustainable development, women-owned businesses comprise between one-quarter and/or one-third of businesses worldwide. It is almost certainly understated because available data do not always distinguish by gender, and women are more likely to run businesses in the informal economy where data are hard or impossible to capture. Societal attitudes and norms inhibit some women from even considering starting a business, while systemic barriers mean that many women entrepreneurs stay confined to very small businesses often operating in the informal economy. Exclusion of land rights and other gender-specific patterns of the property make it difficult for women to acquire physical assets for chain activities. Further, gender differences in literacy and education reduce their ability to communicate with buyers and suppliers and thus limit their bargaining power. Women experience greater constraints on their economic actions relative to men. This means that women tend to different needs than men regarding entrepreneurship due to the different roles and responsibilities of women which are assigned by society. However, governmental policies and programs must address the various constraints acting on the abilities of women to succeed. International networks are very important concerning capacity and business development of women entrepreneurs through the development of gender-sensitive public policies, supply chain, and marketing practices besides the promotion of women’s entrepreneurship. Through networks, the information should be attractive to women and should advertise programs matching the assistance they need. Otherwise, it could be harder to recruit women into entrepreneurship in cases when women do not believe they are able to take on the challenge. The purpose of this paper is to examine women’s enA. Özyol (&) Ankara University, Ankara, Turkey e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability, Volume I, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_13

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trepreneurship support programs which are critical to strengthen the weakest links in the chain and assure inclusive upgrading of quality and growths. This paper also addresses how women’s entrepreneurship can be supported through international networks. Keywords Women

13.1


Entrepreneurship
Sustainable economic growth

Entrepreneurship and Sustainable Development

In developed countries, the economy, which is characterized by reliance on big business and mass production, has given way to a so-called entrepreneurial economy. Here, knowledge-driven goods and services are now more flexibly provided by smaller firms. Thus, the emergence of a creative class requires a less interfering but more facilitating state. In the emerging countries, most notably the BRICs— Brazil, Russia, India, China—impressive growth has been driven by a veritable entrepreneurial revolution. The need in these economies to sustain growth through sustainable access to resources, knowledge, markets, and low-carbon industrialization puts a premium on innovative entrepreneurship. Finally, in the least developed countries, where aid dependency is high, donors have been shifting the emphasis in development cooperation toward private sector development. Entrepreneurial firms make two indispensable contributions to the market economies. First, they are an integral part of the renewal process that pervades and defines market economies. Entrepreneurial firms play a crucial role in the innovations that lead to technological change and productivity growth. In short, they are about change and competition because they change market structure. They are about prospects for the future, not about the inheritance of the past. Second, entrepreneurial firms are the essential mechanism by which millions enter the economic mainstream. Entrepreneurial firms enable millions of people, including women, minorities, and immigrants, to access the pursuit of economic success (Kuratko and Hodgets 2004; Gill and Ganesh 2007). The entrepreneurial process is a major factor in economic development, and the entrepreneur is the key to economic growth. All countries consider entrepreneurial promotion as a crucial policy for sustained employment creation, as well as innovation in products, production processes, and organizations (OECD Council Report 2012). However, entrepreneurship emerged as an increasingly attractive form of income generation for both men and women, small enterprises became a source of employment creation and growth. According to the International Labour Organization (ILO), more than 204 million people are unemployed as of 2015. However, 470 million jobs are needed globally for new entrants to the labor market between 2016 and 2030 (ILO 2018). These unfavorable future prospects have been adding to the weight of entrepreneurship globally, and it has taken a place in Sustainable Development Agenda which includes 17 goals and 169 targets which had designed in order to end poverty, protect the planet, and ensure prosperity for

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all. Sustainable Development Goal 8 has been designed to promote sustained, inclusive and sustainable economic growth, full, and productive employment and decent work for all by 8 targets. Target 8.3 directly aims to support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small-, and medium-sized enterprises, including through access to financial services. Promoting inclusive and sustainable economic growth, employment and decent work for all is the key issue for sustainable development agenda because poverty eradication is only possible through stable and well-paid jobs (UN 2018).

13.2

Gender Equality and Sustainable Development

The feminist movement in the USA is often described as taking place in three waves. The ideals of feminism existed before the First Wave, but were organized into an identifiable movement in the mid-1800s. African-American women were fighting for women’s rights within the abolitionist movement prior to the First Wave. And first nation American women embodied many of the ideals of the feminist movement long before this time. The Women’s Rights Movement in the USA began in the 1840s with suffragettes fighting for equality for women, including the right to vote. After winning the right to vote, the movement took on other challenges, such as access to birth control and the establishment of the Women’s Bureau of Labor, which championed employment opportunities, and lobbied for safety from workplace abuse and unsafe conditions. After World War II, the return of soldiers to civilian life ushered the new era of the feminism. The women, who took place in economic life to meet their daily requirements, returned back home to gain the ground for men. It was the major reason to open discussions on women in economy and patriarchal system. The Second Wave of the feminist movement began in the 1960s and ended approximately in the 1990s. As in the First Wave, feminism was intertwined with the greater civil rights movement in the USA at the time. During this wave, women identified their fight as being against patriarchy, the predominant social structure where families and society are controlled by men and where rights, name, wealth, and privilege are passed down through fathers, preventing equal opportunities for women. Feminists in the 1970s and 1980s worked on increasing women’s legal and workplace rights, such as fighting for legislation to protect women from workplace sexual harassment. In the 1990s, there was a rise in theoretical orientations to define the duality between gender and sexuality. Feminists in the Third Wave consisted of women who had been raised with the rights earlier generations of feminists had fought to achieve, such as the right to vote, own property, and have credit cards and bank accounts. Much of the work of the feminist movement has been to fight for equality in political, professional, and domestic spheres. In the last two decades, the feminist movement has focusing on creating gender equality in the workplace. Today, contribution of women to the

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labor market is not the issue of women activists entirely; it is the major component of sustainable development as well (Kinser 2004; Byers and Crocker 2012; Lorber 2010). In many international human rights, instruments included “Convention on the Elimination of All Forms of Discrimination Against Women,” gender equality is accepted as an inalienable and integral part of human rights and fundamental freedoms, and it is essential for to achieve sustainable development, peace, and security as well. It is also important to emphasize that the concept of gender is not only relating to women. Gender refers to both women and men and relations between them. Since Beijing Conference in 1995, gender equity was used as a terminology to provide a balance between women and men. gender equity denotes an element of interpretation of social justice, usually based on tradition, custom, religion, or culture. However, advancement of women is unacceptable by the term of gender equity. During the Beijing Conference, it was agreed that the term equality would be utilized. gender equality means that the rights, responsibilities, and opportunities of individuals will not depend on whether they are born male or female. Equality does not mean “the same as.” In other words, promotion of gender equality does not mean that women and men will become the same. Equality involves ensuring that the perceptions, interests, needs, roles, responsibilities, and priorities of women and men will be given equal weight in planning and decisionmaking. Women also have a critical role to play in all of the SDGs, with many targets specifically recognizing women’s equality and empowerment as both the objective and as part of the solution. Goal 5 is known as the stand-alone gender goal because it is dedicated to achieving these ends (Ozyol and Çobanoglu 2016).

13.2.1 Gender Role Ideology and Entrepreneurship Recently, researchers have moved beyond simple differences between men and women. They focus on other aspects of gender, such as gender role ideology and duality, to better understand how multiple factors may shape outcomes related to entrepreneurship. For example, stereotypical male characteristics such as aggressiveness, autonomy, and courage are correlated with higher entrepreneurial intentions. In other words, both genders identified entrepreneurs as having characteristics stereotypically associated with men. A study across 17 countries found women tended to perceive themselves and the entrepreneurial environment less favorably than men regardless of their motivation to become an entrepreneur. Research has found that the degree to which a person associates with traditional gender stereotypes mediates their satisfaction in their business. Additionally, those of either gender who possess more stereotypically masculine traits are more likely to find satisfaction through financial success, attaining status, and higher growth of their business, while feminine characteristics are more likely to seek work satisfaction through relationships and contribution. Moreover, individuals with more feminine characteristics may not be high-growth-oriented entrepreneurs (Gupta et al. 2009; Schoon and Duckworth 2012).

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Small business performance have elucidated the key role that entrepreneurial traits. One of such entrepreneurial trait that has received enormous interest in recent years is entrepreneurial self-efficacy (ESE). ESE refers to an individual’s beliefs regarding their capability in discovering and exploiting opportunities in the process of starting and growing a business (Klyver and Thornton 2010). ESE is vital to the performance of small businesses because the decisions and actions of a small business owner directly influence the direction of the firm and consequently its overall performance (Baum and Locke 2004; Markman, Baron and Balkin 2005). Studies have found that entrepreneurial self-efficacy (ESE) was equal between genders. When accounting for gender role ideology, ESE was higher for men than women. Therefore, gender itself was not found to impact self-efficacy, but gender role orientation was (Mueller and Conway Dato-on 2013; Carr and Sequeira 2007).

13.2.2 Gender-Sensitive Public Policies: Gender Mainstreaming The strategy of mainstreaming is defined in the ECOSOC Agreed Conclusions, 1997/22, as ….the process of assessing the implications for women and men of any planned action, including legislation, policies or programs, in all areas and at all levels. It is a strategy for making women’s as well as men’s concerns and experiences an integral dimension of the design, implementation, monitoring and evaluation of policies and programs in all political, economic and social spheres so that women and men benefit equally and inequality is not perpetuated. The ultimate goal is to achieve gender equality.

Gender mainstreaming in policy analysis and development is implemented to determine the impacts of policies on women and men and explore how this impacts could vary regarding gender differences and inequalities. It should also enable decision-makers for cutting the gender gap down. In the first step, gender perspectives should be reflected in the formulation of the policy. The accurate formulation is important in the means of fixing of the proper scope of constructive process. Secondly, gender-disaggregated data are obtained to analyze the gender differences and inequalities in the framework of the scope. The third important point is the assessment of the implications of different options that could have different costs, benefits, and consequences for women and men. Fourth, gender perspectives should also be taken into account in the determination of relevant stakeholders and different options to define different needs, expectations, and information. However, the involvement of civil society and public bodies is extremely important to seek meaningful inputs from both women and men (Ozyol and Çobanoglu 2016). The Professor of Stanford University, Gita Sen, has emphasized the importance of gender issues for development policy as “A gender perspective means that women stand at the crossroads between production and reproduction, between

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economic activity and the care of human beings, and therefore between economic growth and human development. They are workers in both spheres-those most responsible and therefore with most at stake, those who suffer most when two spheres meet at cross-purposes, and those most sensitive to the need for better integration between the two.” Although there were some changes in development policies have been observed from 1970s to 2000s, it is easily said that Millennium Development Goals (MDGs) are the milestones in the means of gender needs to be understood clearly as a cross-cutting sociocultural variable. The Millennium Declaration laid out a number of key development goals framed to reflect its fundamental values. Along with the reduction of poverty and hunger, these included commitments to the promotion of human development and environmental sustainability. Additionally, they included an explicit commitment to gender equality as: No individual and no nation must be denied the opportunity to benefit from development. The equality for the rights and opportunities of men and women must be assured (Kabeer and Subrahmanian 1996; Hammer et al. 2004). There are two approaches that should be used to apply gender mainstreaming into the public policies: – Women in Development Approach (WiD) In the framework of Women in Development Approach, women are considered as a distinct and vulnerable group in projects and programs. Where women’s knowledge has been utilized in areas related to family or community health (ensuring medical plans and food security) and environmental conservation (the protection of forest products). This approach ignores the required strategies needed to pursue the various objectives involved in the use and management of environmental resources that will require the contributions of women and men alike. This approach first came to prominence in the early 1970s. Research and information collected throughout the UN Decade for Women (1975–85) highlighted the existing poverty and disadvantage of women and their invisibility in the development process. Different policy responses and interventions focused on women as a separate group resulting in women’s concerns being “added on” and peripheral to mainstream development efforts. WiD policies have proposed actions targeted only to women rather than integrating them fully into the project activities. WiD policies and interventions have concentrated on women’s productive work. The failure to make an explicit link to women’s reproductive work has often added to women’s workload. Gradually, it was recognized that an approach that focused on women in isolation, was inadequate and not sustainable. Because it did not take into account the overall project objectives or integrate women fully into their implementation. Moreover, it did not address or change unequal gender relations in various social and economic settings. However, there are shortcomings to this approach because by WID, women are not available in the use and management all kind of resources. Many policy makers tend to follow WiD approach to development discourses and programs. Although the WiD approach may be successful when implementing

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projects on a small scale, to ensure sustainable results, it is better to utilize Gender and Development Approach (Moser 1993). – Gender and Development Approach (GaD) The Gender and Development (GaD or GiD) perspective emerged in the late 1980s as response to the failure of WiD projects. Aims of GaD are to provide qualitative and long-lasting changes in women’s social status. The Gender and Development (GaD) focuses on social, economic, political, and cultural forces that determine how men and women participate in, benefit from, and control over project resources and activities differently. There are many results which have obtained from field studies are also shown that gender equality is the fundamental issue regarding economic efficiency. For instance, the same opportunities regarding required agricultural raw materials and vehicles are given to the women farmers in Kenya as men farmers, the amount of agricultural products could increase by more than 20%. This approach shifts the focus from women as a group to the socially determined relations between women and men. GaD refers the term of “gender” instead of “women.” However, several key analytical principles, relating to gender roles and practical and strategic gender needs, as well as to control over resources and decision-making in the household, civil society, and the state, were determined and translated into tools and techniques for a gender-planning process at the policy, program, and project levels (Buvinic et al. 1996). The following table indicates the major differences of Women in Development (WiD) and Gender and Development (GaD) approaches (Table 13.1). Table 13.1 Differences of Women in Development (WiD) and Gender and Development (GaD) Description

Women in development

Gender and development

Approach

An approach to development

Focus problem

An approach that views women as the problem – Women – The exclusion of women (half of the productive resources) from the development process

Goal

More efficient, effective development

Solution

Integrate women into the development process Strategies – Women’s projects – Women’s components – Integrated projects – Increase women’s productivity – Increase women’s income – Increase women’s ability to look after the households Source Dayal et al. (1993)

– Relations between men and women – Unequal relations of power (rich and poor, women and men) that prevent equitable development and participation Equitable, sustainable development with both women and men as decisionmakers Empower the disadvantaged women; transform unequal relations – Identify/address practical needs determined by women and men to improve their condition – Address women’s strategic interests – Address strategic interests of the poor through people-centered development

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The fields of Women in Development (WiD) and Gender and Development (GaD) grew through the 1980s and 1990s, respectively, and within these fields were those focusing on women and microenterprise development. They noted women’s important presence within the micro- and small-scale enterprise (MSE) sector in developing countries, the presence also found in small-scale enterprises in developed countries though to a lesser extent. They also worked to make visible the barriers limiting women’s contributions to the MSE sector. In response to women’s important roles within the microenterprise sector and the constraints limiting these roles, programs were developed to facilitate women’s participation in the economic arena (Miller and Razavi 1995).

13.3

Women and Entrepreneurship

The literature on mainstream entrepreneurship primarily focusing on the male entrepreneur emerged in the 1930s. Initial research on entrepreneurship assumed that male and female entrepreneurs were generally the same and there was no specific need for a separate investigation. In 1976, Schwartz published the first academic paper on female entrepreneurship in the Journal of Contemporary Business and the first policy report in this area titled “The bottom line: Unequal enterprise in America.” The first academic book on female entrepreneurs was published in 1985 by Goffee and Scase. Women entrepreneurship did not develop as a significant area until the late 1990s to early 2000s. The first conference on women entrepreneurs in small- and medium-sized enterprises was held in 1998. The first international academic conference was held in 2003. It was not until 2009 that a niche journal titled the International Journal of Gender and Entrepreneurship was launched (Hughes et al 2012; Jennings and Brush 2013). Global Entrepreneurship Monitor (GEM) also published the first special report on women and entrepreneurship in 2006 (Global Entrepreneurship Report 2018). Research on entrepreneurship indicated that becoming an entrepreneur is impacted by the socioeconomic status of their families for women. The authors of the study theorized was due to structural disadvantages in society that made it more difficult for women to secure start-up capital than men and necessitated family monetary assistance. For men, becoming an entrepreneur was predicted by having a self-employed father. People who own self-employed parents, found genetics and parenting practices during childhood, had strong effects on a person’s propensity toward entrepreneurship, and reinforcement of work values (Aldrich and Kim 2007; Chang et al. 2009). The impact of entrepreneurship on family dynamics may be different for men and women, based on the role they fulfill in the family. Due to women often occupying the role of primary caregiver in the family, they may be more likely to struggle with balancing work and family responsibilities and may face greater conflict between work and family roles than male entrepreneurs. According to

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Hochschild and Machung, men have not tended to take on a proportionate share of caregiving and domestic duties, leaving women working outside the home during the day and handling domestic responsibilities on evenings and weekends, dubbed the “second shift.” Disproportionate burden on the shoulders of women has impacted women’s ability to compete and succeed in the workforce and may impact a woman entrepreneur’s business growth. Women are often expected to make work compromises for children and husband’s career in a way that men are not (Mattis 2004; Rudman and Mescher 2013; Maume 2006). However, firms run by women are also usually smaller than those operated by men in terms of number of employees, asset value, and annual turnover, besides being less profitable and productive, probably due to other constraints such as difficulties obtaining financing. A study that looked at 34 countries in developed and developing economies in Europe and Asia found that female-owned firms had also fewer employees overall than male-owned firms. In the USA, women account for 35% of entrepreneurial activity. Only 20% of women-owned firms had over US $100,000 annual revenue, compared to 33% of men-owned firms—a significant difference (Kelley et al. 2013; Minniti and Arenius 2003; Noor 2004). Women own only 1% of the world’s wealth, earn only a 10% share of global income, and occupy just 14% of leadership positions in the private and public sector. And, while women produce half of the world’s food, they own a mere 1% of its land. Due to the chilly climate to the glass ceiling, gender may constrict a women’s ability to advance or to be taken seriously in her career. Although women’s entrepreneurship has been accepted as an alternative path for women who seek greater autonomy and/or income, there is still a significant gender gap in the entrepreneurial activity rate across the world (Verheul and Thurik 2001; Nedelcheva 2012). A Global Entrepreneurship Monitor study of 18 economies from 2002 to 2010 suggests that women’s entrepreneurial activity is lower than that of their male counterparts at different stages of development (Kelley et al 2013; Datta and Gailey 2012). Countries with high total entrepreneurial activity rates are also associated with high female entrepreneurial activity rates. In 2015, Global Entrepreneurship Development Institute published the Female Entrepreneurship Index report that analyzed conditions for fostering women entrepreneurship in 77 countries. As per the report, the top ten countries for female entrepreneurs in 2015 were: USA, Australia, UK, Denmark, Netherlands, France, Iceland, Sweden, Finland, and Norway. In less developed countries with the high female unemployment rate, entrepreneurship can be a practical solution to earn income for some women who need to work at home in order to handle their domestic responsibilities at the same time (Baugh et al. 2006; Sarfaraz et al. 2013). There are also regional differences in terms of the female participation rate in ownership. The following figure indicates the regional differences in terms of firm ownership, in management and as workers. Women in developed countries enjoy more equal opportunities than women in developing countries. On the other hand, as the economies move to a higher level of development, the rate of entrepreneurial activity decreases, regardless of gender.

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Because in more developed economies that both men and women have different options for employment, individuals seem to be more interested in having secured jobs rather than starting their own businesses. However, in general, the entrepreneurial gap between women and men decreases with economic development level. In other words, as the economies move from factor-driven stage to efficiency-driven stage and to innovation-driven stage, the gap between men and women entrepreneurs decreases from 5.2% points (lower for women) to 4 points and to 3.4, respectively. Access to finance is a major constraint for women entrepreneurs. In developing countries especially, it is difficult to conduct a thorough analysis of whether a female entrepreneur faces discrimination when applying or obtaining a loan. But a study using 2005 data from 34 countries of Western Europe, Eastern Europe, and Central Asia, and East Asia and the Pacific confirmed this hypothesis that womenowned or managed firms are more constrained than men’s firms. There were different results depending on the development level of countries. As expected, the probability of women obtaining loans was higher in more developed countries, and women had to give less collateral on average. The differences in financing between male and female entrepreneurs might come from a demand side component. In other words, female entrepreneurs might demand less financing than men as a result of less personal wealth to use as collateral, more risk aversion than men to apply for loans, or self-doubt given the low probability of obtaining loans, based on past experience. Nevertheless, gender financing discrimination from the supply side might not be only a matter of perception (Bruni et al. 2004; Landstrom and Lohrke 2010). Globally, women-owned businesses are well represented in the entrepreneurship space; yet it is estimated that they only access between 2 and 10% of commercial bank finance. This holds true in emerging markets, where women-owned firms represent 31–38% of all small and medium enterprises (SMEs), but have unmet financial needs close to $300 billion every year. Serving this market not only makes business sense, it is also known to have positive development impacts for society as a whole by expanding economic growth and job creation (Schoon and Duckworth 2012; Eddleston et al. 2006). Another striking research results from a new World Bank Group—housed project funded by the Bill & Melinda Gates Foundation which is measuring how people in 148 countries—including the poor, women, and rural residents—save, borrow, make payments, and manage risk. This is the first time cross-country comparable data which have been available. It confirms that women have a lower formal account penetration in every region, with the lowest rates reported in the Middle East and North Africa, and Sub-Saharan Africa, and the widest gaps in lower middle-income economies as well as in South Asia and the Middle East and North Africa. Moreover, unbanked women in developing countries are far more than men. It is important to recognize that the entrepreneur wage gap is 50 cents to every $1 of male earnings in Sri Lanka, and in Bangladesh women entrepreneurs make 12 cents per $1 men earn (The World Bank 2018).

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New Perspectives for Women’s Entrepreneurship: Education, Internalization, and Innovation

In the transition from an industrial to a knowledge society, relationships between economic growth, innovation, internationalization, and entrepreneurship have become critical. To achieve high rates of economic growth, demand for diverse products and services has been growing considerably. Female entrepreneurship has a positive impact on product diversification and innovation as well as employment and wealth creation (Bosma et al. 2008; Audretsch et al. 2006; Armignon and Acs 2002) (Fig. 13.1).

13.4.1 Training Programs for Different Capacities, Needs, and Expectations Studies on women entrepreneurs in the industrialized countries suggest that women business owners have emerged largely from the educated, commercially experienced segments of the female population. On the other hand, data also confirm a minority presence of women in entrepreneurship in science and technology: On average in EU-27 countries in 2006, women occupied 37% of all the research in the high education sector and 19% in the business enterprise sector, while in the USA, only 34% of all the scientists and engineers in business are women (http://ec.europa.eu). Women are more likely to work in the service and retail sectors which are characterized by relatively small initial investments, requiring a small amount of financial capital. Thus, women entrepreneurs are also less likely to export. If the goal is strengthening of the impact of female entrepreneurship on economic growth,

Fig. 13.1 Women entrepreneurship, innovation, and internationalization (Own elaboration of Verheul and Van Stel)

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we should contribute in order to increase awareness of women entrepreneurs about education, international trade, and innovation. If the level of education increases, entrepreneurial income and productivity increase. Moreover, high-tech sectors usually demand education and training related to mathematics, engineering, or natural sciences. Low education level creates a barrier for women to access the required experience and network (Coleman 2002; Fairlie and Robb 2009; Orser et al. 2010). My experience has shown me that there is a real problem regarding content and implementation of the training programs. The capacities, needs, and expectations of women entrepreneurs which mostly depend on their education levels and situation of the countries where they are living are different from each other. There should be different options for poor uneducated rural women, middle-income educated urban women. While the middle-income educated urban women entrepreneurs, information and communication technology literacy programs, women friendly “software” (provision of information, counseling, training), and “hardware” supports (grants, loans, premises provision, etc.) are important, providing modern agriculture techniques at fundamental level, introducing some simple technologies to improve productivity and reduce the time burden and highlighting their contribution to the local, regional, and national economy, are important for poor uneducated rural women. The overall law and order situation in the country should be provided at different levels as well (Zhao et al 2005; Delmar 2003).

13.4.2 Networks, Partnerships, Initiatives for Women Entrepreneurship at Different Levels Women entrepreneurs spend less time for networking. Nevertheless, some studies on women running technology-based businesses demonstrate that they face a “triple bind:” the lack of personal financial capital, the lack of experience (human capital), and the lack of networks (social capital) to attract external capital (Verheul and Thurik 2001). The international, or global women’s movement can be derived from the national organizations that came together around the 1975 declaration of the Decade of Women by the United Nations and its for international conferences— Mexico City (1975), Copenhagen (1980), Nairobi (1985), and Beijing (1995). These conferences were the first to bring together women from developed and developing countries, creating common interests and strategies for action the world over. A successful sustainable development agenda requires partnerships between governments, the private sector and civil society (Goal 17: Revitalize the global partnership for sustainable development). These inclusive partnerships built upon principles and values, a shared vision, and shared goals that place people and the planet at the center, are needed at the global, regional, national, and local level (Shelton 2006; Langowitz and Minniti 2007).

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Collective action through social networks and civil society groups has been a formidable force in advancing gender equality. Policy reforms arise from a political process where state and non-state societal actors vie to shape their environment. policies require trade-offs in allocating resources to competing priorities within budget constraints and financial and political costs. Societal actors have a direct hand in shaping the policies by advocating policies, designing interventions and implementing programs. Thus, over the past 25 years, supranational organizations, women’s rights groups, political parties, trade unions, state-sponsored mass organizations, and civil society groups have direct hands in shaping the policy and institutional environment through advocating policies, designing interventions and implementing programs, thus strengthening the situation of women in the economy in the form of employment and/or entrepreneurship. Thus, the following part is allocated to highlight the roles of such kind of organizations for women‘s entrepreneurship through networks and partnerships. Today, there are many UN agencies are working on gender equality from different perspectives. UN Women is the global champion for gender equality, working to develop and uphold standards, and create an environment in which every woman and girl can exercise her human rights and live up to her full potential. In response to the UN General Assembly Resolution 63/311, in January 2006 the Secretary-General presented the report A/64/588, entitled Comprehensive Proposal for the Composite Entity for Gender Equality and the Empowerment of Women. In his report, the Secretary-General resolved that, rather than relieving other parts of the United Nations system of their responsibility for contributing to the promotion of gender equality and women’s empowerment, the new entity should seek to sharpen the focus and impact of the gender equality activities of the entire United Nations System. Additionally, Secretary-General Ban Ki-moon estimated that approximately $125 million per annum were needed for operating costs and “start-up” capacity at the country, regional, and headquarters levels. Moreover, an additional $375 million per annum were needed in the initial phase to respond to country level requests for programmatic support (Gill and Ganesh 2007; Nedelcheva 2012). After years of negotiations between UN member states, women’s groups, and civil society, on July 2, 2010, the General Assembly unanimously adopted the resolution 64/289, thus creating UN Women by merging the Division for the Advancement of Women (DAW); the International Research and Training Institute for the Advancement of Women (INSTRAW, established in 1976); the Office of the Special Adviser on Gender Issues and Advancement of Women (OSAGI, established in 1997), and the United Nations Development Fund for Women (UNIFEM, established in 1976). UN Women, the UN Global Compact (business and other stakeholders) in more than 160 countries, and other leading UN agencies, the World Bank and the World Economic Forum, reinforce the findings. Governments also recognize that women’s inclusion drives development, and acknowledge that achieving the Sustainable Development Goals and national economic and development plans require rapidly moving toward gender equality (United Nations 2018).

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The Women’s Empowerment Principles, a partnership initiative of UN Women and UN Global Compact which is the world’s largest corporate sustainability initiative with more than 12,000 participants (UNGC), provide a set of considerations to help the private sector focus on key elements integral to promoting gender equality in the workplace, marketplace, and community. Principles forged through an international multi-stakeholder consultative process, provide a “gender lens” through which business can analyze current initiatives, benchmarks, and reporting practices. Subtitled Equality Means Business, the Principles emphasize the business case for corporate action to promote gender equality and women’s empowerment and are informed by real-life business practices and input gathered from across the globe. As well as being a useful guide for business, the Principles seek to inform other stakeholders, including governments, in their engagement with business. From the women’s entrepreneurship perspective, Principle 5 which focuses on the enterprise development, supply chain and marketing practices, should be evaluated. Principle 5 recommends governments and corporations to take required actions to expand business relationships with women-owned enterprises, including small businesses and women entrepreneurs, support gender-sensitive solutions to credit and lending barriers, ask business partners and peers to respect the company’s commitment to advancing equality and inclusion, respect the dignity of women in all marketing and other company materials and ensure that company products, services, and facilities are not used for human trafficking and/or labor or sexual exploitation (United Nations Global Compact 2018). The International Labour Organization (ILO) is the global body responsible for drawing up and overseeing international labor standards. Working with its member states, the ILO seeks to ensure that labor standards are respected in practice as well as principle. ILO is devoted to advancing opportunities for women and men to obtain decent and productive work in conditions of freedom, equity, security, and human dignity. Its main aims are to promote rights at work, encourage decent employment opportunities, enhance social protection, and strengthen dialogue in handling work-related issues. The Gender, Equality and Diversity Branch (GED), a part of the Conditions of Work and Equality Department of the International Labour Office, is responsible for promoting equality and respect for diversity in the world of work. GED participates in United Nations inter-agency initiatives that promote gender equality and women’s empowerment, as well as decent work for persons with disabilities, and the rights of indigenous and tribal peoples. The Branch also liaises with civil society groups and academic institutions. GED coordinates the ILO Action Plan for gender equality, which is the result-based tool to realize operations according to the 1999 policy on gender equality and mainstreaming in the International Labour Office. The Branch oversees the ILO global Gender Network comprised of headquarter-based Gender Coordinators and field-based Senior Gender Specialists, along with gender focal points in all units and offices. GED expertise focuses on issues related to equal opportunities and treatment for all women and men in the world of work and eliminating discrimination based on gender, race, ethnicity, indigenous identity, and disability. The Branch provides policy advice, tools, guidance, and technical assistance to constituents including

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with respect to promoting more inclusive workplaces, and ensuring that policies, programs and institutions are gender responsive. Additionally, the Women’s Entrepreneurship Development (ILO-WED) program has been empowering women entrepreneurs in developing countries and supporting them in starting and growing their businesses since the mid-2000s. The program works with service providers promoting entrepreneurship development (financial, non-financial, public, private, associative, freelance, etc.) and builds their capacity to better support women entrepreneurs to start and grow their businesses. It also works toward creating a more positive enabling environment for WED, by supporting assessments of the situation, and working with governments and policy makers to remove the specific gender barriers that women entrepreneurs may face (ILO 2018). United Nations Industrial Development Agency (UNIDO) is the specialized agency of the United Nations that promotes industrial development for poverty reduction, inclusive globalization, and environmental sustainability. UNIDO also collaborates with partners across the UN system, the private sector and at the country level to advance gender equality and women’s economic empowerment. Through these partnerships, UNIDO provides technical cooperation activities within its three thematic areas. By encouraging investment in women-owned businesses, strengthening female networks, improving access to markets and providing training, technology and clean energy solutions for inclusive and sustainable industrial development, UNIDO is helping to create a world where women can thrive. As well as empowering women through targeted technical cooperation activities, UNIDO mainstreams gender in all programs, projects and organizational practices. UNIDO’s Policy on Gender Equality and the Empowerment of Women, issued in 2009 and updated in 2015, sets out the Organization’s gender equality commitments. The Gender Equality and Empowerment of Women Strategy 2016– 2019 provides a clear result-oriented framework and plan of action (United Nations Industrial Development Organization 2018). United Nations Conference on Trade and Development (UNCTAD) support developing countries to access the benefits of a globalized economy more fairly and effectively. And we help equip them to deal with the potential drawbacks of greater economic integration. To do this, we provide analysis, consensus building, and technical assistance. This helps them to use trade, investment, finance, and technology as vehicles for inclusive and sustainable development. The ultimate genderbased objective of the UNIDO is to make trade instrumental to the achievement of gender equality and women’s economic empowerment, as a means to ensure inclusive development (United Nations Conference on Trade and Development 2018). In 1945, UNESCO was created in order to respond to the firm belief of nations, forged by two world wars in less than a generation that political and economic agreements are not enough to build a lasting peace. Peace must be established on the basis of humanity’s moral and intellectual solidarity. UNESCO strives to build networks among nations that enable this kind of solidarity, by mobilizing for education: so that every child, boy or girl, has access to quality education as a fundamental human right and as a prerequisite for human development, building

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intercultural understanding: through protection of heritage and support for cultural diversity, pursuing scientific cooperation: such as early warning systems for tsunamis or trans-boundary water management agreements, to strengthen ties between nations and societies and protecting freedom of expression: an essential condition for democracy, development and human dignity. UNESCO has started a program for Women entrepreneurs on financial planning, management and resource mobilization skills. The aim of the program is summarized as “equipping the women entrepreneurs with knowledge and skills on basic principles of financial planning and management and ensuring that they are able to plan, control and analyze financial information for their various women groups.” It also aims at improving their capacities to explore and select suitable methods for raising revenue for their business activities in their respective counties (UNESCO 2018). The International Organisation of Employers (IOE) is the largest network of the private sector in the world, with more than 150 business and employer organization members. In social and labor policy debate taking place in the International Labour Organization, across the UN and multilateral system, and in the G20 and other emerging processes, the IOE is the recognized voice of business. The IOE recognizes that, in general, women face unique challenges throughout various stages of employment. The specific nature of these challenges and the means to address them depends on the national, social, cultural, and economic contexts in which they live and work. Business has a role to play in the promotion of gender equality. It is generally in an employer’s interest to promote workplaces that are free from discrimination against women and to ensure that decisions related to employment are based on an individual’s merit rather than gender. In this context, employers do not support the use of quotas to achieve equality, which can serve to undermine the credibility of women but the effective elimination of barriers to equal access to training and education, recruitment, and career development opportunities by the collaborations with the International Federation of Business and Professional Women (BPW International), the ILO Bureau for Employers’ Activities (ACT/ EMP), the Business and Industry Advisory Committee to the OECD, and its Business and Industry Advisory Committee (BIAC) (International Organisation of Employers 2018). The ITC led Global Platform for Action on Sourcing from Women Vendors is a 10-year initiative that aims to increase the amount of corporate, government, and institutional procurement secured by women vendors for the ultimate purpose of bringing economic benefit to women and their communities. It was established in September 2010. To date, over policy makers, international organizations, buyers, trade support institutions (TSIs), women’s business associations, and women business enterprises from 48 countries including 39 least developed countries have participated in Global Platform activities. Participants have received training and market linkage opportunities through Buyer Mentor Groups and participation in the annual Women Vendors Exhibition and Forum. United Nations Global Compact, WEConnect International, Vital Voices Global Partnership, BPW International, and the International Women’s Coffee Alliance are the partners of the Platform (www.itc.org).

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WEConnect International helps women-owned businesses succeed in global value chains. WEConnect International identifies, educates, registers, and certifies women’s business enterprises based outside of the USA that are at least 51% owned, managed, and controlled by one or more women, and then connects them with multinational corporate buyers. Vital Voices is another global initiative which makes investments for women entrepreneurs to expand their skills, connections, and visibility (Weconnect 2018). The International Federation of Business and Professional Women—known widely as BPW International—is one of the most influential international networks of business and professional women with affiliates in over 95 countries in five continents which have a consultative status to the United Nations. BPW International is working together with different partner organization on local, regional, and global platforms through advocacy, mentoring, training programs, and projects (BPW 2018). Besides the United Nations, its specific agencies and the women organizations which have a consultative status to the UN, there are a lot of regional institutions that spent efforts to develop women’s entrepreneurs at global level. Even though there are more women than men in Europe, female entrepreneurs represent only a third of the self-employed in the EU. There are some additional factors (such as reconciling business and family) that make entrepreneurship a less attractive option for them than for men. The European Commission is working with EU countries to overcome these and encourage more women to start their own companies. In this context, the European Network to promote Women’s Entrepreneurship (WES) is a policy network with members from 31 European countries (the EU-28, Iceland, Norway, and Turkey). The delegates represent national governments and institutions. They are responsible for promoting and supporting female entrepreneurship at national level. WES members provide advice, support, information, and contacts regarding existing support measures for female entrepreneurs. They also help identify good practices (https://wegate.eu/wes-european-network-promotewomens-entrepreneurship). The new World Bank Group Gender Strategy (FY 2016–2023) outlines the support that the entire Group, including International Finance Corporation (IFC). IFC is the largest global development institution focused on the private sector in developing countries. IFC is a dynamic organization, constantly adjusting to the evolving needs of our clients in emerging markets. IFC’s commitment to advancing gender equality is anchored in a strong business case and in client demand for gender-smart solutions, which has significantly grown over the past five years. In response, we are working with clients to reduce the gap between men and women as entrepreneurs, employees, corporate leaders, suppliers, consumers, and community stakeholders. IFC support companies with gender-specific advice and investment. We help to provide access to credit, markets, housing, savings and insurance products, information, and technology and supply chains. IFC’s commitment to advancing gender equality is anchored in a strong business case and in client demand for gender-smart solutions, which has significantly grown over the

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past five years. In response, we are working with clients to reduce the gap between men and women as entrepreneurs, employees, corporate leaders, suppliers, consumers, and community stakeholders (World Bank 2012; International Finance Cooperation 2018). In June 2003, the LEED Directing Committee agreed to launch this study as part of the OECD efforts to integrate a gender perspective into the substantive work of the organization. The aim of this project is to examine the role of female entrepreneurship in the dynamics of local development and to give an overall review of the current situation of women entrepreneurs in a given territory. These studies will result in the elaboration of recommendations for policy makers to help them to implement tools adapted to the real needs of women entrepreneurs in the formulation of local development strategies and business creation policies (OECD 2018b). Through the Global Gender Gap Report, the World Economic Forum quantifies the magnitude of gender disparities and tracks their progress over time, with a specific focus on the relative gaps between women and men across four key areas: health, education, economy, and politics. The aim of the Global Gender Gap Report is to focus on whether the gap between women and men in the chosen indicators has declined, rather than whether women are winning the so-called battle of the sexes. Hence, the Index rewards countries that reach the point where outcomes for women equal those for men, but it neither rewards nor penalizes cases in which women are outperforming men on particular indicators in some countries (https:// www.weforum.org/reports/the-global-gender-gap-report-2017).

13.5

Conclusion

According to the OECD 2012 Council Report, the entrepreneurial process is a major factor in economic development, and the entrepreneur is the key to economic growth. All countries consider entrepreneurial promotion as a crucial policy for sustained employment creation, as well as innovation in products, production processes, and organizations. Thus, supporting entrepreneurship is the key issue for sustainable development agenda because poverty eradication is only possible through stable and well-paid jobs. On the other hand, much of the work of the feminist movement has been to fight for equality in political, professional, and domestic spheres. In the last two decades, the feminist movement has focusing on creating gender equality in the workplace. Today, contribution of women to the labor market is not the issue of women activists entirely; it is the major component of sustainable development as well. Women entrepreneurship did not develop as a significant area until the late 1990s to early 2000s although the literature on mainstream entrepreneurship primarily focusing on the male entrepreneur emerged in the 1930s. The World Bank’s 2012

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World Development Report on Gender Equality and Development dedicate over 400 pages to demonstrating how greater gender equality enhances economic productivity, human development, and institutional performance, and how gender inequality harms growth. There is also global recognition that increasing women’s control over household income is essential for international human development, with influential studies showing that women reinvest a higher proportion of income earned in their family’s upkeep and well-being than men. A smaller number of leading companies are recognizing that short-term gender-inequitable practices harm business sustainability and productivity. And gender-sensitive working environments bring long-term rewards to the businesses by enabling a more stable supply of commodities, access to the most talented pool of workers, enhanced productivity, more balanced and talented boards, more appeal to the entire consumer base, and an enhanced corporate reputation. Merely, we should accept that there is no general prescription for relating the rate of female entrepreneurship to the level of economic development. This implies that female entrepreneurship in each country has its own characteristics and needs to be studied in its own socioeconomic context. Table 13.2 shows the regional differences regarding female entrepreneurship. We require more comparative studies to uncover the hidden aspects behind the complexity of the rates of women entrepreneurs, quality and longevity of their businesses, and their contribution to economic development. Although, women’s entrepreneurship has been accepted as an important unexploited source of economic growth in the last decade, there is a significant gender gap in the entrepreneurial activity rate across the world. A Global Entrepreneurship Monitor study of 18 economies from 2002 to 2010 suggests that women’s Table 13.2 Regional comparison on women’s participation in firm ownership, in management and as workers Region

% Firms with female participation in ownership

All countries 33.1 East Asia and 52.4 Pacific Eastern Europe and 36.2 Central Asia Latin America and 38.9 Caribbean Middle East and 20.2 North Africa OECD 31.7 South Asia 15.6 Sub-Saharan Africa 29.1 Source World Bank Enterprise Surveys World Bank

% Full-time female workers

% Firms with female top manager

28.9 38.7

17.2 22.5

28.1

18.7

31.3

–

17.7

–

– 16.1 22.9 Group (2018)

– 7.1 15

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entrepreneurial activity is lower than that of their male counterparts at different stages of development According to the GEM Women’s Report 2012, an estimated 126 million women were starting or running new businesses and an estimated 98 million were running established businesses. Surely, a disproportionate burden on the shoulders of women has impacted women’s ability to compete and succeed in the workforce and may impact a woman entrepreneur’s business growth. Besides gender stereotypes and disproportionate burden on the shoulders of women, access to finance is another major constraint for women entrepreneurs. In developing countries, the female entrepreneur faces discrimination when applying or obtaining a loan. We have very striking results from the study which realized in 34 countries of Western Europe, Eastern Europe and Central Asia, and East Asia and the Pacific, in 2005. Although women-owned firms represent 31–38% of all small and medium enterprises globally, they only access between 2 and 10% of commercial bank finance. The future development agenda must address fundamental structural and transformational changes informed by the concrete realities of women throughout the life cycle. Gender mainstreaming is a tool to manage this change. However, it should be implemented in policy analysis and development in order to determine the impacts of policies on women and men and explore how this impact could vary regarding to gender differences and inequalities. Secondly, gender-disaggregated data are obtained to analyze the gender differences and inequalities in the framework of the scope. For this, civil society and public bodies are extremely important to seek meaningful inputs from both women and men. Thus, over the past 25 years, supranational organizations, women’s rights groups, political parties, trade unions, state-sponsored mass organizations, and civil society groups have direct hands in shaping the policy and institutional environment through advocating policies, designing interventions and implementing programs, thus strengthening the situation of women in the economy in the form of employment and/or entrepreneurship. The third is providing training programs at different levels. Because my experiences have shown me that there is a real problem regarding content and implementation of the training programs. The capacities, needs, and expectations of women entrepreneurs which mostly depend on their education levels and situation of the countries where they are living are different from each other. There should be different options for poor uneducated rural women and middle-income educated urban women. If the goal is strengthening of the impact of female entrepreneurship on economic growth, we should contribute in order to increase awareness of women entrepreneurs about education, international trade, and innovation. If the level of education increases, entrepreneurial income and productivity increases. Moreover, high-tech sectors usually demand education and training related to mathematics, engineering, or natural sciences. And finally, women entrepreneurs have to be matched with networks which recruit women into entrepreneurship. It is especially very important in cases when women do not believe they are able to take on the challenge. If we want to build future we want, we should provide equal access to all kinds of resources, education, health care, female equality in the workplace and

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representation in political and economic decision-making processes for women and girls by implementing new legal frameworks at all levels around the World. Otherwise, it could not be possible to promote prosperity for the humanity while protecting the planet.

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United Nations Global Compact. Endorse the women’s empowerment principles. https://www. unglobalcompact.org/take-action/action/womens-principles, April 24th, 2018. Weconnect. (2018). Connecting women’s enterprises with global opportunity. https:// weconnectinternational.org/en/, March 15th, 2018. http://ec.europa.eu/research/science-society/document/library/pdf, March 21st, 2018. https://thegedi.org/research/womens-entrepreneurship-index/, February 30th, 2018.

Arzu Özyol graduated from Middle East Technical University in 1983 and received MBA degree from İstanbul Bilgi University in 2002. In May 2013, she completed her PHD study on Bioethic Environmental Politics. During the studies of her PhD, she got two courses on Global Energy and Environmental Politics an Environmental Politics from Harvard University in 2009–2010. From 1983 to 2002, Arzu Özyol worked in Construction Company as an Environmental Engineer. She has established her own company HYDRA Project and Consulting Company in 2003. The major speciality of her company is developing and managing projects for EU funds besides providing training programs for public and private institutions and technical, administrative, and financial follow-up services for ongoing projects. She is working actively for BPW since 2006. She founded the first BPW Club in Ankara-Turkey with twenty members. In 2010, the national federation was established with 100 members. She has attended all CSW Meetings since 2006 and taken influential roles during the BPW Leadership Summits and Annual WEPs Meetings held in New York. Since the launch of the Women’s Empowerment Principles: Equality Means Business, BPW-Turkey have completed four EU-funded projects and realized four high-level international events in the framework of WEPs under her coordination. Additionally, she arranged for the official UN WEPs booklet to be translated in Turkish and organized a side event on “Women in Green Businesses” by teamwork in Rio+20 (United Nations Conference on Sustainable Development). She was the UN Representative of BPW International in the past two years. She also represents BPW International in the Global Platform for Action on Sourcing from Women Vendors, B-MENA initiative (Broader Initiative for Civil Society in North Africa and Middle East) of the US Department of Government that was started by the ex-Minister of the US Department of State, Hillary Clinton. Additionally, Arzu Özyol is the member of the board of the UNESCO Center for Women and Peace in Balkan Countries and coordinator of South Eastern Europe Leadership Center for Women in Business which was established by the cooperation of BPW International and UNESCO Center in 2011. She was elected as Vice President United Nation in the last BPW International Congress that was realized in Jeju Island, South Korea, on May 2014. In August 2014, she established UNESCO Center for Global Ethics and Sustainable Development in İstanbul.

Chapter 14

The Relationship Between Sustainable Economic Development and Tourism in Turkey: Panel Data Analysis Dilek Tandoğan

Abstract Economic growth is one of the most important targets of economic policy. Policy-makers should protect the environment while ensuring economic growth. This process is defined as sustainable economic development. Many concepts have been used in the literature to measure sustainable economic development. One of these concepts is employment. Tourism sector is important for sustainable economic development due to its share in economy. Moreover, tourism contributes sustainable economic development via creating employment. For this reason, in this study, the relations between tourism sector and employment have been employed by the period of 2004–2017 in level 2 subregions of Turkey. For this purpose, the panel causality method developed by Holtz-Eakin et al. (in Econometrica 56(6):1371–1395, 1988) has been used. According to the empirical findings obtained from the estimations, there are bidirectional causality relations between tourism sector and total woman employment and a unidirectional causality from tourism sector to total employment. The importance of these empirical findings is that regional tourism increases regional employment. Moreover, tourism contributes sustainable economic development via creating employment. Consequently, the study suggests the development of regional tourism. Keywords Sustainable economic development causality Turkey




14.1


Tourism
Employment
Panel

Introduction

Concept of sustainable economic development was first mentioned in Brundtland Report, prepared by World Commission of Environment and Development in 1987. The approach based on an environmentally friendly economic growth aims a susD. Tandoğan (&) Karadeniz Technical University, Trabzon, Turkey e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability, Volume I, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_14

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tainable growth where regional disparities are eliminated and poverty is reduced. In the meanwhile from this date until today, the understanding of sustainable economic development has been developed by meetings and agreements1 made and has taken its place among noticeable topics in the world. Factors of sustainable economic development are examined in three aspects as economical, social and environmental. Tourism is one of the sectors that is affected by these three factors and affects them at the same time, as the sustainability of environmental quality reveals direct relationship with tourism activities. Untainted environmental quality and factors related to it consequently (preserved cultural and social structure, climatic and vegetal diversity) are among the main factors making a place to visit attractive. Accordingly, effects created by tourism activities cause economical and social outcomes. When global sustainable development goals and their reasons are examined, as tourism sector being an entrepreneurial alternative and causing a decrease in poverty by providing income and employment to all societies regardless of developed or underdeveloped and environmenal values can be considered as touristic attractiveness, it can be described as solution creator and contribution-maker in terms of increasing the importance given to environmental values in terrestrial ecosystem. One of the most important principles of tourism’s contribution in global sustainable development is the size of employment that is created in a global sense. Moreover, when considering nature and dynamics of tourism sector, it is known that tourism is a sector considering and prioritizing women employment especially in particular departments (Ar and Çelik Uğuz 2017: 526, 529–530). Income produced by tourism sector affects development of other sectors carrying out economic activities either directly or indirectly. Economic activities planned to meet the increasing demand increase the labour demand depending on new job opportunities and support employment. The progress occured in tourism sector in the recent years caused inter-regional income disparities taking the first place in significant economic issues in developing countries such as Turkey to reduce and thus, the sector to distinguish in efforts to increase employment. In other words, each region considers its distinctive tourism potential as an investment tool in reaching low-cost external source and as an important source in financing to support employment. However, tourism carrying out activities in service sector contributes to women employment which is more advantageous both in total employment and service sector. In addition, elimination of development disparities on regional basis is tried to be ensured with the plans done both on national and regional scale. In this respect, tourism is used as an important political tool in the elimination inter-regional development disparities. European Union defines tourism as a social factor that makes reducing regional disparities easier (Baykul and Maden 2017: 66). Among the structural funds approved by European Union, the increase in number of the ones involving tourism reveals the relationship between tourism and regional

For detailed information, see Barbier (1987), Kruja (2013), Çalık (2014) and Aksu (2011).

1

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development clearly, along with tourism being defined as a possible development strategy frequently in economic studies done by OECD Regional Development Service (Doğan and Yıldız 2007: 155). Turkey is one of the leading countries in terms of its tourism potential that attracts tourists internationally. Its climate conditions, vegetation and having hosted different cultures, its historical and cultural wealth, natural underground wealth, cuisine culture, etc. make Turkey a centre of attraction in touristic activities. Taking Turkey’s geographical features into consideration, these attractive factors mentioned contain different kinds of wealth for each region. Considering from this point of view, it is seen that tourism is a sector in which the concept of sustainable economic development moves from local to regional and that contributes to the understanding of each region preserving and handing its own features down to the next generations. Within this context, each region handing its specific cultural life and natural beauties down to the next generations by preserving them will ensure the development of tourism by diversifying and the understanding of sustainable development to improve accordingly. In fact, examples of developed countries in particular show that applications such as slow city, ecotourism, cultural tourism, sustainable tourism, green tourism, nature tourism and responsible tourism2 in the development of tourism sector actually serve to the understanding of sustainable economic development. Therefore, it appears that tourism supports sustainable economic development and the concept of sustainable economic development supports tourism consequently. Moreover, the principle of sustainability including cultural, social, economical and environmental parameters being accepted widely in the meantime from Rio Summit in 1992 to Johannesburg Summit in 2002, United Nations declaring 2002 as the year of Ecotourism and value judgements and consumption habits of societies changing after industry provide important clues about new tourism trends. When global tourism market is examined, there are two trends observed such as (1) personal area of interest oriented, marketing techniques emerging instead of mass tourism and mass-oriented marketing techniques consequently and (2) increasing number of tourists planning their travels according to their special areas of interests and cultural heritage and various art and culture activities taking place among important purposes of travel. Another trend that draws attention in terms of changing tourist profiles is the consumer movement adopting a healthy and sustainable lifestyle principle. In view of this trend on rise, many accommodation facilities try to prove that they take environmental consciousness and ecological sustainability into consideration by joining in programmes such as Green key, EU Eco-Label and Green Globe while new tourist type chooses facilities adopting methods minimising energy consumption. These new trends that emerge while tourism strategies are being determined and are supposed to be evaluated carefully (Tourism Specialisation Commission’s Report 2014: 25).

2

For detailed information, see Mirsanjari (2012).

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D. Tandoğan

Relationship Between Tourism and Employment

Tourism’s contribution to employment shows itself in three ways as direct, indirect and induced in general. Direct employment includes employment of tourism establishments such as accommodation, refreshments, transportation businesses, travel agencies and tour operators. Indirect employment includes employment in sectors providing products and services that the sector of tourism needs and activities benefiting from tourists’ expenditures. Sectors such as agriculture, fishing, construction, handicrafts, banks and production sectors are the ones being provided new employment opportunities with the development of tourism. Induced employment is the one involving additional employment created in the economy by spending the income provided by direct and indirect employment (Yıldız 2011: 60). Tourism has an important impact on creating employment as it provides approximately 235 million jobs worldwide. Income created by the employment will be used for purchasing of goods and services by themselves and their families. Thus, this case in question will meet the need for schools, hospitals, shops and service institutions apart from tourism (Lundgreen 2013: 27). Tourism and travel contributed 2.3 trillion dollars to the world GDP directly in 2016. The number in question is more than the contribution of automotive and chemicals production to the world GDP. In addition, the direct and indirect contribution of tourism to the world GDP is more than the contribution of all sectors with 7.6 trillion dollars (10.2%) except for construction, financial service and retail sectors. Also, tourism’s contribution to direct employment worldwide was 108.7 million in 2016. The number in question means job support 7 times more than automotive production sector, 5 times more than chemicals production sector, 4 times more than mining sector, 3.5 times more than banking sector and 2 times more than finance sector (WTTC Benchmark Report 2017: 1). The contribution of tourism and travel to employment was 2.2 million people for Turkey, as direct, indirect and induced. Therefore, it was determined that travel and tourism supported employment more than other sectors except for construction, retail and agriculture (Benchmark Report, Turkey 2017: 2). In this way, it can be said that efforts towards tourism could give results faster than other sectors in the efforts to increase employment in Turkey. Moreover, it is seen that tourism activities in Turkey are more active in western regions comparing to eastern regions. Figure 14.1 shows the number of tourists arrived in 2004 and 2017 on subregions basis.3 26 Subregions: TR10; İstanbul, TR21; Tekirdağ, Edirne, Kırklareli, TR22; Balıkesir, Çanakkale, TR31; İzmir, TR32; Aydın, Denizli, Muğla, TR33; Manisa, Afyon, Kütahya, Uşak, TR41; Bursa, Eskişehir, Bilecik, TR42; Kocaeli, Sakarya, Düzce, Bolu, Yalova, TR51; Ankara, TR52; Konya, Karaman, TR61; Antalya, Isparta, Burdur, TR62; Adana, Mersin, TR63; Hatay, Kahramanmaraş, Osmaniye, TR71; Kırıkkale, Aksaray, Niğde, Nevşehir, Kırşehir, TR72; Kayseri, Sivas, Yozgat, TR81; Zonguldak, Karabük, Bartın, TR82; Kastamonu, Çankırı, Sinop, TR83; Samsun, Tokat, Çorum, Amasya, TR90; Trabzon, Ordu, Giresun, Rize, Artvin, Gümüşhane, TRA1; Erzurum, Erzincan, Bayburt, TRA2; Ağrı, Kars, Iğdır, Ardahan, TRB1; Malatya, Elazığ, Bingöl, Tunceli, 3

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Fig. 14.1 Number of tourists arrived in Turkey in 2004 and 2017 on subregions basis

As seen in Fig. 14.1, TR61 region is the region which attracted tourists the most with approximately 8.954 million and 15.852 million tourists in 2004 and 2017, respectively. Similarly, TR10 (4.485 million and 10.747 million people) and TR32 (5.074 and 5.715 million people) subregions are the second and third subregions, respectively, that attracted tourists the most. In other saying, the fact that these three subregions which take place in Turkey’s west composing 52% of total number of tourists arriving in Turkey reveals the big share that these three subregions have in tourism. Figure 14.2 shows the number of people employed in 2004 and 2017 on subregions basis. As seen in Fig. 14.2, TR10 subregion is the region where the employment is the highest in Turkey with 3.521 million people in 2004 and 5.664 million people in 2017. TR51 subregion is in the second place with the employment of 1.155 million people in 2004 and 1.960 million people in 2017. TR90 takes the third place with the employment of 1.096 million people in 2004 while TR31 takes the third place with the employment of 1.611 million people in 2017. When the data in question are examined, it is seen that other regions except for TR90 subregion take place in the west of Turkey. Figure 14.3 shows the number of women employment in Turkey in 2004 and 2017 on subregions basis. As seen in Graph 3, TR10 subregion is the region where women employment is the highest in Turkey with 737 thousand people in 2014 and 1.776 million people in 2017. In the year of 2004, TR90 region is in the second place with 476 thousand people while TR83 is in the third place with 392 thousand people. It is seen that

TRB2; Van, Muş, Bitlis, Hakkari, TRC1; Gaziantep, Adıyaman, Kilis, TRC2; Şanlıurfa, Diyarbakır, TRC3; Mardin, Batman, Şırnak, Siirt.

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Fig. 14.2 Total employment in Turkey in 2004 and 2017 on subregions basis

Fig. 14.3 Women employment in Turkey in 2004 and 2017 on subregions basis

TR51 and TR31 subregions rank the second and third with 592 thousand people and 524 thousand people, respectively. It is determined that TR90 and TR83 subregions taking place in eastern Turkey lost their position of being the second and third in 2004 to the regions taking place in western Turkey in 2017. In the studies done to determine tourists’ purposes of travel, it is seen that the number of travels with environment, culture, education, entertainment, health, business and shopping purposes increased along with sea, sand and sun tourism. Thus, it is seen that Turkey has the diversity to meet all these needs considering Turkey and its regional sources as a whole. In the policies carried out to decrease inter-regional development differences, tourism’s contribution to regional employment can be achieved by planning in line with the set goal. Also, the impact

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of tourism having activities in service industry is significant to increase women employment in order to eliminate gender inequality. For that purpose, tourism’s effect on the efforts of sustainable economic development to decrease inter-regional development disparities is determined as the subject of study. To put it more clearly, the relationship between employment, women employment and tourism used as the indicator of economical and social elements of sustainable economic development is researched on subregions basis. In line with this purpose, the study is organised as four sections. In the second section of the study, the studies related to the subject taking place in literature are examined and presented as summary. In the third section, data set and econometric method are introduced. In the fourth and last section, acquired results are examined and evaluations are made.

14.3

Literature

When studies taking place in literature are examined, it is detected that tourism’s contribution to employment is examined by both econometric methods and graphical methods based on the analysis of changes in values of variables over time or input–output analysis method. Accordingly, studies in question taking place in relevant literature are examined and presented as a summary in this part of the study. As a result of examining the studies in the literature, it is determined that the relationship between tourism and employment in Turkey was not examined on subregions basis. Therefore, the fact that this study will fill the gap in the literature suggests the importance of it. When the studies researching the relationship between tourism and employment are examined via econometric methods, it is determined that Pavlic et al. (2013) researched the relationship between tourism and employment through Johansen cointegration and Granger causality tests with quarterly data for 2000–2012 period. Findings revealed the long-term relationship between tourism and employment. In addition, a unidirectional causality relationship from tourism towards employment was detected. Dimoska (2016) estimated tourism’s impact on employment for 2002–2015 period over linear regression model. Dependent variable was indicated by total employment and total employment in food and beverage services while independent variable was indicated by the number of tourists arriving. Results acquired from both models showed that tourism affected total employment and total employment in food and beverage services positively. Similarly, Fauzel (2016) researched the relationship between tourism sector and employment in Mauritius for 1988–2014 period through VECM and Granger causality tests. Results revealed that tourism supported employment both in long and short term. Also, the results of Granger causality test detected a unidirectional causality relationship from tourism towards employment. Önder and Durgun (2008) researched the relationship between tourism and employment in Turkey for 1980–2007 period via Johansen cointegration and Engle–Granger causality test. According to the findings acquired, there was a long-term

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relationship between tourism incomes and employment. Also, the results of causality test revealed a unidirectional causality relationship from tourism towards employment. When studies researching tourism’s impact on employment are examined, it is determined that Akın (2018) examined the relationship between tourism and employment in Turkey for 1990–2017 period through data assessment method. As a result of analysing the data, it is revealed that tourism contributes to employment in Turkey in the study. Obadic and Maric (2009) evaluated the effect of tourism on women employment for 27 EU countries by including the years of 2000–2008 and the period in between. As a result of the assessments, it was determined that women employment composed 60% of total employment in 2007 in tourism accomodation sector for 27 EU countries. Also, it was determined that the rate of women employment working in hotel and restaurant sector was more than men. As a consequence, women employment was determined to be more than men employment in tourism sector comparing to other sector employees in the economy. Şit (2016) researched tourism’s contribution to employment for 2005–2014 period in direct and indirect aspect through data assessment. During the period in question, the sector was determined to be the one contributing the most to total employment, with an increase from 11 million to 16 million in the number of employees working in service sector. When the contribution of tourism taking place in service sector to employment is examined, it is revealed that there is an increase through direct contribution in particular. In other words, it is seen that tourism’s contribution to employment increased by 29% in the related period and reached 614 thousand people from 474 thousand people. It is seen that its contribution to indirect employment increased by 26% and reached to 1 million 596 thousand people from 1 million 260 thousand people. Tourism’s contribution to total employment took 58 shares from total employment through increasing by 27% in this period. Yıldız (2011) stated that the share tourism sector in total employment increased each year in 1993–2011 period except for 1995, in his study examining tourism’s contribution to employment in Turkey. It was determined that tourism’s share in total employment was 17.86% in 2011. Thus, it is stated that tourism had an important role in solving the unemployment problem. In addition, Prasad and Kulshrestha (2015) researched the relationship between tourism sector and employment in India for 2007–2008 period through input– output method. According to the findings obtained, it was stated that the expenditure of tourists arriving increased the employment of five sectors (food and beverage, transportation, travel services, accommodation and culture and recreation services) having activities in tourism sector. As a consequence, when the studies taking place in literature are examined, it is seen as the mutual result of studies that tourism supports employment despite of method differences.

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14.4

257

Data Set and Econometric Method

In the study, the relationship between tourism and employment in Turkey is researched according to Nomenclature of Territorial Units for Statistics (NUTS)4 by using annual variables including 2004–2017 period of Level 2 subregions through panel causality. Variables of total rate of employment and rate of employment by gender and the variables of total employment and total women employment that Turkish Statistical Institute published under the title of socio-economic development are used as the indicator of sustainable economic development. Data of the variables are presented in Table 14.1. All the variables in Table 14.1 are subjected to analysis by taking natural logarithm. Unit root levels of the variables are researched through Levin et al. (2002) test (LLC) used in panel data analyses commonly. H0 hypothesis of LLC test indicates that the variable carries unit root, whereas alternative hypothesis indicates that the variable does not carry unit root and is stationary. Causality relationship between variables is researched through panel causality testing suggested by Holtz-Eakin et al. (1988). The direction of causality between variables is determined over Eqs. (14.1) and (14.2) Yit ¼/0t þ

k X

/lt Yitl þ

l¼1

k X

blt Xitl þ fi þ xit

i ¼ 1. . .N; t ¼ 1. . .T ð14:1Þ

l¼1

DYit ¼

k X l¼1

/l DYitl þ

k X

bl DXitl þ Dxit

ð14:2Þ

l¼1

In Eqs. (14.1) and (14.2), i, t, fi and Δ represent cross-sectional units, time, fixed effects and differences of variables, respectively. Equation (14.2) is acquired by taking the difference between variables to remove fixed effects taking place in Eq. (14.1). In the equation where the difference is taken, there is a need for the use of instrumental variables in the estimation of equation, as ΔYit−1 is related to Δ⍵it. In the method developed by Arellano and Bond (1991), the use of lagged values of independent variables as instrumental variables is allowed through generalised method of moment (GMM) estimation. It is determined whether there is a causality relationship from independent variable towards dependent variable by applying Wald test to the coefficients of independent variables. In addition, validity of instrumental variables is tested through Sargan test. According to this, H0 null hypothesis is done as instrumental variables not related to error terms while alternative hypothesis is done as instrumental variables related to error terms. When determining the causality relationship in Wald test, testing is done in a way that there is a causality relationship from independent variable towards dependent

4

Turkey is classified as Regional Level 1 (12 regions), Regional Level 2 (26 subregions) and Regional Level 3 (81 provinces) according to the classification of NUTS.

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Table 14.1 Variables used in panel data analysis and their definitions Name of variable

Definition

Source

Tourism; total number of tourist arrivals (LT)

Number of arrival and overnights in accommodation facilities with municipal certificate: number of arrivals in facility/total and number of arrivals and overnights in accommodation facilities with Tourism establishment certificate: number of arrivals in facility/total Labour force status of non-institutional population (aged 15+): employment rate (%) Labour force status of non-institutional population [aged 15+]: employment (1000) Employment rate based on age groups (aged 15 and above—%): total/women Employment based on age groups (aged 15 and above—a thousand people): total/women

Turkish Statistical Institute Regional statistics

Rate of total employment (LRTE) Total employment (LTE) Rate of total women employment (LRTWE) Total women employment (LTWE)

variable in the null hypothesis, whereas there is a causality from independent variable towards dependent variable in the alternative hypothesis.

14.5

Econometric Findings

Before researching the relationship between tourism and employment in Turkey on subregions basis by panel causality testing, stationary levels of variables are examined by Levin, Lin and Chu panel unit root test and results are presented in Table 14.2. As seen in Table 14.2, variables are detected to be stationary both at level and first difference. Results of Holtz-Eakin et al. (1988) panel causality test used to research the relationship between total employment and rate of total employment and tourism in Turkey on subregions basis can be seen in Table 14.3.

Table 14.2 Levin, Lin and Chu unit root test results Variables

Level Fixed

Fixed-trended

Difference Fixed

Fixed-trended

−8.62349a −17.7179a −14.6297a LT −7.79544a a a a LRTE −3.87599 −5.01088 −12.6638 −11.6203a LTE −1.31285b −4.85577a −12.9643a −11.4604a a a a LRTWE −4.10163 −7.05344 −12.1961 −11.8478a a a a LTWE −2.62830 −6.33493 −12.9343 −11.8873a Note Optimal lag length is determined according to Akaike Info Criterion (AIC) a,b Respectively indicate significance at the level of 1 and 10% statistically

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Table 14.3 Panel causality test results of total employment models Independent variable

Dependent variable DLTE DLT

Independent variable

Dependent variable DLRTE DLT

DLTE(-1)

0.873815a (0.071971) −0.098991c (0.058255) 0.101517 (0.075176) −0.001299 (0.012510) DLTEi = 0, i = 1, 2 2.751038

DLRTE(-1)

0.567001a (0.154751) −0.106371b (0.048687) 0.066880c (0.037784) −0.005170 (0.013156) DLRTEi = 0, i = 1, 2 7.526589b

DLTE(-2) DLT(-1) DLT(-2) H0

0.820119b (0.383040) 0.014275 (0.065996) 0.671738a (0.189199) −0.073442 (0.098173) DLTE = 0, i = 1, 2 7.508484b

DLRTE(-2) DLT(−1) DLT(-2) H0

0.737196c (0.403110) −0.159642b (0.071748) 0.984390a (0.093271) −0.027386 (0.090581) DLTEi = 0, i = 1, 2 15.22483a

Wald test Wald test v2 statistics v2 statistics Result U DLTE ! DLT Result DLRTE $ DLT Sargan test 0.337333 0.337827 Sargan test 0.370724 0.979899 P-value P-value a,b,c Indicate significance at the level of 1, 5 and 10%, respectively, while parenthetical values indicate standard deviation value Fixed, LTEit−l, LRTEit−l and LTt−l, l = 2 … 5 are used as instrumental variables in GMM estimation. $ indicates a bidirectional causality between variables and u indicates no causality relationship between variables

When Table 14.3 is examined, Wald test statistics in the model where dependent variable is DLTE revealed that there is a causality relationship from DLTindependent variable towards DLTE by rejecting H0 at the significance level of 5% statistically. However, when results of the model where DLT-dependent variable are analysed, Wald test statistics showed that there is no causality relationship from DLTE towards DLT by not rejecting H0. Therefore, it is determined that there is a unidirectional relationship from DLT towards DLTE. Similarly, Wald test statistics in the model where DLRTE is the dependent variable revealed a causality relationship from DLT towards DLRTE by rejecting H0 at the significance level of 10% statistically. When Wald test statistics are examined in the model where DLT is the dependent variable, it is determined that there is no causality relationship from DLRTE towards DLT by not rejecting H0. As a consequence, a unidirectional causality relationship from DLT towards DLRTE is detected. Also, Sargan test results revealed the validity of instrumental variables. Results of Holtz-Eakin et al. (1988) panel causality testing used to research the relationship between total women employment and rate of total women employment and tourism in Turkey on subregions basis can be seen in Table 13.4. When the data taking place in Table 13.4 are examined, Wald test statistics in the model where dependent variable is DLTWE revealed a causality relationship from DLT-independent variable to DLTWE by rejecting H0 at the significance level

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Table 14.4 Panel causality test result of total women employment models Independent variable

Dependent variable DLTWE DLT

Independent variable

Dependent variable DLRTWE DLT

DLTWE(-1)

0.642172a (0.145876) −0.143788a (0.016669) 0.287597a (0.049644) 0.037186 (0.060217) DLTWEi = 0, i = 1, 2, 3 36.45416a

DLRTWE(1) DLRTWE(2) DLT(-1)

0.766692a (0.087479) −0.090161a (0.027519) 0.087875 (0.064310) −0.021642 (0.040035) DLRTWEi = 0, i = 1, 2, 3 2.501951

DLTWE(-2) DLT(-1) DLT(-2) H0

0.006966 (0.052209) −0.107471a (0.028624) 1.114290a (0.094930) 0.019671 (0.101365) DLTEi = 0, i = 1, 2, 3 27.21182a

DLT(-2) H0

0.178400b (0.105682) −0.100582a (0.034624) 0.955786a (0.071748) −0.015808 (0.099885) DLTEi = 0, i = 1, 2, 3 16.07345a

Wald test Wald test v2 statistics v2 statistics Result DLTWE $ DLT Result DLRTWE ! DLT Sargan test 0.560106 0.413072 Sargan test 0.429192 0.466199 P-value P-value a,b Indicate significance at the level of 1 and 10%, respectively, while parenthetical values indicate the standard deviation value Fixed, LTWEit−l, LRTWEit−l and LTt−l, l = 2 … 5 are used as instrumental variables in GMM estimation. $ shows a bidirectional causality relationship between variables while ! shows a unidirectional causality

of 1% statistically. Moreover, when results of the model where DLT is dependent variable are analysed, Wald test statistics determined a causality relationship from DLTWE towards DLT by rejecting H0 at the significance level of 1% statistically. Consequently, there is a bidirectional causality relationship detected between DLTWE and DLT. Moreover, in the model where DLRTWE is dependent variable, a causality relationship from DLT to DLRTWE cannot be detected by Wald test statistics not being rejected statistically. Wald test statistics in the model where DLRTWE is dependent variable revealed that there is a causality relationship from DLRTWE to DLT by rejecting H0 at the significance level of 1% statistically. Thus, there is a unidirectional causality relationship detected from DLRTWE to DLT. Also, Sargan test results revealed the validity of instrumental variables.

14.6

Conclusion and Discussion

Turkey’s western regions being more advanced than eastern regions causes various problems like economic and social ones. In a more explicit saying, problems such as unemployment, immigration, unplanned urbanisation, inadequate education and access to health services, income inequalities per capita, etc. underlie economical and social problems. Furthermore, the concept of sustainable economic

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development supports policies that make reaching equal rights easier both for today’s generation and the next generations by pioneering in planning activities that can be done to eliminate economic and social inequality. Therefore, policies to be applied to reduce differences of regional inequalities will support the reduction of socio-economic development differences. From this point of view, tourism will take an important role in reducing the differences in subject by causing each region to become a centre of attraction preferred by tourists in a way to move ahead of its components with its distinctive features. An increase in tourist arrivals in the region will increase region’s income depending on expenditure of tourists. Thus, investments to meet tourists’ demands will create new job opportunities. Accordingly, development of tourism having activities in service sector in the regions which have limited job opportunities will increase the need and demand for human resources and support employment by boosting new job opportunities. For this purpose, relationships between employment and tourism in Turkey for 2004–2017 period are examined on 26 subregions basis in the study. Causality relationships between total employment, rate of total employment, women employment and rate of total women employment and the number of tourists arriving are researched through panel causality testing. According to the findings acquired, there is a unidirectional causality relationship detected from employment towards tourism and a bidirectional causality relationship between the rate of total employment and tourism. Moreover, there is a bidirectional causality relationship determined between total women employment and tourism while there is a unidirectional causality relationship determined from the rate of total women employment towards tourism. To evaluate all the results as a whole, it can be said that the bidirectional causality relationship between tourism and employment shows that there is a feedback relationship between the variables. Tourism contributes to employment as it is a labour-intensive sector. Also, development of tourism contributes to all the economy directly and indirectly. Its feature supporting women employment which is disadvantageous especially in employment contributes to social gender equality and the principle of equal rights in economic development. Accordingly, it seems like increasing touristic activities in eastern regions will play an important role in eliminating inter-regional inequalities. However, rate of employment being higher in western regions than eastern regions requires people looking for jobs to immigrate to these regions. Thus, highlighting attractive features of touristic regions and distinctive features of each region attracting tourists to those regions will contribute to employment supported by tourism on regional basis. Turkey should speed up the investments in regional tourism applications among its efforts to reduce regional development differences and regional employment differences by using available sources effectively.

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Dilek Tandoğan was born in Germany in 1977; she completed her primary, secondary and high school education in Trabzon. She started her studies at the Black Sea Technical University, Faculty of Economics and Administrative Sciences, Department of Economics. In 2006, she started as Lecturer at the Black Sea Technical University, Vakfıkebir Vocational School, Department of Banking and Insurance. She completed her master’s degree in the Department of Labour Economics and Industrial Relations at the Black Sea Technical University in 2005. In 2012, she completed her doctorate at the Black Sea Technical University, Institute of Social Sciences, Department of Economics. She served as Head of Department between 2005 and 2008. Between 2010 and 2015, she served as Assistant Director. She served to as Assistant Associate Professor between 2015 and 2018 in the Black Sea Technical University Tourism and Hospitality Vocational School. Dilek TANDOĞAN, who still continues to serve as Assistant Associate Professor at the Trabzon University Tourism and Hospitality Vocational School, is married, and a girl’s mother.

Index

A Accountability, 4, 6, 17, 46, 51, 52, 56, 84, 145, 185 Accounting, 3–7, 46, 53, 55, 56, 185, 229 Achieve, 26, 29, 33, 54, 71, 85, 98, 169, 177, 185, 218, 225, 227–229, 235, 240 Achievement, 83, 84, 86, 147, 154, 160, 183, 184, 239 Action, 4, 6, 15, 26, 62–64, 85–88, 104, 106, 121, 141–143, 147, 154, 156, 162, 179, 185, 219, 223, 225, 229, 230, 236–240 Activity, 4, 8, 14, 15, 17–19, 30, 36, 37, 45, 46, 49–56, 85, 87, 89, 98, 141–154, 156, 157, 164, 174, 175, 180, 198, 199, 201–203, 225, 227, 230, 231, 233, 237, 239, 240, 243, 244, 250–252, 255, 256, 261 Actor, 37, 82, 237 Administer, 83 Agriculture, 47, 62, 64, 66, 68, 70, 71, 83, 88, 89, 154, 179, 181, 236, 252 Allegation, 82, 85, 208, 209 Animal, 62, 82 ANJT, 89, 93, 94, 96, 97 Annual Report (AR), 81, 88–91, 93, 96, 98, 99, 175 Appoint, 82 Area, 4–6, 18–20, 27, 33, 47, 48, 51, 53, 54, 63–66, 74, 85, 92, 94, 95, 115, 126, 142, 143, 145, 156, 159, 160, 162–166, 168, 169, 174, 175, 177, 178, 180, 181, 184–186, 189, 194, 229, 230, 232, 239, 242, 251 Association, 31, 83, 106, 144, 156, 173, 184, 240

Astra Agro, 82, 89 Authority, 4, 19, 81–83, 86–90, 92–95, 97, 100, 104, 107, 141–143, 157, 168, 203, 217 Award, 98 B Background, 81, 93, 115, 163 Balkan, 173–175, 177–179, 183, 184, 186, 189 Banking, 176, 194, 196–199, 202, 252 Board, 3, 5–7, 82–85, 87, 88, 92, 93, 96–99, 154, 185, 208, 209, 212–214, 243 Brands, 16, 50, 51, 83 Business, 3–7, 13, 14, 16–22, 26, 28, 33, 45–57, 70, 73, 74, 76, 82, 84, 86, 88, 89, 94, 95, 141–148, 153, 155–158, 173–177, 179–181, 185, 186, 189, 196, 208, 209, 211, 213, 217, 219, 221, 225, 226, 228, 229, 232–244, 252, 254 BWPT, 89, 90, 93, 95–97 C Categorization, 81, 90 CBTR, 196 Certification, 81, 83, 85, 95, 98, 99, 147 CFO, 6, 88 Characteristic, 29, 31, 70, 71, 74, 81, 86, 87, 90, 92, 93, 97, 100, 105, 108, 109, 113, 122, 129, 141, 228, 243 Chief, 82, 84, 94, 96, 115, 178 Chief Sustainability Officer (CSO), 82–88, 90, 92, 100 Classification, 6, 56, 81, 88, 90, 91, 93, 141, 202, 213, 257

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266 Commission, 30, 47–49, 51, 63, 83, 143, 157, 210, 241, 251 Commitment, 4, 21, 37, 82, 83, 85, 86, 99, 100, 105, 146, 156, 160, 177, 180, 230, 238, 239, 241 Committee, 6, 7, 83, 84, 88, 92, 93, 96, 97, 99, 181, 240, 242 Company, 3–8, 14, 16–19, 21, 22, 25–28, 30, 32–35, 41, 51, 73, 75, 81–100, 107, 128, 141–145, 147, 148, 153–157, 175, 185, 208, 212, 213, 238, 241, 243 Compliance, 19, 81, 83, 85–88, 90, 92, 94, 98, 99, 145, 175 Concern, 13, 35, 84–86, 88, 143, 145, 173, 181, 218, 229, 230 Conclusion, 229 Conduct, 81–85, 87, 93, 98, 103, 154, 234 Conflict, 55, 82, 106, 126, 163, 168, 186, 217, 219, 223, 232 Connection, 27, 33, 83, 173, 241 Consequence, 3, 45, 56, 82, 161, 174, 184, 229, 256, 259 Content analysis, 81, 88–90 Contribution, 17, 19, 27, 28, 33, 41, 45, 46, 61, 62, 82, 141, 142, 155, 157, 173, 174, 226–228, 230, 232, 236, 242, 243, 250, 252, 254–256 Corporate, 6, 7, 14, 15, 17, 21, 22, 45, 49–57, 82, 84, 85, 87, 89, 94, 95, 141–146, 156, 185, 186, 193, 204, 238, 240–243 Corporate governance, 3, 4, 6, 7, 45, 50, 55, 82, 84, 85, 144, 145 Corporate social responsibility, 3, 45, 50–53, 57, 94, 96, 141–145, 147, 157 D Damage, 7, 8, 15, 50, 76, 82, 83, 220 Data, 30, 31, 55, 73–77, 87–89, 92, 93, 97–99, 142, 148, 165, 166, 168, 170, 181, 184, 189, 196, 199, 200, 202, 208, 210, 213, 215, 217, 221, 222, 225, 229, 234, 235, 244, 253, 255–257, 259 Decision, 5–7, 34, 35, 37, 38, 40, 41, 46, 49–52, 56, 75, 77, 87, 88, 90, 98, 100, 104, 115, 121, 126, 158, 163, 168, 169, 174, 178, 180, 181, 212, 228, 229, 231, 240, 245 Decrease, 37, 46, 51, 74, 99, 148–150, 152, 153, 158, 173, 186, 189, 194, 198, 200, 202, 217, 233, 234, 250, 254, 255 Decree, 83 Deforestation, 4, 8, 82

Index Degree, 25, 26, 32, 90, 120, 142, 163, 209, 219, 228 Demonstrate, 17, 21, 35, 82, 143, 166, 194, 200–202, 236 Department, 3, 88, 94–96, 162, 178, 201, 238, 250 Deposit, 156, 193–197, 200–202, 204 Destroy, 83 Destruction, 82, 83 Development, 5, 7, 8, 13–15, 17–19, 21, 25, 27–29, 33, 34, 45–49, 51, 54, 56, 61–72, 75, 76, 85, 88, 92, 94, 95, 97, 98, 105, 141–143, 145–148, 154–157, 159, 160, 168, 169, 173, 174, 176, 177, 180, 183–187, 193–196, 198, 199, 202, 203, 211, 217, 221, 223, 225, 226, 229–234, 237–244, 249–252, 254, 255, 257, 261 Directors, 84, 85, 87, 90, 92, 94–98, 144, 161 Disclosure, 5–7, 53, 54, 83, 103, 106, 107, 115, 121, 128, 143, 175 Driven away, 82 Duties, 82, 98, 99, 103, 120, 163, 196, 233 E Educate, 82, 241 Education, 4, 17–19, 21, 29, 30, 32, 48, 49, 64, 92, 97, 107–109, 115, 121, 123–128, 130–132, 134, 141–143, 145, 146, 148, 152–155, 157, 160, 161, 168, 176, 178, 184, 186, 199, 208, 210, 221, 225, 235, 236, 239, 240, 242, 244, 254, 260 Educational, 81, 93, 115, 148, 168, 173, 180, 181, 208, 221 Effectively, 17, 20, 52, 83, 85, 200, 207, 221, 223, 239, 261 Effectiveness, 21, 28, 33, 35, 81, 84, 144, 147 Efficiency, 7, 26, 28, 29, 33, 55, 63, 66, 76, 77, 83, 86–88, 90, 92, 98, 99, 142, 146, 154, 168, 181, 231, 234 Effort, 6, 13–15, 21, 85–87, 98, 105, 144, 153, 155, 156, 174, 175, 218, 230, 241, 242, 250, 252, 255, 261 Electronic, 30, 69, 70, 81, 88 Emission, 3–5, 8, 28, 33, 63, 71, 73, 82, 83, 153, 154 Employee, 8, 19, 35–37, 45, 49, 53, 54, 87, 88, 92, 97, 103–108, 114, 115, 120–134, 146, 151, 154, 156, 175, 178, 202, 210, 214, 233, 241, 242, 256 Engage, 16, 20, 71, 81, 85, 86, 98, 99, 169 Entrepreneurship, 21, 180, 181, 225–228, 232–235, 237–239, 241–244

Index Environment, 4, 8, 13–15, 19, 26–28, 33, 46–53, 56, 63, 71, 75, 77, 84, 86, 89, 93–96, 106, 144, 146, 154, 156, 163, 173, 185, 196, 198, 204, 209, 219–221, 228, 237, 239, 243, 244, 249, 254 Environmental, 3–8, 14–16, 19, 26–28, 33, 45–49, 51–56, 62, 65, 71, 74, 82–86, 89, 99, 106, 143, 145, 146, 153, 156, 230, 239, 250, 251 Environmental committee, 82–85 Establishment, 83, 144, 157, 168, 227, 252, 258 European, 26, 28, 33, 82, 143, 156, 157, 160, 163, 180, 210, 241, 250 Executive, 6, 8, 30, 84, 106, 114, 208 Experience, 25, 32, 36, 66, 76, 81, 83, 93, 105, 115, 143, 163, 186, 194, 196, 197, 218, 225, 229, 234, 236, 244 Expertise, 85, 120, 238 Exploration, 82 External, 6, 7, 52, 56, 84–86, 88, 92, 94, 97, 106, 112, 113, 115, 121, 128–130, 132, 134, 153, 175, 199, 200, 236, 250 External debt, 200 Extinct, 82 F Factor, 4, 28, 30–33, 49–51, 54, 62, 71, 77, 87, 100, 104–106, 108, 111–113, 116, 155, 159, 160, 168, 186, 194, 199–202, 217, 218, 220, 226, 228, 234, 241, 242, 250, 251 Failure, 4, 74, 82, 164, 194, 230, 231 Fault, 82 Financial system, 143, 193, 194, 198, 201, 204 Firm, 4, 14, 15, 50, 55, 56, 73, 77, 82–85, 106, 141, 175, 193, 204, 208, 226, 229, 233, 234, 239, 243, 244 First, 15, 17, 27, 30, 39, 45, 47, 49, 51, 53, 55, 56, 61–73, 82, 87, 89, 104, 106, 107, 110, 126, 144, 145, 153, 155, 156, 160, 164, 173, 175–177, 179, 184, 194, 208, 213, 221, 226, 227, 229, 230, 232, 234, 236, 249, 250 Foreign, 15, 82, 179, 195, 196, 199–203 Forest, 15, 48, 63, 82, 230 Formal, 87, 106, 111, 113, 115, 121, 129, 131, 133, 134, 181, 234 Forms, 53, 81, 88, 142, 145, 161, 163, 183, 228

267 Framework, 4, 21, 34, 38, 41, 63, 81, 90, 92, 108, 141–143, 155, 180, 184, 186, 213, 229, 230, 239, 244, 245 Function, 27, 28, 33, 56, 64, 75, 81, 84, 94, 95, 106, 145, 194, 196, 204, 207 Fundamental, 6, 29, 34, 62, 66, 77, 85, 88, 159–161, 163, 177, 185, 228, 230, 231, 236, 239, 244 G Gender, 64, 108, 109, 122, 129, 159–163, 168, 173–175, 177–181, 183–186, 207–217, 221, 222, 225, 227–234, 237–244, 257, 261 Gender and Development (GaD), 231, 232 Gender inequality, 173, 184–186, 189, 208, 243, 255 Gender inequality index, 174, 184, 186, 188 Governance, 3, 5, 6, 17, 21, 37, 62, 82, 84, 85, 98 Great depression, The, 193 Green, 27, 28, 33, 34, 62, 71, 76, 87, 154, 251 Green House Gas (GHG), 8, 82, 83 H Halkbank, 196, 203 Hierarchy, 81, 82, 84, 85, 87, 88, 90, 93, 98 Hire, 81 Hope, 82, 223 I Illustration, 5 IMF, 184, 200 Impact, 4, 5, 17–21, 26–28, 41, 53, 54, 83, 87, 88, 100, 142, 143, 145–152, 157, 160, 162, 167–169, 207, 208, 214, 219, 220, 229, 232–235, 237, 244, 252, 254–256 Importance, 25, 26, 34, 41, 45–47, 50, 51, 53, 54, 61, 62, 73, 83, 85, 99, 126, 141, 143, 161, 174, 176, 193, 200, 210, 229, 249, 250, 255 Income, 28, 33, 71, 77, 82, 147, 174, 181, 183, 193, 196, 199, 204, 221, 226, 231, 233, 234, 236, 243, 244, 250, 252, 256, 260, 261 Increase, 3, 4, 26, 34, 41, 46, 48, 50–53, 56, 62, 69, 74, 77, 82, 103, 115, 121, 126, 145, 148–152, 154, 158, 162, 167, 170, 173, 178–180, 183, 185, 186, 194, 196, 198–202, 204, 208, 213, 231, 236, 240, 244, 249, 250, 252, 255, 256, 261

268 Indicator, 26, 27, 33–35, 48, 56, 84, 142, 144, 147, 174, 177, 178, 183–185, 196, 208, 213, 214, 221, 242, 255, 257 Indigenous, 82, 238 Indonesia, 3, 81, 89 Indonesia Sustainable Palm Oil (ISPO), 81, 83, 85, 94, 96, 98, 99 Issue(s), 3–8, 16, 17, 28, 31, 36, 45, 49, 51, 53–57, 82, 91, 92, 97, 98, 99, 102, 143, 145, 161–165, 168, 174, 175, 189, 207, 218, 224, 227–229, 231, 237–239, 242, 250 Industrial, 3, 15, 18, 61–66, 70, 71, 74, 75, 77, 88, 144, 155, 157, 211, 235, 239 Industries, 4, 15, 17, 30, 70, 72, 81–83, 99, 125, 126, 179, 211 Industry 1.0, 61, 63–67 Industry 2.0, 63, 66, 68, 70 Industry 3.0, 63, 70–72 Industry 4.0, 61, 63, 73, 74, 76, 77 Industry Revolutions, 3, 61–66, 70, 71 Information, 5–7, 25, 28, 30, 32, 33, 36, 37, 45–47, 49, 53–56, 66, 70, 75, 76, 89, 90, 93–95, 105, 106, 121, 141–143, 147, 158, 165, 166, 168–170, 194, 203, 225, 229, 230, 236, 240, 241, 250, 251 Initiative, 16, 18, 19, 29, 55, 86, 87, 144, 145, 153–155, 157, 161, 173, 176, 185, 189, 210, 218, 238, 240, 241 Innovation, 21, 26, 28, 32, 55, 63, 64, 66, 83, 86, 88, 90, 98, 99, 147, 194, 198, 226, 227, 234–236, 242, 244 Integrated, 6, 7, 18, 19, 21, 53, 55, 56, 69, 70, 75, 88, 231 Interest rate, 193, 197, 200, 201 Internal, 6, 28, 31, 33, 67–70, 73, 85, 94, 106, 110, 112, 113, 115, 121, 126, 128–130, 134, 145, 163, 175, 220 Interview, 90, 100, 165, 166 Izmir Economic Congress, 194 J Job, 35, 87, 115, 128, 145, 149, 157, 180, 181, 208, 216, 226, 227, 234, 242, 250, 252, 261 L Land, 3, 4, 8, 82, 225, 233 Lean construction, 25–35, 38, 39, 41 Lean management, 25–27, 30, 32, 33, 41 Legal, 55, 81, 85, 99, 103, 156, 160–163, 165, 167, 169, 203, 227, 245 Legitimacy, 85, 86

Index Level, 6, 8, 14, 15, 17, 18, 21, 26, 27, 32, 37–39, 49, 55, 56, 62, 82, 84, 85, 88, 90, 93–96, 98, 99, 104, 105, 110, 115, 121, 123, 124, 126–128, 130–132, 141–146, 148, 149, 152, 156, 157, 160, 161, 163, 165, 167, 168, 174, 181, 183, 185, 194, 197, 210, 219, 221, 223, 229, 231, 233, 234, 236, 237, 239, 241, 243–245, 249, 257, 258–260 Listed, 7, 16, 17, 81, 88, 174, 212–214 London Sumatra (LSIP), 82, 89, 93, 95–97 Long-term, 4, 17, 19, 37–39, 49, 86, 144, 148, 193, 196, 198, 199, 204, 243, 255 M Mail, 30, 81, 88, 165 Majority, 17, 32, 81, 82, 99, 106, 115, 120, 210 Manage, 5, 19, 48, 52, 82, 84, 85, 146, 193, 204, 234, 244 Management, 3, 5–8, 16, 18, 19, 26, 27, 29, 32, 34, 38, 41, 46, 47, 50–52, 54, 56, 63, 73, 84, 85, 89, 92–97, 99, 103, 115, 120, 121, 126, 128, 144, 145, 147, 153, 156, 163, 173, 179, 181, 186, 203, 207, 213, 217, 230, 233, 240, 243 Manager, 6, 32, 34, 36, 46, 51, 82, 84, 85, 94, 95, 104, 106, 115, 145, 147, 154, 181, 213, 216, 217, 243 Mark, 90, 91 Marketplace, 86, 238 Material, 4, 5, 8, 21, 26, 28–30, 33, 35–37, 45, 62, 66, 74–77, 87, 92, 97, 98, 146, 155, 156, 160, 165, 169, 231, 238 Measurement, 31, 86, 119, 144, 145, 174, 199 Mechanisms, 62, 77, 82, 84, 85, 121, 160, 161, 181, 201 Method, 7, 26, 29–31, 56, 62, 68, 73, 81, 84, 90, 91, 128, 141, 142, 165, 170, 177, 240, 249, 251, 255–257 Methodology, 27, 29, 35, 88, 107, 165, 170, 216, 217, 219 Middle, 85, 93–96, 109, 123, 127, 130–132, 150, 157, 176, 213, 234, 236, 243, 244 Middle management level, 81, 82, 84, 87, 93 Ministry, 15, 83, 125, 155 Model, 17–21, 26, 27, 29–31, 33, 34, 37, 41, 48, 50, 55, 68, 73–75, 84, 90, 105, 108–110, 114, 119, 121, 122, 144, 145, 153, 158, 169, 199, 210, 255, 259, 260 Modification, 90 N Names, 17, 32, 82, 84, 87, 89, 93, 94, 96, 98, 169, 227, 258

Index O Obligation, 85, 114, 145, 197 OECD, 21, 200, 226, 240, 242, 243, 251 Officer, 82, 84, 85, 93, 95, 98–100, 167 Operation, 8, 15, 17–20, 32, 36, 49, 52, 53, 56, 74, 75, 84–86, 95, 96, 99, 106, 143, 145, 175, 178, 185, 201, 238 Opportunity, 5, 21, 28, 33, 41, 47, 48, 50, 54, 57, 71, 74–77, 86, 105, 148, 166, 170, 174, 181, 185, 204, 208, 227–231, 233, 238, 240, 250, 252, 261 Organization, 4, 5, 14, 29, 30, 34, 49, 55, 62, 70, 76, 82, 84–88, 90, 92, 97–99, 103, 104, 106, 114, 115, 126, 142, 144, 146, 147, 155, 164, 175–178, 185, 186, 196, 204, 207, 213, 216, 218, 219, 222, 223, 226, 236–242, 244 Organization structure, 87, 89, 98 P Palm oil, 81–85, 88–90, 92–94, 97–99 Panel causality, 249, 257–261 Panel unit root test, 258 People, 4, 6, 17–21, 35, 38, 39, 48, 52, 62, 63, 65, 73, 75, 77, 82, 83, 87, 95, 128, 146, 148, 150, 153, 156, 157, 159, 180, 194, 202, 204, 207–209, 217, 218, 223, 226, 232, 234, 236, 238, 252–254, 256, 258, 261 Percentage, 31, 34, 90, 99, 178, 181, 208, 211, 213, 214, 234 Performance, 16, 27, 33, 34, 46, 48, 50–54, 56, 57, 83, 86, 141, 142, 185, 208, 215, 229, 243 Person, 29, 35, 67, 82, 87, 91, 92, 95, 98, 106, 147, 160, 163, 167, 177, 198, 203, 217, 218, 228, 232, 238 Philanthropic, 98 Planet, 21, 63, 82, 185, 226, 236, 245 Plantation, 83, 88–90, 92, 94 Policy, 5, 8, 15, 16, 22, 35, 47, 85, 98, 99, 115, 143, 147, 153, 155, 156, 174, 180, 185, 186, 193, 198, 200, 203, 204, 221, 225, 226, 229–232, 237–242, 244, 249, 254, 261 Practice, 4, 6, 14–17, 21, 25–35, 38, 41, 49–51, 56, 71, 76, 86, 98, 106, 141–145, 147, 153, 157, 159, 161, 164, 165, 167–169, 175, 201, 216–219, 225, 232, 238, 239, 241, 243 Presences, 83 Problems, 3, 6, 7, 14, 35, 36, 38, 39, 45, 46, 51, 54, 63, 75, 82–85, 99, 147, 160, 164,

269 169, 174–176, 193, 198, 231, 236, 244, 256, 260 Procedure, 35, 36, 84, 115, 126, 147, 153, 164, 167, 168 Production lines, 75, 82, 85 Productivity, 26, 30, 41, 48, 51, 69, 74, 103, 154, 198, 226, 231, 236, 243, 244 Program, 14, 18, 19, 21, 29, 46, 62, 76, 86, 92, 98, 146, 155, 180, 226, 229–231, 235–237, 239–241, 244 Protection, 13, 15, 48, 49, 51, 86, 146, 153–156, 163, 173, 200, 230, 238, 240 Public banks, 176, 193, 194, 196–204 Q Quality, 16, 27–30, 32–34, 36–38, 45, 47, 51, 56, 74–77, 86, 90, 146, 156, 174, 184, 202, 226, 239, 243, 250 Questionnaire, 27, 30, 31, 89, 90, 96, 98, 166, 167, 169 R Rainforest, 82, 83 Rate of total employment, 258, 261 Rate of total women employment, 258, 259, 261 Reason, 46, 54, 55, 64, 73, 85, 103, 160, 163, 165, 168, 173, 194, 199, 200, 249, 250 Region, 19, 27, 54, 82, 95, 107, 141, 142, 146–153, 155, 157, 168, 170, 174, 175, 178, 183, 215, 234, 243, 250–254, 260, 261 Regional level 2, 141, 142, 156, 257 Regulation, 4, 8, 15, 54, 73, 83, 85, 88, 99, 104, 106, 143, 147, 177, 178, 185, 208 Regulator, 160 Relation, 16, 37, 46, 47, 52, 53, 55, 83–85, 87, 88, 92–98, 110, 126, 144, 145, 159, 160, 162, 164, 183, 228, 230, 231, 249 Relevance, 5, 147, 161, 162, 168, 229, 255 Report, 3, 5, 6, 8, 14, 45–47, 49–56, 62, 63, 81–83, 87–89, 98, 107, 126, 144, 164, 173, 175, 177–181, 186, 208, 210, 212, 215, 226, 232, 233, 237, 242–244, 249, 251, 252 Reporting, 4–7, 30, 46, 53–56, 84, 87, 88, 92, 97, 98, 107, 145, 175, 185, 238 Requirement, 29, 35, 36, 53, 81, 92, 99, 143, 145, 156, 168, 202, 227 Resolution, 82, 163, 164, 237 Resources, 6, 13, 14, 16, 17, 19, 21, 26, 29, 34, 37, 41, 46–49, 52, 55, 57, 61, 62, 64, 71, 74, 77, 84, 88, 89, 96, 146, 147, 153,

270 168, 170, 179, 180, 198, 202, 221, 226, 230, 231, 237, 244, 261 Respondent, 25, 30, 32, 34, 41, 86, 164–167, 169, 170 Response, 4, 25, 30, 41, 90, 96, 98, 143, 167, 217, 219, 230–232, 237, 241, 242 Responsibility, 13, 17, 21, 22, 34, 45, 50–53, 85–89, 92, 94–96, 98, 104, 105, 114, 141–143, 145–147, 157, 186, 225, 228, 232, 233, 237 Result, 4, 8, 15, 16, 19, 25–30, 32, 47, 50, 51, 56, 63, 66, 71, 73, 83, 93, 99, 105, 110, 115, 116, 119, 121–123, 125–127, 129, 130, 141, 144, 149, 150, 152–155, 157, 161, 165, 167, 169, 170, 173, 175, 186, 197–199, 202–204, 215, 217–219, 231, 234, 238, 239, 242, 244, 252, 255, 256, 258–261 Role, 4, 7, 16, 17, 54, 56, 81–90, 92, 93, 96–100, 104, 141, 142, 144, 157, 160, 162, 176, 198, 204, 210, 216, 217, 223, 225, 226, 228, 229, 231, 232, 237, 240, 242, 256, 261 Roundtable on Sustainable Palm Oil (RSPO), 81, 85, 98, 99 Run, 18, 21, 27, 39, 46, 48, 49, 73, 82, 189, 225, 233 S Safety, 17, 19, 21, 35–37, 45, 84, 94–96, 106, 126, 146, 156, 227 Score, 32, 81, 90, 92, 93, 97, 177, 208, 216, 217, 219 SGRO, 89, 93, 95, 97 SIMP, 89, 93, 95, 97 Small-scale enterprise (MSE) sector, 232 SMAR, 89, 93, 96–98 Social, 3, 15–17, 19, 21, 26, 28, 45–56, 62, 63, 65, 66, 73, 82, 83, 85, 86, 89, 93–96, 99, 103–105, 125, 141–148, 150, 151, 153, 155–157, 160, 163, 164, 168, 170, 173, 174, 177, 180, 181, 183, 207, 208, 218, 219, 223, 227–231, 236–238, 240, 250, 251, 260, 261 Solve, 35, 83 Source, 13, 28, 64, 65, 67, 69, 72, 88, 92, 97, 99, 148, 154, 165, 184, 186, 195, 199, 200, 203, 204, 226, 231, 243, 250, 254, 258 Species, 82 SSMS, 89, 93, 96–98 Staff, 3, 7, 32, 36, 37, 85, 87, 91, 146, 154, 168, 199, 203

Index Stage, 56, 81, 83, 86–88, 90–93, 98–100, 160, 181, 225, 233, 234, 240, 244 Stakeholder, 4, 5, 19–21, 46, 47, 49, 51–55, 84–86, 88, 92, 96–98, 143, 145, 146, 175, 185, 229, 237, 238, 241, 242 Standardization, 85 Step, 30, 47, 62, 68, 71, 81, 90, 142, 144, 154, 165, 169, 173, 194, 198, 204, 223, 229 Stock, 16, 17, 37, 56, 81, 88, 175, 201 Strategy, 5–7, 14, 19, 21, 25, 28, 29, 33, 38–41, 49, 50, 63, 74, 82, 84–88, 92, 97–99, 143–145, 147, 153, 157, 179, 180, 185, 200, 201, 218, 229–231, 236, 242, 251 Structure, 6, 18, 29, 31, 32, 34, 48, 53–55, 65, 66, 70, 71, 77, 82–85, 88, 89, 93, 98, 104, 126, 147, 166, 193, 200–202, 204, 226, 227, 250 Study, 5, 6, 13, 14, 16, 21, 25–30, 32–34, 39, 41, 45, 46, 56, 81, 83–86, 88, 89, 100, 103–105, 108, 109, 120, 123, 124, 127, 128, 130–132, 141, 160–165, 169, 170, 173, 175, 185, 199, 210, 216, 217, 219, 223, 225, 228, 229, 231–234, 236, 242–244, 249, 251, 254–257, 261 Subjectivity, 90 Subordinate, 90 Subregions, 249, 252–255, 257–259, 261 Survey, 16, 30, 41, 81, 88, 108, 125, 142, 164–167, 169, 184, 216, 219, 221 Sustainability, 3, 7, 8, 13–15, 17, 19, 21, 22, 25–30, 32–34, 38, 39, 41, 45–57, 61–64, 71, 74, 77, 81–100, 143, 157, 175, 185, 193, 204, 230, 238, 239, 243, 250, 251 Sustainability governance structure, 82, 84–86 Sustainability Officer (SO), 81–90, 92–99 Sustainability-oriented strategy, 82 Sustainability practice, 82, 83 Sustainability Report (SR), 89–96, 98, 99 Sustainability stages, 82, 86, 87 Sustainable, 16, 18, 19, 21, 26–28, 33, 51, 56, 63, 76, 81, 83, 85, 103, 143–145, 154, 156, 174, 175, 193, 194, 200, 204, 226, 227, 230, 231, 239, 250, 251 Sustainable business, 16, 99, 175 Sustainable development, 4, 13–21, 26, 45, 47–49, 51–53, 56, 62, 63, 71, 141–145, 157, 225–228, 231, 236, 239, 242, 250, 251 Sustainable development goals, 4, 62–64, 99, 185, 237, 250 Sustainable economic development, 175, 249–251, 255, 257, 261

Index Symbol, 66, 68, 90 System, 6, 7, 13, 19, 27–29, 37–39, 65, 68, 69, 71–76, 86, 94, 105, 106, 143, 144, 148, 153, 164, 174, 178, 181, 183, 194, 196, 199, 201, 227, 237, 239, 240 T Table, 33, 89–91, 93, 98, 165, 166, 177, 194, 196, 231, 243, 257–259 Target, 5, 34, 50, 71, 83, 86, 143, 178, 179, 181, 208, 210, 226–228, 249 Task, 5–7, 36, 38, 39, 87, 88, 120, 141, 196, 216 Team, 31, 35–37, 62, 69, 82, 84, 93–96, 103 Technique, 27, 28, 31, 33, 34, 38, 39, 41, 67, 71, 74, 75, 90, 183, 220, 221, 231, 236, 251 Term, 21, 27, 30, 31, 37, 47–49, 51, 52, 63, 70, 76, 84, 115, 126, 143, 147, 157, 159–163, 166, 167, 169, 170, 179, 193, 194, 196, 198, 200, 204, 217, 228, 231, 233, 243, 250, 251, 255, 257 Title, 84, 85, 87–90, 92, 94, 96–98, 178, 257 Top, 8, 46, 70, 71, 76, 82, 84, 85, 87, 94–96, 115, 121, 154, 179, 211, 216, 217, 221, 233, 243 Top management level, 81, 82, 93, 95, 96 Total, 8, 27, 38, 39, 54, 90, 92, 97, 109, 115, 147, 148, 154, 159, 165, 166, 175, 178, 180, 196, 200, 233, 249, 253, 257, 258 Total employment, 54, 211, 249, 250, 254–259, 261 Total number of tourist arrivals, 258 Total women employment, 257–261 Tourism, 47, 73, 249–259, 261 Trend, 31, 82, 86, 96, 142, 143, 160, 180, 209–211, 215, 221, 251 Triangulation, 90, 92 TSI, 200

271 Turkey, 3, 46, 54, 56, 73, 108, 174–176, 181, 185, 187, 188, 193–196, 199, 200, 202–204, 208, 241, 249–261 U UNSP, 89, 93, 96, 97 V Vakıfbank, 196, 203 Value, 17, 19–21, 27, 28, 31, 33, 35, 38, 48–50, 54, 66, 68, 73, 77, 86, 110, 121, 145, 147, 148, 155, 156, 160, 174, 185, 186, 199, 207, 217–219, 221, 223, 230, 232, 233, 236, 241, 250, 251, 255, 257, 259, 260 Voluntarily, 55, 87, 105, 164 W Waste, 19, 26–29, 33–36, 41, 45, 48, 74, 106 Waste reduction, 28, 33, 88 Wealth fund, 196, 203 Women, 3, 18, 21, 64, 71, 159–170, 173–181, 183–186, 189, 207–223, 225–245, 250, 253–256, 258, 261 Women entrepreneurship, 178, 232, 233, 235, 236, 242 Women in Development (WiD), 230–232 Women rights, 174, 175, 177 Word, 47, 50, 72, 81, 87, 90, 98, 99, 215, 223, 228, 234, 250, 256 Work, 14, 17, 18, 27, 28, 31, 32, 35–37, 49, 51, 63, 65, 68, 71, 75, 76, 81, 83, 93, 98, 106, 126, 145, 154–156, 161, 165, 168, 169, 173, 174, 176, 179, 181, 185, 186, 207, 210, 211, 213–216, 218, 219, 221, 227, 228, 230, 232, 233, 235, 238–240, 242 Z Ziraat bank, 196, 203