Organizations and Performance in a Complex World: 26th International Economic Conference of Sibiu (IECS) 3030506754, 9783030506759

Table of contents :
Contents
The Dynamics of the Stock Exchange Investments After Publishing Financial Reports by the Bucharest Stock Exchange Listed Companies
1 Introduction
2 Evolution of Stock Trading for the Most Traded Five Companies Listed on BVB
2.1 Transilvania Bank (TLV)
2.2 Fondul Proprietatea (FP)
2.3 Groupe Societe Generale S.A. (BRD)
2.4 Digi Communications N.V. (DIGI)
2.5 OMV Petrom S.A. (SNP)
3 Conclusions
References
Identifying the Optimum Social Site that Could Serve eLearning Purposes: A Preliminary Analysis
1 Introduction
2 The General Typology of Social Media Platforms
3 Social Media at Global Level
3.1 The Most Popular Social Platforms Worldwide
3.2 Classifying the Top 20 Popular Social Media Platforms
4 Framework Analysis
5 Results and Discussion
5.1 Ease of Access
5.2 Ease of Use
5.3 Social Networking Facilities
5.4 Overall Results and Observations
6 Conclusions and Future Directions of Research
References
Dark Spots in Trade Theory: Early Testing Attempts
1 Theory Testing: Necessary?
2 Comparative Advantage and Wages: Balassa’s Scant Evidence
3 Testing the Factor Endowment Relevance: Leontief’s Dead End
4 Concluding Remarks
A. Appendix
Empirical Determination of International Specialization
References
Specialized Applications Used in the Mobile Application Security Implementation Process
1 Introduction
2 Literature Review
3 Applied Methodology
3.1 Analysis of Open Source Security Components for Mobile Applications
4 Methodology’s Results
5 Conclusions
References
The Impact of Cultural Orientation on the Societal Motivations of Luxury Good Consumption of IT Professionals in Sri Lanka
1 Introduction
2 Literature Review
3 Problem Statement
4 Research Objectives
5 Conceptualization (Fig. 1)
6 Hypothesis of the Study
7 Data and Methodology
8 Results and Discussion
8.1 A Subsection Sample
8.2 Pearson Correlation Coefficients
8.3 Regression Analysis
8.4 Hypothesis Testing
9 Conclusions
References
EMS Implementation: A Theoretical Process Design Approach
1 Introduction
2 Process Design: A Theoretical Approach to Organizational EMS Implementation
2.1 Process-Based Approach
2.2 EMS as Organizational Complex Process
3 Conclusions
References
Information Areas in Logistics Supply Chain Management
1 Introduction
2 Theoretical Basis of Information Area in Logistics Supply Chain Management
3 Results of Surveys on Information Area in Logistics Supply Chain Management
4 Conclusions
References
Measuring Female Entrepreneurs’ Happiness from Online Feedback
1 Introduction
2 Methodology
3 Results and Discussions
4 Conclusions
References
Modelling of Population Consumption in Conditions of Instability
1 Introduction
2 Literature Review
3 Assessment of Changes in Consumer Confidence Under the Instability Period
4 Determination of the Key Trends in the Dynamics of Household Consumption in the World
5 Modelling of Population Consumption Under Instability
6 Conclusions
References
Organizational Commitment and Entrepreneurial Intentions Among Employed Persons: Serbian Case
1 Introduction
2 Theory and Hypothesis
3 Method
3.1 Survey Instruments (Measures)
3.2 Participants and Data Collection
4 Results
4.1 Descriptive Statistics
4.2 Correlation Analysis
4.3 Regression Analysis
5 Discussion
5.1 Discussion of the Results of Correlation Analysis (Verification of Hypothesis H1)
5.2 Discussion of the Results of the Regression Analysis (Verification of Hypothesis H2)
6 Conclusions
References
Considerations on Financial Technology and the Impact on Financial System
1 Introduction
2 Considerations Regarding the Financial System
3 The Digital Development of the Financial System
4 The Impact of FinTech on Financial Services
5 Conclusions
References
Does the National Cultural Dimensions Influence on the Economic Freedom?
1 Introduction
2 Methodology
3 Data, Results and Discussion
4 Conclusions
Appendix
References
Evaluation of the Economic Values of the Heritage Buildings in the Historical Center of Bucharest Municipality
1 Introduction
1.1 Case Study Description
2 Methodology
3 Results
4 Conclusions
References
Economic Intelligence: Using Innovation to Reinvent the Business
1 Introduction
2 Economic Intelligence: A Tool for Decision Support
2.1 The Innovative Firm
2.2 Is Decision to Innovate Economic Intelligence?
2.2.1 From Intelligence to Economic Intelligence
2.2.2 Innovation and Decision-Making
3 Economic Intelligence Means Efficiency of Innovation
3.1 Absorption Capacity
3.2 Relationship Between the Interfirm Network and the Economic Intelligence
4 Conclusions
References
Corporate Social Responsibility of Large Retailers: An International Comparison
1 Introduction
2 CSR and the Retail Industry
3 Methodology
4 Findings and Discussion
4.1 Company: Internal Organization
4.2 Company: Family, Social and Stakeholders Context
4.3 Products and Assortments: Supplier Relations and Control
4.4 Products and Assortments: Products and Consumer Protection
4.5 Products and Assortments: Communication Policies
4.6 Social Commitment: Beneficence, Services for the Community, and Educational Initiatives
4.7 Environmental Commitment: Energy Savings, Emissions, Waste and Recycling
5 Conclusions, Managerial Implications, Limits and Future Research
5.1 Managerial Implications
5.2 Limitations
5.3 Future Research
References
Balneary Tourism, a Chance for Sustainable Regional Development
1 Introduction
2 Actuality and Prospects for Spa Tourism
3 Balneary Tourism in Brăila County: Between Nostalgia and Sustainable Development
4 Possibilities for Adaptation of the Romanian Spa Tourism to International Trends
5 Conclusions
References
Raising Awareness on SDGs. A Multi-Stakeholder Approach
1 Introduction
2 Sustainable Development Goals Overview
3 Key Stakeholders and Their Activities Linked to the SDGs
3.1 United Nations
3.2 Organization for Economic Co-Operation and Development
3.3 European Union
3.4 National Governments
3.5 Parliaments
3.6 Local Authorities
3.7 Civil Society Organizations
3.8 Business Sector
3.9 Academic and Research Institutions
3.10 Others
4 Conclusions
References
The Profile of the Project Manager in Academia
1 The Role and General Competencies of the Project Manager Within an Organization
2 Usual Classifications and Diversity of the Project Managers’ Competences
3 Correlations Between the Management Style, the Type of Personality of the Project Manager and the Success of the Project
4 Different Competencies of the Project Manager Depending on the Different Nature of the Organizations and Implemented Projects
4.1 Public-Private Differences
4.2 Competencies for Industry Projects
4.3 Competencies for Projects Implemented in Public Institutions
4.4 Competencies for the NGO Sector
5 The Profile of the Project Manager at Alexandru Ioan Cuza University in Iasi in Terms of Documentary Analysis
6 Qualitative Analysis: Focus Group
7 Conclusions
References
E-Government Overview: Evidence of Theoretical and Empirical Models
1 Introduction
2 From the “NPM” Theory to the Present e-Government Process: An Overview
3 Conclusion
References
Mihail Manoilescu, A Researcher Who Tipped the Development and International Trade Theory: Sketch Portrait
References
Convergence of Romanian Accounting Regulations with IFRS in the Context of Globalization
1 Introduction
2 The Need for International Accounting Harmonization
3 Comparative Analysis of Romanian Accounting Regulations and IFRS in the Process of Convergence
4 Conclusions and Future Research
References
The Direct Contribution of Tourism to the Gross Domestic Product of Romania
1 Introduction
2 The Satellite Travel Account System (TSA) and the Involvement of Tourism in the Creation of State Budget Revenues
3 Tourism Contribution to GDP Formation
3.1 Tourism Direct Gross Domestic Product (TDGDP)
3.2 TSA: Tourism Satellite Account
4 Research Methodology
5 Conclusions
References
The Influence of Intangible Assets in the Company Performance: The Case of the World’s Most Profitable Corporations
1 Introduction
2 Literature Review
2.1 Company Performance in Brief
2.2 Intangible Assets, a Paradigm Change
2.3 Methodology
2.4 Limitations
3 Conclusions
References
Circular Place Specific Innovative Solutions in a Complex and Dynamic World: Circular, Vital and Connected Local Communities
1 Introduction
2 Brief Literature Review
3 The Development of Networks of Urban Eco Labs as Integrated Place-Based on Eco-Innovative Spatial Development Strategies: Circular, Vital and Connected Cities
4 European Union and the Circular Economy: Case Study
5 Eco-Innovative Strategies and Solutions
6 Conclusions
References
Ways to Effectively Manage the Risks Associated with Transfer Pricing
1 Introduction
2 Financial and Corporate Planning and Transfer Pricing
3 Tax Inspections in the Field of Transfer Pricing and Their Implications
4 Advance Pricing Agreement, a Tool for Minimising the Tax Burden on Transfer Pricing
5 Conclusions
References
Marketing Automation Systems as Part of the Management Information Systems Evolution
1 Introduction
2 The Evolution of MIS
3 Marketing Automation Systems Within the Management Information Systems Family
3.1 Marketing Automation Perspectives
3.2 Marketing Automation Components
4 Conclusions
References
Flights Delay Compensation 261/2004: A Challenge for Airline Companies?
1 Introduction
2 Theoretical Conceptualization of Flights Delay Compensation
3 Overbooked, Delayed and Cancelled Flights: Applicable Measures for Passengers
3.1 Overbooking—Or Embarking Refusal
3.2 Cancelled Flights
3.3 Delayed Flights
4 Airlines Operational Reliability and Passenger Compensations in 2017
5 Conclusions and Recommendations
References
The Manifestation of Power: An Analysis of Ten Best Economies of the World
1 Introduction
2 Literature Review
3 Methodology
4 Analysis and Findings
5 Conclusions
Appendix 1
Appendix 2
References
Tax Burden, as Determining Factor of Tax Morale in Romania and European Union
1 Introduction
2 The Factors that Influence Taxpayers’ Tax Morale
2.1 Education
2.2 Individual and Social Norms
2.3 Fiscal Pressure
2.4 Quality and Intensity of Authority Control
2.5 Trust in Public Institutions
3 The Tax Burden in Romania vs. the EU States
4 Voluntary Compliance: A Method of Correcting Fiscal Morals
5 Conclusions
References
Tax Evasion: Part of the Underground Economy in Romania
1 Introduction
2 The Underground Economy in Romania
3 The Impact of Untaxed Revenues on Public Resources and on the Structure of Taxes and Duties
4 Labor Market and Underground Economy
5 Romania’s Attempts to Mitigate the Underground Economy
6 The EU in the Fight Against Shadow Economy and Tax Evasion
References
Segmenting Customers Based on Key Determinants of Online Shopping Behavior
1 Literature Review
1.1 Online Shopping
1.2 Online Consumer Behavior
1.3 Influences of Consumer Behavior for Online Shopping
2 Research Methodology
2.1 Measurement and Research Instrument
2.2 Sample and Data Collection
3 Empirical Analysis
4 Discussion of Results
5 Conclusion
5.1 Theoretical Contributions
5.2 Managerial Implications
5.3 Research Limitations and Future Directions for Expanding the Study
References
Presence of Severe Injuries and Financial Burden of Hospitalization: A Case of Vietnam
1 Introduction
2 Methods
2.1 Data
2.2 Study Variables
2.3 Statistical Analysis
3 Results
3.1 Descriptive Analysis
3.2 Estimation Results
4 Discussion and Conclusions
References
Causes of Public Expenditure Inefficiency and Proposals for Their Streamlining
1 Introduction
2 Public Expenditure: Indicator of Public Sector Performance
3 Causes of Inefficiency in Public Expenditure
4 Possibilities to Increase the Efficiency of Public Expenditure
4.1 Excessive Bureaucracy and Reduced Transparency
4.2 Poor Public Governance and Corruption
5 Conclusions
References

Citation preview

Springer Proceedings in Business and Economics

Ramona Orăștean Claudia Ogrean Silvia Cristina Mărginean  Editors

Organizations and Performance in a Complex World 26th International Economic Conference of Sibiu (IECS)

Springer Proceedings in Business and Economics

More information about this series at http://www.springer.com/series/11960

Ramona Orăștean • Claudia Ogrean Silvia Cristina Mărginean Editors

Organizations and Performance in a Complex World 26th International Economic Conference of Sibiu (IECS)

Editors Ramona Orăștean Faculty of Economic Sciences Lucian Blaga University of Sibiu Sibiu, Romania

Claudia Ogrean Faculty of Economic Sciences Lucian Blaga University of Sibiu Sibiu, Romania

Silvia Cristina Mărginean Faculty of Economic Sciences Lucian Blaga University of Sibiu Sibiu, Romania

ISSN 2198-7246     ISSN 2198-7254 (electronic) Springer Proceedings in Business and Economics ISBN 978-3-030-50675-9    ISBN 978-3-030-50676-6 (eBook) https://doi.org/10.1007/978-3-030-50676-6 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 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 Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Contents

 The Dynamics of the Stock Exchange Investments After Publishing Financial Reports by the Bucharest Stock Exchange Listed Companies��������������������������������������������������������������������������������������������    1 Paul-Gheorghe Băhnean and Ovidiu Constantin Bunget  Identifying the Optimum Social Site that Could Serve eLearning Purposes: A Preliminary Analysis������������������������������������������������   11 Ioana Andreea Bogoslov and Radu Mircea Georgescu  Dark Spots in Trade Theory: Early Testing Attempts����������������������������������   27 Sorin Burnete  Specialized Applications Used in the Mobile Application Security Implementation Process����������������������������������������������������������������������������������   39 Marian Pompiliu Cristescu and Julian Andreev Vasilev  The Impact of Cultural Orientation on the Societal Motivations of Luxury Good Consumption of IT Professionals in Sri Lanka����������������   51 L. D. A. D. Dissanayake  EMS Implementation: A Theoretical Process Design Approach ����������������   67 Ionuț Viorel Herghiligiu and Ioan-Bogdan Robu  Information Areas in Logistics Supply Chain Management������������������������   79 Marta Kadłubek  Measuring Female Entrepreneurs’ Happiness from Online Feedback������   91 Esra Kahya Ozyirmidokuz, Kumru Uyar, and Eduard Alexandru Stoica  Modelling of Population Consumption in Conditions of Instability ����������  101 Ganna Kharlamova, Andriy Stavytskyy, and Oleksandr Chernyak  Organizational Commitment and Entrepreneurial Intentions Among Employed Persons: Serbian Case ������������������������������������������������������������������  121 Predrag Mali, Edit Terek, and Milan Nikolić v

vi

Contents

 Considerations on Financial Technology and the Impact on Financial System ����������������������������������������������������������������������������������������  133 Monica-Ionelia Mărgărit  Does the National Cultural Dimensions Influence on the Economic Freedom?����������������������������������������������������������������������������  145 Zoriana Matsuk and Vira Shyiko  Evaluation of the Economic Values of the Heritage Buildings in the Historical Center of Bucharest Municipality��������������������������������������  159 Florentina-Cristina Merciu, Andreea-Loreta Cercleux, George-­Laurențiu Merciu, and George Secăreanu  Economic Intelligence: Using Innovation to Reinvent the Business������������  177 Liviu Mihăescu  Corporate Social Responsibility of Large Retailers: An International Comparison������������������������������������������������������������������������  189 Fabio Musso and Margherita Angioni  Balneary Tourism, a Chance for Sustainable Regional Development��������  205 Virgil Nicula and Simona Spânu Raising Awareness on SDGs. A Multi-­Stakeholder Approach ��������������������  217 Nancy Diana Panța  The Profile of the Project Manager in Academia������������������������������������������  229 Stanislav Percic and Irina Teodora Manolescu  E-Government Overview: Evidence of Theoretical and Empirical Models�������������������������������������������������������������������������������������  245 Massimo Pollifroni, Gheorghe Militaru, and Adrian Ioana  Mihail Manoilescu, A Researcher Who Tipped the Development and International Trade Theory: Sketch Portrait����������������������������������������  251 Dan Popescu  Convergence of Romanian Accounting Regulations with IFRS in the Context of Globalization����������������������������������������������������������������������  265 Daniela Pordea  The Direct Contribution of Tourism to the Gross Domestic Product of Romania��������������������������������������������������������������������������������������������������������  275 Adrian Şerban Comănescu  The Influence of Intangible Assets in the Company Performance: The Case of the World’s Most Profitable Corporations ������������������������������  285 Radu-Alexandru Șerban

Contents

vii

 Circular Place Specific Innovative Solutions in a Complex and Dynamic World: Circular, Vital and Connected Local Communities ������������������������  297 Marta-Christina Suciu, Andreas Kolodziejak, Eppe Jan Postma, and Adrian Petre  Ways to Effectively Manage the Risks Associated with Transfer Pricing��������������������������������������������������������������������������������������  313 Ileana Tache and Mihaela Paraschiva Luca  Marketing Automation Systems as Part of the Management Information Systems Evolution����������������������������������������������������������������������  325 Codrin Teiu  Flights Delay Compensation 261/2004: A Challenge for Airline Companies?������������������������������������������������������������������������������������  335 Cosmin Tileagă and Oana Oprișan  The Manifestation of Power: An Analysis of Ten Best Economies of the World������������������������������������������������������������������������������������������������������  345 Ștefan Cătălin Topliceanu  Tax Burden, as Determining Factor of Tax Morale in Romania and European Union����������������������������������������������������������������������������������������  359 Mihai Aristotel Ungureanu and Bianca Cristina Ciocanea  Tax Evasion: Part of the Underground Economy in Romania��������������������  373 Mihai Aristotel Ungureanu and Ioan Cosmin Pițu  Segmenting Customers Based on Key Determinants of Online Shopping Behavior��������������������������������������������������������������������������  385 Simona Vinerean and Alin Opreana  Presence of Severe Injuries and Financial Burden of Hospitalization: A Case of Vietnam��������������������������������������������������������������������������������������������  401 Phuong Vu and Ardeshir Sepehri  Causes of Public Expenditure Inefficiency and Proposals for Their Streamlining ������������������������������������������������������������������������������������  417 Cătălin Zeti and Loredana Andreea Cristea

The Dynamics of the Stock Exchange Investments After Publishing Financial Reports by the Bucharest Stock Exchange Listed Companies Paul-Gheorghe Băhnean and Ovidiu Constantin Bunget

Abstract  The main purpose of this paper is to highlight the cognitive value of the annual financial reports. We want to see how investor behavior changes in relation to the information published in these reports. In this respect, we chose to analyze the first five most traded listed companies on the Bucharest Stock Exchange (BVB). Certainly, investors, regardless of the stock they trade, act differently. Everyone uses his/her own calculation mode by applying different interpretations to the financial indicators or may consider differently which information is more or less relevant. However, investors can share common goals and values, central behaviors and decisions that lead to a “profit-making” universal goal. Starting from the premise that the investment decision is not a simple process of buying an object, we believe that investors need to develop complex analyzes based on the data provided by the financial reports made transparent by the companies. Keywords  Fundamental analysis · Investors · Technical analysis · Stock exchange Market

1  Introduction In the current economic context, investors’ decision to buy the shares of a listed company may be influenced by a multitude of factors. Technological progresses have greatly contributed to change the way a transactional decision is taken. Now any investor can access the data about the companies listed at the Stock Exchange in real-time directly on the mobile device, and after a simple search via internet, P.-G. Băhnean (*) · O. C. Bunget School of Economics and Business Administration, West University of Timișoara, Timișoara, Romania e-mail: [email protected]; [email protected] © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 R. Orăștean et al. (eds.), Organizations and Performance in a Complex World, Springer Proceedings in Business and Economics, https://doi.org/10.1007/978-3-030-50676-6_1

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P.-G. Băhnean and O. C. Bunget

they can find out both the history of the company they are interested in and what development plans it has for the next years. Despite the fact that the total value traded on the Bucharest Stock Exchange (BVB) has decreased in the last years (according to BVB statistics), many companies are interested in listing themselves on the capital market in order to obtain working capital. They are interested in this because of the advantages gained after taking this decision. The benefits pursued by the listed companies are: Financing, one of the main reasons the company is listed on the stock market, is to get free financing. The opposite is bank financing that is interest-bearing and requires real estate collateral (Pântea and Bodea 2011). When an entrepreneur lists a company on the stock exchange, the listing price will most often be higher than the book value (Podoabă et al. 2013; Țâțu and Șerbănescu 2013). As a result, if we assume that a company sells a 15% stake in the market, the shares can be bought on the stock market with a value that represents for example 40-50% of the total value of the company. Attracting a strategic investor that can be an investment fund, an institutional investor or a private investor with a portfolio of holdings in the field (Balteș and Ciuhureanu 2014). Always such an investor will seek to invest in companies listed on the stock market, which the market has evaluated, and which have a trading history. A company’s reputation grows if it is listed on the stock market and inspires confidence in commercial relationships (Gisberto-Chițu 2005). The most important thing is the confidence of trading partners abroad (Niculescu et al. 1998). In order to take advantage of all these benefits, the listed company must be primarily financially attractive for investors to be traded. Thus, for good information and increased transparency in terms of company development, they need to publish quarterly financial reports. These reports are made public, and each investor may use the data contained therein to calculate the indicators that may influence the decision to invest or not.

2  E  volution of Stock Trading for the Most Traded Five Companies Listed on BVB If we look at the financial reports submitted by companies as an influential factor in the trading of listed shares on the BVB, we can state that investors use this tool to make investment decisions. So, we can affirm that the fluctuations of the number of share transactions are impacted also by the annual financial statements submitted in May of each year. Below we will analyze the evolution of the transactions of the first five companies listed on the BVB, comparing December 2017 with June 2018. These months were chosen because in December some companies publish some preliminary data on the activity they had in the current year, thus investors who give importance to published data and not just to the economical speculations can be influenced by

The Dynamics of the Stock Exchange Investments After Publishing Financial Reports…

3

these data. In the opposite direction, we will review June 2018 as investors can use both the annual and semi-annual financial data in their calculations. Investors need to perform complex analyzes before transactions that most of the times need to be done quickly, as often the time is one of the most important investors’ opponents. The players from the stock markets must take and apply decisions in a short time without missing the opportunity generated by this time factor because we know the stock price is very dynamic. So, they have to buy inexpensively and sell expensive choosing the good moment, risking to not follow the basic theory if the investor’s decision is not completed when the price reaches a minimum point (the acquisition of financial securities) or the maximum (the sale of financial assets). In Tables 1 and 2 we summarize the data recorded by the most traded five companies on the Romanian stock exchange. The highest performances regarding the traded value were obtained by Transilvania Bank (BT) both in December 2017 and in June 2018. We can say that the market popularity of the bank has a direct impact on the investment decision for this company, considering also the fact that it is one of the banks that operate on the banking market in Romania with full Romanian capital. Analyzing the results obtained in the previous years by TLV, we can observe a positive trend of the bank’s development for each year, making it very attractive for potential investors. Of course, the economic growth in Romania in the recent years and the increase of the local consumption lead directly to the development of the banking sector, so TLV manages to be the most traded company on the BVB, even before the oil companies. Figure 1 underlines the evolution of traded value by comparing the values recorded by each firm in December 2017 and June 2018 (shortly after the publicaTable 1  Results after the transactions done in December 2017 Company symbol TLV FP BRD DIGI SNP

Number of shares traded in December 2017 118.5 mil 230.2 mil 6.2 mil 1.2 mil 130.0 mil

Traded value in December 2017 253.35 mil 197.08 mil 79.32 mil 41.70 mil 36.65 mil

Number of transactions in December 2017 9964 1338 1959 195 3593

Source: www.bvb.ro Table 2  Results after the transactions done in June 2018 Company symbol TLV FP BRD DIGI SNP

Number of shares traded in June 2018 53.5 mil 82.8 k 8.9 mil 824.9 k 118.6 mil

Source: www.bvb.ro

Traded value in June 2018 127.10 mil 76.17 mil 115.24 mil 26.57 mil 37.24 mil

Number of transactions in June 2018 6626 1261 2504 703 2957

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tion of the annual financial reports). If we look at the Fig. 1 we can say that the traded value halved in June 2018 compared to December 2018, the most significant decrease being recorded even in the first two most traded companies listed on the BVB (TLV - Transylvania bank and FP—Fondul Proprietatea). Considering time a factor which influences the investor, we can assume that the 2 months selected for analysis can be considered similar from the point of view of the availability and the way people behave towards business, as in December there are less than 20 working days and June is the month when the summer holidays begin. Looking at the disclosure of financial statements as the influence factor for the investor behavior, we can assert that it can have a significant impact on investors because, according to the information reported by companies, some of them have recorded increases in the global value traded in the month taken as a reference while others increased (BRD  - Groupe Societe Generale). Finally, we cannot exclude other geo-policy factors that could have generated these imbalances in the financial market but are not subject to this analysis. According to Fig. 2 the number of transactions was in a relative slight decrease in the analyzed period. TLV is on the top, being the most traded company listed on the BVB. If we want to search a relationship between the number of trades and the traded global value, we can deduce that they are not related in direct proportionality, as at some point in the financial market there may be investors with significant amounts for investments that do not speculatively make transactions and invest large amounts thus registering few stock exchanges. At the same time, there may be a reversal of the medal when the capital market has many investors who have small amounts or even speculate the stock price. Comparing the data shown in Figs. 1 and 2 the theory that affirms that the number of transactions is not proportional to the value traded for a company is con300,0 mil 250,0 mil 200,0 mil 150,0 mil 100,0 mil 50,0 mil ,0 mil

TLV

FP

Traded Value in December 2017

BRD

DIGI Traded Value in June 2018

Fig. 1  The evolution of the value traded in December 2017 and June 2018

SNP

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12000 10000 8000 6000 4000 2000 0

TLV

FP

BRD

Number of transacons in December 2017

DIGI

SNP

Number of transacons in June 2018

Fig. 2  The evolution of the number of transactions in December 2017 and June 2018

firmed. Looking at the DIGI information that recorded a decrease in the value traded in June 2018 as compared to December 2017, we could say that the interest for this company declined after the financial reports were published, but this statement is not correct because the number of trades increased by about 500 transactions in June 2018 as compared to December 2017. It is obvious that the companies listed on the stock exchange are much more advantaged by situations in which they record a low number of transactions with a significantly traded global value than the “popularity” situations when the company is very often and quickly traded but with relatively small amounts. In this respect, we recall FP, which in December 2017 registered a traded value of over 19 mil lei with a number of transactions approximately the same as in June 2018 when it registered a significant decrease reaching only 76 mil lei of traded value. For this company the value of a transaction declined a lot in June 2018 when a transaction had the value of about 60 thousand lei compared to December 2017, when the company enjoys insured stock investments of about 147 thousand lei for a transaction.

2.1  Transilvania Bank (TLV) Looking at the previous chart, we can see a significant drop in the traded value of Transilvania Bank (TLV) from 253.35 million in December 2017 to 127.10 million in June 2018, having a difference of 126.25 million. Analyzing the annual report published by TLV at the end of April 2018, TLV reports a 3.18% ROE decline from 21.52% in 2016 to 18.34% in 2017. Thus, potential investors may consider that

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return on equity use is declining over the period under review, which may continue in the future. In addition, analyzing deeply the report published by TLV, certain imbalances can be observed which can appear on the banking market in the next period, because although the company declares gross profit with 379,377m lei higher in 2017 compared to 2016, the net profit is down by 42,461m lei in 2017. Another factor that could have affected the decline in the number of transactions may be the announcement of the closure of 48 agencies and branches in 2017, as per the annual financial report.

2.2  Fondul Proprietatea (FP) Analyzing the report published by FP we notice the optimism with which the financial information is presented by highlighting the achievements of the company but also the plans, and even the promise to increase the dividend fund paid for the next year. “The economic growth and the efficiency will help to improve the return on assets and increase dividend income from the Fund. In addition, important corporate actions such as share buy-back programs and cash distributions to shareholders, as well as continuing to promote the Fund and the Romanian capital market, should allow the Fund’s VAN to be better reflected in the price action. We are confident that our active approach and the bottom-up investment process will enable us to achieve the best possible long-term results for our shareholders and we look forward to new opportunities for Fondul Proprietatea.” Even though the number of transactions remained relatively at the same level of approximately 1250 monthly transactions, the traded value dropped considerably by 42% in June 2018 compared to December 2017. A reason for maintaining the number of transactions at the same level could be the loyal customer portfolio in the analyzed period, which were not willing to invest the same amounts after the publishing the financial reports for 2017.

2.3  Groupe Societe Generale S.A. (BRD) BRD is the only company from the analyzed ones that recorded increases in both the global traded value and the number of transactions. The cognitive value of the report published by BRD has an impact on consumers of accounting information when they analyze the evolution of profits. Thus, we observe a doubling of the net profit in 2017 as compared to 2016. If we put in balance the development policies of the group, potential investors may be tempted by possible investments in BRD’s shares because the profit growth trend will continue in the year 2018. At the end of 2017, when the investors did not know the plans of the BRD group, the shares were not attractive to investors, so BRD was traded halfway in comparison to June 2018.

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2.4  Digi Communications N.V. (DIGI) Even though the number of transactions made by investors for DIGI increased by 508 transactions in June 2018 compared to December 2017, the traded total value decreased from 41.7 million lei to 26.57 million lei. Since the purpose of the article is to analyze the cognizance of published financial reports, it should be noted that the report published by DIGI is the most colorful and easy to understand compared to the other five companies. The first pages show the achievements of 2017 compared to the previous year. “We have consistently generated high income streams. We generated revenue of € 916.6 million at 31 December 2017, representing an increase of 8.8% compared to the previous year.” “The Group’s operations generated 288 million EBITDA at 31 December 2017, representing a 9.2% increase over the previous year. The adjusted EBITDA margin was 31.4% at 31 December 2017, relatively stable compared to the previous period”. Analyzing the decrease in traded value, we can see that it is directly related to the share price quoted on the BVB. Thus, the average of a DIGI share in December 2017 was 34.75 lei/share and about 1.2 million shares traded, and the average value in June 2018 was 32.2 and approximately 824 million shares were acquired. In this context, in direct relation to the cognitive value of financial reports that can influence behavior, we recall the basic law of the economy, namely the law of supply and demand. When the DIGI stock price dropped, the number of transactions increased, in this case by 360%. The company has become attractive to a larger number of investors, but they have not been willing to invest as much as in December 2017, which is not good for the listed firm even though its popularity has increased in the range of the time analyzed.

2.5  OMV Petrom S.A. (SNP) SNP is the only one of those companies that did not show major fluctuations in terms of traded value and number of transactions. The company published the financial report for 2017 on 2018, 27th of April. The annual report begins with the schematic presentation of the hydrocarbon path from extraction to the final customer. Compared to the other analyzed companies, SNP has decided to publish a table centralizing evolution in the dynamics of the main indicators, this can be associated with increased transparency towards potential investors. Analyzing Tables 1 and 2 we find that despite investments remained relatively at the same level (a 2% increase in total assets in 2017), the company recorded a significant increase in sales value, i.e. 17% in 2017 compared to 2016. The company becomes attractive in the period immediately following the publication of the annual financial report as it promises to maintain the upward trend of the dividend per share (increase of 33% in 2017).

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3  Conclusions The empirically available information on how the capital market works is the market prices formed through stock quotes and repeated transactions on the market. The market prices are relevant based on the efficiency of the stock market that determines them; it depends mainly on stock market liquidity, stock market transparency and stock market security. These three characteristics are the basis for investor confidence in the stock market transactions and the relevance of the exchange rate. On the capital market there is a direct confrontation between the total demand for the purchase of a title, represented by the total purchase orders addressed by the financial investors and the total offer for the sale of a title, represented by the total of the sales orders addressed by the companies and speculative investors who either sell due to lack of liquidity or behave speculatively In the simple fixing quote, the total demand with the total offer is confronted by orders that lead the auction to the equilibrium price, as follows: order “at the best rate” and order “at the limited course”. The company selling the financial title starts the negotiation with decreasing price variations, but not below a certain amount. This minimum limit is the initial capital invested in the title, plus a fructification, depending on the risk of holding such a title. During this time, the investor starts the negotiation with rising price variations up to a certain amount. This maximum limit is made up of the expected total future effects that anticipates being able to obtain from the ownership of that financial title. In short, the pricing principle for the sale price of a financial title is reduced to the following equation: the maximum price offered by the buyer less than or equal to the minimum price offered by the seller (Stoica et al. 2001, p.140). All of this has been briefly mentioned so that we can set the way in which the price of a share on the stock exchange can be determined in general. All transactions can be influenced by a sum of factors from geo-political to contemporary economic ones. Based on the data analyzed in this article, we can deduce that the behavior of a company’s board can primarily influence an investor by making decisions that directly affect the company’s performance, implicitly its profit margins. At the time of publishing the annual financial reports, companies not only present the balance sheet of the previous year’s activities, but most of the time even start these reports with the company’s plans for further development. All this information is meant to increase the confidence of investors who are ultimately interested in the amounts invested by them to produce addition value. After the analysis of the behavior of investors of the most traded five companies listed on the Bucharest Stock Exchange, we were able to notice significant fluctuations in terms of both the value traded for each company and the number of transactions recorded. It is normal to have variations between stock exchange data recorded from one month to the next, in this context we can remember the sensitivity of a stock exchange market to the affirmations and political decisions taken globally by the leaders of some countries.

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It is obvious that all these changes are influenced by the behavior of investors who are trading on a stock exchange, whether active or passive. Regardless of the category they belong to, they use certain financial-accounting data, whether historical or current, in order to substantiate the investment decision. As a result of analyzes of BVB data in December 2017 and June 2018, we noticed significant fluctuations of the traded value, noticing the decrease of the availability of investors to invest in financial securities. All these changes were influenced by external factors that could not provide a linearity in how an investor decides to invest. The analyses made on the data recorded in the two reference months were able to demonstrate that annual financial reports contain information that may influence an investor’s decision. Observing each report of the five companies, it was possible to get correlations between the information presented in these reports and the different way in which the investors acted in June after their publication. In this respect, we mention DIGI, which promised to increase the dividend to be distributed by increasing the dividend payment fund and by increasing the percentage of distribution of the registered profit, which generated the direct increase in the number of transactions for this company during June.

References Balteș, N., & Ciuhureanu, A.  T. (2014). Contabilitate financiară, ediția a IV-a, Standardele Internațional de Raportare Financiară, 2007. Bucharest: Editura Economică. Gisberto-Chițu, A. (2005). Contabilitatea micro și macroeconomică (2nd ed.). Bucharest: CECCAR. Niculescu, N. G., Ponta, M., & Niculescu, E. (1998). Economie Politică. Iasi: Polirom. Pântea, I. P., & Bodea, G. (2011). Contabilitate financiară. Deva: Intelcredom. Podoabă, L., Nistor, C. S., & Cârstea, A. (2013). Contabilitate financiară-Studii de caz, Ediția a V-a. Cluj Napoca: Risoprint. Stoica, V., Galiceanu, M., & Ionescu, E. (2001). Piete de capital si burse de valori. Bucharest: Editura economica. Țâțu, L., & Șerbănescu, C. (2013). Fiscalitate de la lege la practică. Bucharest: C.H. Beck.

Identifying the Optimum Social Site that Could Serve eLearning Purposes: A Preliminary Analysis Ioana Andreea Bogoslov and Radu Mircea Georgescu

Abstract  Nowadays, an increasingly attractive research domain is represented by the integration of eLearning systems with the Social Media tools. However, identifying the proper Social Media platform to serve educational purposes could be an extremely hard task, mainly due to the variations from platform to platform. Thus, the first aim of this article is to identify the optimum typology that could be successfully integrated with eLearning systems. Moving forward, a classification of the top 20 most popular Social Media sites at global level in terms of their main objectives will be required in order to asses a specific typology of each of this. Thereafter, we propose a preliminary model of comparison among the Social Media sites that comply with the identified typology. The process consists in analyzing the main perspectives on these sites, by discussing some established key points and classifying the platforms by their capacity to serve educational purposes. Keywords  Social networks · eLearning · Educational technology · Social media

1  Introduction The educational processes have by far exceeded formal boundaries, gradually moving from traditional learning to learning through technology. Concepts such as computer-­aided learning, distance learning, social learning, mobile learning and so on, are well known today and increasingly used in almost any educational institution. A synonym for all these revolutionary and continuously developed ways of

I. A. Bogoslov (*) Lucian Blaga University of Sibiu, Faculty of Economic Sciences, Sibiu, Romania e-mail: [email protected] R. M. Georgescu Alexandru Ioan Cuza University of Iași, Iași, Romania e-mail: [email protected] © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 R. Orăștean et al. (eds.), Organizations and Performance in a Complex World, Springer Proceedings in Business and Economics, https://doi.org/10.1007/978-3-030-50676-6_2

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learning is given by the notion of eLearning systems. The challenge arises when it comes to improving and expanding eLearning tools. In addition to technology, the scale and development of which cannot be challenged, Web-based instruments and, consequently, Social Media tools, have become an indispensable part of our lives. Moreover, according to the Co-Founder and Global CEO of We Are Social (McDonald 2018), it is considered that along with IoT proliferation, in the next decade Social Media will become the starting point for connecting information and transactions—alongside people. Thus, Social Media usage in education is a relatively new research area but benefiting from an increasing interest from researchers. Yet, a first step in integrating Social Media tools with eLearning systems is to understand how they work. Defining Social Media could be an extremely complex task, mainly due to the variations from platform to platform. In an attempt to explain the Social Media phenomenon, Boyd and Ellison referred to it as being a cluster of Web-based services that allow users to build public or semi-public profiles within a limited system, create a list of other individuals with whom they share a connection, and observe their list of connections, while also traversing those made by others within the system (Boyd and Ellison 2007). Although at a considerable distance of time, Hunsinger and Senft (Hunsinger and Senft 2014) exposed a similar view on what Social Media represents, considering the phenomena as being represented by all networked information services aimed to enhance through social interaction, collaborative possibilities and work. Although we have a general vision of what the Social Media represents, a more in-­ depth analysis of the subject is needed by examining the features and particularities of the large cluster of existing social services. Modern eLearning systems have gradually benefited from improvements in order to fit the requirements of current almost fully digitized society, increasingly incorporating social features, like sharing, commenting, appreciating and more. Furthermore, the development in the field led to the implementation of special platforms that could be used effectively as eLearning systems in the form of Social Media (e.g. Google Classroom, Trello, and so on). Although the progress is obvious and cannot be denied, the multitude of existing Social Media platforms and their immense offer make it extremely difficult to decide how Social Media should be integrated into educational processes to get effective learning tools. Individuals have diverse desires and needs, react differently to certain situations or to certain stimuli, which makes it very complicated to identify common services they would feel comfortable using. However, when it comes to choosing the optimum Social Media platform from the existing ones that could meet the common needs of a community, the popularity is the main starting point. Thus, as subject of this analysis we will consider the main 20 social platforms globally used, taking into account the number of active users. Limiting to this number of platforms was not accidental. According to data provided by third parties, including Statista, the other existing and globally used platforms do not exceed 100 million active users (such as Telegram). Relative to the global population of about 7 billion

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people, the analysis of the other platforms is not considered relevant to the research in question due to the large discrepancies in the number of active users. However, our consideration is that the platform popularity does not clearly indicate the potential capacity of this to be integrated into the form of eLearning tool. These platforms are found under different typologies, which again hampers the process of choice among those under analysis. Therefore, we propose a classification of the main Social Media typologies, followed by identifying the optimal typology for educational purposes. After that, the top identified platforms will be categorized by assigning the previously-analyzed typologies, and only the ones that match the optimal typology will be subject of further analysis. Thereafter, our proposed model primarily consists in establishing the key features that such a Social Media platform has to meet in order to serve the learning goals and requirements specific to the contemporary world. The framework of the analysis is based on a comparison of how the identified platforms respect these points of interest, followed by ranking them and identifying the most proper for future eLearning development.

2  The General Typology of Social Media Platforms The key technological features of social platforms are quite consistent, but the culture around them is varied. These online platforms come in different forms and can be classified into multiple ways, ranging from general classification depending on predefined application goals, to the nature and type of content created and/or distributed by users, the underlying subject interaction between people and so on. However, perhaps the easiest and most clear classification of Social Media platforms remains the one where differentiation is made according to the defining objectives of the application. Thus, according to previous research in this respect (Kaplan and Haenlein 2010; Dao 2015), but also considering the view of the authors of this paper, there have been identified the following types of Social Media technologies: • Social networks: These represent online platforms that empower the user with the ability to interact with other users, sharing common experiences and interests. Social networks do not target a specific group of users, leaving doors open for anyone and do not focus of offering particular services, trying to incorporate as many features as possible. • Instant Messaging Applications: Instant messaging systems, well known as chats, facilitates the transfer of text or media content among users. Chatting can be done with one or more people or computers simultaneously. Unlike e-mail services such as e-mail, this means of communication allows an interactive dialogue, messages being transmitted and received almost instantly. In most cases, creating and maintaining a chat account is free of charge, and sending messages only involves the costs of using the internet.

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• Media Sharing Networks: Media sharing networks offer users the possibility to find and share online media content such as images, video and live videos. Thus, unlike social networks whose purpose is to connect users in the online environment, the main and defining goal of sharing networks is to share media. However, differentiating media sharing networks from social networks is a difficult task nowadays, as a result of incorporating extra options and facilities to social networks. Among these, we can mention the possibility of producing live video content, feature available on almost every Social Media platform. • Blogs: Blogs are known as tools that ease the way to publish online content in formats that support finding information, discovering, sharing, and commenting. These networks vary from personal blog platforms to big corporate blogs, with focus on a single subject or a wide cluster of topics. • Discussion forums: A forum is an online discussion site within which users have the opportunity to chat in the form of posted messages. Thus, the purpose of the forums is to enhance interaction among users by offering the possibility to discuss various subjects of common interest. • Social Bookmarkmarking: Aims to help users discover, save, share and discuss on different content. These networks represent the focal point of creativity and inspiration, allowing users to publish, recommend and comment on any content. The functionality of social bookmarking is based on a user-defined taxonomy system for certain bookmarks. This system is often called folksonomy and consists of classifying and organizing online content in different categories by using metadata, such as electronic labels. Specific to these types of networks is that bookmarks are not stored locally in a folder on your device, labelled pages being stored on the Web and accessible from any device. • Consumer review networks: This type of network allows users to find, review, and share information about almost everything, from products, services and brands to restaurants, destinations, travel and more. Thus, review networks encourage the distribution of content that can be useful to other users, serving as a good means of information. • Sharing Economy Networks: These online means of communication, commonly referred to as collaborative economic networks, are designed to connect users to advertise, find, share, buy, sell and market products and services. The popularity of these platforms has increased significantly over the past few years as people began to trust online reviews and feel comfortable using them to measure the reputation and reliability of vendors and service providers. • Anonymous Social Networks: While the majority of social networks are making increasing efforts to keep users accountable for their social work, anonymous social networks operate totally opposite, allowing users to distribute anonymous content. Such online platforms focus on turning the confessions into content. Of course, the previous classification is quite succinct, but helps to solve a common confusion, namely that online social media communication networks are

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represented only by those sites/platforms/applications that offer users the opportunity to socialize, that is, to communicate directly with other people. Thus, it can be distinguished that a social network can be represented by any online means where users have multiple possibilities, limited to a certain extent, including c­ ommunicating, commenting, voting, appraising and distributing personal content or other users. Social networks are available to all users, regardless of their purpose, domain, or interest. Therefore, we consider the social network typology to be the most suitable for integration with eLearning systems. This consideration is based on the idea that the learning process is continuous, not targeting a particular group of users.

3  Social Media at Global Level It is not a new thing that the number of active Internet users is steadily increasing, surfing the online environment being one of the core concerns of contemporary society. Nevertheless, regarding the use of Social Media globally, the results continue to amaze us. According to the latest reports made by Hotsuite and We Are Social (DataReportal 2019), 3.48 billion people actively used Social Media in 2019, with a total increase of 9% (288 million) compared to last year. Therefore, the global preference for using Social Media is clear. However, to serve the purposes of this analysis, the further focus will be on identifying the most popular Social Media platforms and on offering a classification of these in order to distinguish which one of them meets the social network typology.

3.1  The Most Popular Social Platforms Worldwide The popularity of a social platform is definitely given by the number of active users. According to Statista’s public statistics (Statista 2019), in January 2019, among the most popular networks around the world, ranked by the number of active users (in millions) include Facebook, YouTube, WhatsApp, Facebook Messenger, WeChat, Instagram, QQ, QZone, Douyin/Tik Tok, Sina Webo, Reddit, Twitter, Douban, LinkedIn, Baidu Tieba, Skype, Snapchat, Viber, Pinterest, LINE. Their classification could be illustrated as follows (Fig. 1): As it can be easily observed, the market leader was Facebook, the first social network that exceeded 2 billion registered accounts, with about 2.27 billion monthly active users. YouTube reached the second position in the preferences list, with 1.9 billion active users per month, while WhatsApp Instant Messaging has recorded 1.5 billion monthly active users. The sixth place is the Instagram photo sharing application, with 1 billion active monthly accounts.

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2500

2271

2000 1500

1900 1500 1300

1000

1083 1000 803 531 500 446

500

330 326 320 303 300 300 287 260 250 194

0 Facebook

YouTube

WhatsApp

Facebook Messenger

WeChat

Instagram

Tencent QQ

QZone

Douyin/Tik Tok

Sina Weibo

Reddit

Twitter

Douban

LinkedIn

Baidu Tieba

Skype

Snapchat

Viber

Pinterest

LINE

Fig. 1  The most popular social platforms worldwide, ranked by number of active users (in millions)—Data from Statista—The Statistics Portal (Statista 2019)—Authors’ sketching

3.2  Classifying the Top 20 Popular Social Media Platforms In the analysis carried out by the Statista, Social Media platforms and applications of all categories were included. Their use by consumers is extremely diverse: platforms such as Facebook focus greatly on communication and exchanges between friends and family and continue to drive interaction through features such as photo or status sharing and social games; other social platforms, such as Twitter, focus on fast communication; some focus on the community; others highlight and display user-generated content. Starting from the previous-presented classification on social platforms, according to their objectives, our attempt is to classify the most popular 20 social platforms at global level. The process’ goal consists in identifying the platforms whose typology is of social networking, to be subject of further analysis (Table 1). Although today’s socialization platforms are increasingly similar, trying to incorporate analogous facilities, as a result of the analysis we consider that Facebook, Instagram, Twitter and LinkedIn serve the roles of a social network.

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Table 1  Top 20 (in terms of the active users number) social media platforms typology Social media platform Facebook

Typology Social network

Objective Focuses on the interaction among users with common interests in different areas YouTube Media sharing network Focuses on uploading, viewing, and commenting on video content WhatsApp Instant messaging Provides users the possibility to send messages and to call in a simple and secure way, options available on all phones around the world Facebook Instant messaging Users can send messages and exchange pictures, videos, messenger audio files and other files as well as respond to other users’ messages and interact with robots *It is distinct from the social network to which it belongs as a result of action to separate messaging from the Facebook main application, which requires users to use the web interface or download one of the standalone applications WeChat Instant messaging Although WeChat is known as a Chinese multi-purpose social media, messaging and mobile payment app, developed by Tencent, its focus is placed on the messaging opportunities offered Instagram Social network/media It is a media sharing network, including sharing photos sharing network and videos. Although the app provides users with the ability to send messages and keep in touch with other users, the focus is on distributing, viewing and commenting media content Tencent QQ Instant messaging The focus is on providing free instant messaging services, although it also offers services that include online social games, music, shopping, microblogging and movies QZone Blog The emphasis is placed on self-expression and content sharing. Registered users have the ability to maintain personal blogs, send messages, share and share media to other users Doujin/Tik Media sharing network The focus is on providing video sharing services. The Tok app allows registered users to watch clips, stream short clips, edit them, and distribute them Sina Weibo Microblogging It is often called the Chinese twitter, but it is actually a versatile platform functioning as a combination of Facebook and twitter. The facilities offered are varied, but the emphasis is on distributing media content, getting information, commenting and tracking other users, each post requiring a character limit of 140 Reddit Forum Application in the form of a forum, in which the focus is on distributing, evaluating content and commenting on various posts, often in the form of news (continued)

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Table 1 (continued) Social media platform Twitter

Typology Social network/ microblogging

Objective The focus is on posting and interacting with “tweets” (short posts), imposing a 280-character limit for each post Douban Media sharing network The platfom is focused on providing users the opportunity to create and distribute content related to film, music, books, music, activities and recent events in Chinese cities. LinkedIn Social network Allows interaction between users with common interests, the platform being specifically designed for the business community Baidu Tieba Forum Focuses on providing communication opportunities, using forums or “bars”, as places for users to socially interact Skype Tellecommunication The focus is on initiating video and voice calls, also application offering instant messaging services. Users can send both text and video messages and can send digital documents such as images, text and video. The application also allows video conferencing Snapchat Instant messaging/ The mobile messaging application is primarily used to media sharing network share photos, videos, text and animations Viber Instant messaging Focuses on allowing users to make voice and/or video calls, send text, pictures and messages to other Viber users Pinterest Media sharing network It is predominantly used for sharing and classifying online images LINE Instant messaging It offers users the ability to communicate through text, image, video and audio exchanges, allowing audio and video conferencing between multiple people Source: Authors’ analysis

4  Framework Analysis As guidance for the present analysis, we have established a simple but meaningful tool for understanding Social Media Networks’ competitiveness in terms of their capacity to be used for educational purposes. Based on our previous research (Bogoslov 2018), the Critical Success Factors Framework (CSFs) for future eLearning systems focuses on three main dimensions, summarized as technology, content and actors (the direct beneficiaries). Therefore, our assumption is that any successful eLearning system should meet the requirements imposed by these three directions. The attempt of the current analysis is to particularly examine each of the four globally used identified social networks, in terms of their capacity to serve the requirements of the established CSFs. We set three main forces for our model, i.e. Ease of Access, Ease of Use and Social Networking Facilities, these being both related to the actors and content dimensions. Ease of Access and Ease of Use forces

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were linked to our consideration that a successful eLearning system must have the ability to support a large number of stakeholders, to maintain their diversity and to provide them a cost-efficient and easy to use tool. The third established force was called Social Networking Facilities. Given that the direct beneficiaries, in the case of an eLearning system, are the learners, the braches of this force were established in accordance with their needs. It is already well known that the new generations of learners have different learning characteristics, focusing on collaborative learning, communication and information exchange in the form of text and media (Oblinger et al. 2005; Barnes and Noble College 2016; Kozinsky 2017). Regarding the technology dimension, our previous research already highlighted a cluster of arguments supporting Social Media networks and tools for the development of future eLearning systems (Georgescu and Bogoslov 2019). While some of these social platforms already incorporated modern technologies such as Virtual Reality or Augmented Reality, others strive to meet the technology advance. Therefore, the proposed model does not focus on the technology dimension of the CSFs. The key points for each force were set out as follows: (a) Ease of Access: • Availability: Perhaps one of the most important features an eLearning tool has to meet is availability. Once integrated as an educational tool, it is important that a Social Network can be accessed and used anywhere, anytime. Thus, this point refers to the availability of the platform at a global level. • Device/Operating System Dependency: Extending the availability-­ specific statement that a social networking needs to be accessed from anywhere, anytime, we complete by mentioning that a social platform must be accessible from a wide range of devices. This is due to the diverse types of devices that are available on the market, including desktops, tablets and other smart devices. Also, given the multiple operating systems that ensure devices functioning, the present key point examines the possible limitations of a Social Network related to different operating systems. (b) Ease of Use: • Cost of Basic Usage: In the present case, the costs refer to the potential amount of money to be allocated for the basic usage of the social network in question. This factor can have a determining effect on the use or non-use of the network, given the multitude of free social platforms substitutes. • Multilingual Usage: This key point examines the ability of the Social Network to be used in multiple languages, depending on the user’s needs. • Tagging: In an eLearning context, the usage of using Social Media should help users to get the learning content they are looking for quickly and effectively. Achieving this purpose implies the opportunity to classify and categorise the information in a way that makes it seamless to find. (c) Social Networking Facilities: • Texting Opportunities: This branch refers to the possibility of exchanging text messages through a Social Network.

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• Posting Opportunities: In order to serve the needs of the current generation of learners, the possibilities of distributing materials in the form of posts should be readily available. This area refers to all types of posts, analysing the opportunities and limitations of a Social Network. • SN Groups: Although all the opportunities for users contribute to improving collaboration, our belief is that opportunities to create and participate in groups with common interests are also an important feature serving this dimension. Therefore, the SN Groups branch analyses the capacity of a social network to support the group existence and functioning. • Media Supporting: This refers to the ability to embed, distribute, transmit and edit media content, including photos, videos, and other types of files, through the social network in question. In order to rank the analyzed social networks, we established the following zero to five scale of measuring the capacity to serve as educational means, considering that the main forces are interrelated: 0—Irrelevant for serving educational means. 1—Insufficient relevance for serving educational means. 2—Low relevance for serving educational means. 3—Moderate relevance for serving educational means. 4—Significant relevance for serving educational means. 5—High relevance for serving educational means.

5  Results and Discussion 5.1  Ease of Access Regarding the ease of access (Table 2) the analyzed social platforms, it was observed that all four networks can be used on any device and are not dependent on a particular operating system. Their services are also globally available, but their functioning have been stopped for some countries. Therefore, the purpose of being accessible from anywhere cannot be fully met.

5.2  Ease of Use In terms of ease of use, on the analyzed branches, Facebook reaches all three key points (Table 3). The other three platforms face limitations regarding the multilingual character of the platform. Of course, this can only be considered a matter of time, most of the platforms under examination mentioning that they are making efforts to increase the number of languages in which the social network in question can be displayed and used.

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Table 2  Ease of access Social network Facebook

Instagram

Twitter

LinkedIn

Availability The network is worldwide available. However, there are some countries where Facebook has been banned (e.g. China, Iran, Cuba) The network is worldwide available, but its usage has been blocked in some countries (e.g. China) The network is worldwide available. Similar to Facebook and Instagram, there are some countries where twitter cannot be accessed and used (e.g. China, Iran) The network is worldwide available, but its usage has been blocked in Russia

Device dependency Available on all types of devices. Not restricted to a specific operating system Available on all types of devices. Not restricted to a specific operating system Available on all types of devices. Not restricted to a specific operating system

Score 4/5

Available on all types of devices. Not restricted to a specific operating system

4/5

4/5

4/5

Source: Authors’ analysis Table 3  Ease of use Social Cost of network basic usage Facebook Free social networking site

Instagram Free social networking site

Twitter

Free social networking site

LinkedIn

Free social networking site

Source: Authors’ analysis

Multilingual usage Facebook supports more than 100 languages. By default, the platform appears in the same language as the one chosen in the language settings of the used device. However, Facebook offers users the possibility to change the language in which platform is displayed without changing the language settings of the device Instagram uses the device’s language as the default language for displaying the platform. Instagram allows switching the user interface language for the platform, but it supports only 36 languages.

Tagging Allows users to classify and categorize the information using Facebook hashtags (#tags)

Allows users to classify and categorize the information using Instagram hashtags. Instagram imposes a limit of 40 tags per photo. Twitter default language is English but Allows users to classify and allows users to change it with the categorize the desired one from a list of 47 options information using hashtags (#tags) By default, LinkedIn platform uses the Allows users to classify and device’s language for displaying the platform. Additionally, users have the categorize the information using possibility to change the language hashtags (#tags) choosing one of the 24 options available

Score 5/5

4/5

4/5

4/5

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5.3  Social Networking Facilities In terms of social networking facilities offered to users, the scores obtained by the subject social networks are more dispersed than those for the other two forces. Again, Facebook fulfils all the key points analyzed. Other networks are confronted with limitations on supported media types, limitations on postings, or the fact that they do not allow group interaction (Table 4).

Table 4  Social networking facilities Social Texting network opportunities Facebook Offers the users the opportunity to send messages through an embedded chat

Posting opportunities Users have the possibility to post photos, video, live video and life events. Moreover, posting can include links, location, gifs, surveys, lists and others

Instagram Offers the users the opportunity to send messages through an embedded chat.

Users have the possibility to post photos, videos or texts. However, one of the Instagram’s drawback is represented by the fact that it does not allow website links in photo captions Allows users to create short posts with a limit of 280 characters. Also offers the possibility to share photos, video, gifs, pools or location Allows users to share posts including photos, text, video, or rewarding for other members

Twitter

Offers the users the opportunity to send messages through an embedded chat.

LinkedIn

Offers the users the opportunity to send messages through an embedded chat

Source: Authors’ analysis

SN groups Facebook offers users the opportunity to create groups in the form of communication spaces with some people that share common interests

Instagram provides users the possibility to create only chat groups, but not social networking groups

Media supporting Score 5/5 Supports almost all kinds of media formats, including video, photo, live video, gifs and documents (in groups or chat) Support video, 3/5 live video and photo. Does not currently support other kinds of media like documents or gifs

3/5

Twitter allows users to participate in social networking groups, well known as “twibes”, to share their beliefs on a particular topic

Supports photo, video, gifs, but does not currently support documents

Allows users to create and to participate in social networking groups

4/5 Supports almost all kinds of media formats, including video, photo, live video, gifs and documents (in chat)

Identifying the Optimum Social Site that Could Serve eLearning Purposes…

4,66

4,33

Facebook

LinkedIn

3,33

3,33

Instagram

Relevance for serving educational means

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Twitter

Global usage

Fig. 2  Ranking the analyzed social networks in terms of the number of active users vs. obtained score—authors’ analysis and sketching

5.4  Overall Results and Observations Following the analysis based on the model of the three forces proposed in this paper, Facebook ranks first with an average score of 4.66, offering a high relevance for serving educational means (Fig. 2). LinkedIn ranks second in this analysis with an average score of 4.33, while Instagram and Twitter are ranked the same with an average score of 3.33. Thus, we can state that Facebook is not the only leader in terms of the number of globally active users, but also in terms of the capacity of this platform to serve educational purposes. Although LinkedIn appears to be of significant relevance to serving educational resources while fulfilling the role of a social network, we must also keep in mind that it is targeted at a particular group of users, namely the business community. Therefore, the platform, at least currently, is limited to a certain extent the number of users, as evidence being also its position among the most popular platforms used at global level. This platform was included in the analysis due to our classification as being a social network, but its main purpose should not be neglected.

6  Conclusions and Future Directions of Research Meeting the needs of the beneficiaries remains the key driver of any successful system. In this case, the system itself is represented by the eLearning tool used, while the beneficiaries are, primarily, the learners, followed by the teachers and the educational institutions. Starting from this belief, in a society where Social Media has become an integral part of everyday life, it is obvious that new learning needs

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arise. An individual who was born and grew up surrounded by technology tools and Social Media, as is the case with the new generations, will need a familiar learning environment in line with the environment in which he has developed. Clearly, the analysis shows that, in order to be integrated into an educational process, it is not enough for a Social Media network to be popular. There are a large number of other factors that need to be considered, with the proposed model presenting just a few points in this respect. In addition to the factors included in the proposed model, we also consider the importance of the opportunities offered by socialization platforms for developers. However, this branch has not been included in the present analysis because each of the four platforms analyzed offers APIs for developers, free of charge or imposing certain fees for various additional options. We believe that, from this point of view, the four tools analyzed provide the necessary support for the development and integration of applications designed to meet diverse needs, including educational needs. Also, given the increased popularity of platforms and applications providing instant communication services (e.g. WhatsApp), the development of future eLearning systems should take into account the possible integration between social networks and these. At present, the opportunities for this integration to be possible are increasing as a result of the implemented features that facilitate the connection and communication between social networks and instant messaging. Concluding, we can say that Facebook’s social networking remains the leader in both the global platform’s popularity and the ability to serve educational needs by integrating with eLearning systems. As a future direction of research, it is advisable to conduct a more in-depth analysis by extending the three-factor model, including other key points such as platform security.

References Barnes and Noble College. (2016). Getting to Know Gen Z – Exploring Middle and High Schoolers’ Expectations for Higher Education. Barnes and Noble College. Retrieved from https://www. bncollege.com/Gen-Z-Research-Report-Final.pdf Bogoslov, I. A. (2018). Future research directions on web-based educational systems. In Innovative business development—A global perspective (pp. 9–20). Sibiu: Springer. Boyd, D. M., & Ellison, N. B. (2007). Social network sites: Definition, history, and scholarship. Journal of Computer-Mediated Communication, 13(1), 210–230. Dao, D. V. (2015). Social media classification scheme in online teaching and learning activities: A consideration for educators. International Journal of Education and Social Science, 2(4), 85–94. DataReportal. (2019, January 31). DIGITAL 2019: GLOBAL DIGITAL OVERVIEW. Retrieved from DataReportal: https://datareportal.com/reports/digital-2019-global-digital-overview Georgescu, R. M., & Bogoslov, I. A. (2019). Shaping future E-learning systems through social media within the socio-technical context. IBIMA publishing. Hunsinger, J., & Senft, T. (2014). The social media handbook. London: Routledge. Kaplan, A., & Haenlein, M. (2010). Users of the world, unite: The challenges and opportunities of social media. Business Horizons, 53(1), 59–68.

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Kozinsky, S. (2017, July 24). How Generation Z Is Shaping The Change In Education. Retrieved from Forbes: https://www.forbes.com/sites/sievakozinsky/2017/07/24/ how-generation-z-is-shaping-the-change-in-education/#560ebe8b6520 McDonald, N. (2018, July 26). Social in 2028. Retrieved from We Are Social: https://wearesocial. com/blog/2018/07/social-in-2028 Oblinger, D., Oblinger, J. L., & Lippincott, J. K. (2005). Educating the net generation. New York: Brockport Bookshelf. Retrieved August 8, 2017, from http://digitalcommons.brockport.edu/ cgi/viewcontent.cgi?article=1278&context=bookshelf Statista. (2019, January 25). Most popular social networks worldwide as of January 2019, ranked by number of active users (in millions). Retrieved from Statista - The Statistics Portal: https:// www.statista.com/statistics/272014/global-social-networks-ranked-by-number-of-users/

Dark Spots in Trade Theory: Early Testing Attempts Sorin Burnete

Abstract  The beginnings of the economic theory correspond to philosophers’ attempts to explain why and how do countries trade with each other. Yet even more puzzling was the question how should countries trade? It is no surprise that despite the formidable developments of the theory in the last 200 years plus, there still are dark spots in the economics of trade. Globalization has rendered the issue even murkier. Beside the fact that international trade cannot be insulated from other economic domains, which makes it inadequate for experiments, but even testing itself is cumbersome. Only, evidence on such a complex field as international trade is by no means easy to come by. Keywords  Theory testing · Evidence · Comparative advantage

1  Theory Testing: Necessary? A straightforward answer to the question in this section’s title was provided by American Nobel-winner Wassily Leontief: “Most of what has been said on that subject consisted on reasonable common-sense conjectures or of plausible examples which (…) serve well enough to illustrate the logic of the theoretical argument, but had hardly any specific base in detailed facts and figures.” (Leontief 1969) Clearly, philosophers have always been keen to garner evidence that should legitimize their theoretical notions. One may admit today that scholars’ efforts to explain the complicated mechanisms and winding paths of international trade payed off. Certain areas are nevertheless still outside the scope of the classical and neoclassical theory, hereafter called conventional theory. Yet even in the domains that seemed to be within the grasp of Smith, Ricardo, Hume and the other founders, theories proved hard to test. Some tests acknowledged the theory, others did not. Failures have been even more an incentive to keep on testing. In time though, it has become ever clearer that S. Burnete (*) Lucian Blaga University of Sibiu, Faculty of Economic Sciences, Sibiu, Romania © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 R. Orăștean et al. (eds.), Organizations and Performance in a Complex World, Springer Proceedings in Business and Economics, https://doi.org/10.1007/978-3-030-50676-6_3

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“failure” was not the most appropriate word to term an unsuccessful test. In fact, the whole theory is a string of successful and unsuccessful tests. In the meantime, evidence has been steadily mounting.

2  C  omparative Advantage and Wages: Balassa’s Scant Evidence As it was to be expected, the attempts to test the Ricardian theory empirically started from the presumption that, since comparative advantage hinged on labor productivity as the theory argued, discrepancies in productivity among countries would be reflected in differences in wages, as British journal The Economist emphasizes: “The rationality of the link between wages and productivity is that, if within an economy wages are less than the value of the marginal product (obtained by hiring an additional worker), the firms will be tempted to employ more workers, thereby pressing upward on wages…Comparative advantage predicts that when a poor country starts to trade globally, demand for low-skilled workers will rise disproportionately. That, in turn, should boost their wages relative to those of higher-skilled locals, and so push down income inequality within that country. The theory neatly explains the impact of the first wave of globalization. In the eighteenth century, Europe had a high ratio of low-skilled workers relative to America. When Euro-­ American trade took off, European inequality duly tumbled. In France in 1700 the average real incomes of the top 10% were 31 times higher than the bottom 40%. By 1900 (admittedly after several revolutions and wars) they were 11 times larger.”1 The comparative advantage theory’s underlying idea is that the opportunity cost of a good depends on the labor productivity in the industry producing it. It follows, the productivity level is further related to the wage rate payable to workers in the respective industry. However, a clear-cut relationship between comparative advantage and the wage level is hard to establish. Neither Ricardo (Ricardo 1996), in his fundamental work “The Principles of Political Economy and Taxation”, did factor in wages in the comparative advantage model but only used labor productivity, measured by the number of workers (or working hours) needed to produce a unit of a good, as a basic determinant. The great classic nevertheless intuited the importance of wages as a component of production cost. “Labor is dear when it is scarce and cheap when it is plentiful”, he wrote 200 years ago. The role of wages in comparative advantage determination has been an intensely discussed subject in economic literature. Economists generally set out from the idea that in industries and sectors characterized by relatively higher labor productivity employers pay higher wages, which would be clear evidence that productivity is

1  “Not so Absolutely Fabulous”, The Economist, Nov. 4th, 1995; “Free exchange, Revisiting Ricardo”, Aug. 23rd, 2014

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indeed an underlying factor of international specialization. Some based their tests on the labor theory of value, presuming perfect competition. “When based on a labor theory of value and assuming two countries, each will export those goods for which the ratio of its output per worker to that of the other exceeds the ratio of its money wage -rate to that of the other.” (MacDougall 1951)2 Others ignored the labor theory of value, introducing different factors instead, for example, the net cost ratio, calculated based on value added, thereby taking markets imperfections into account. (Stern 1962) A comprehensive econometric approach of the correlation between wages respectively productivity within a given sector on the one hand, and the trends of international specialization measured by the size of exports of the respective sector, on the other hand, was undertaken in 1963 by American economist Bela Balassa. The analysis, focused on the economies of the United States (US) and Great Britain, made use of data from 28 significant industries. The mutual trade between the two countries was not considered due to the multiple barriers such as tariffs etc. that were in force at the time on either side. Balassa’s goal was to ascertain, by means of regression, to what extent the rise of wages respectively productivity in the US and Britain translates into an increase in the ratio of the two countries’ export shares on third markets. (Balassa 1963, 1989)3 The results are summarized in Table 1. Balassa’s survey, though providing a significant insight into comparative advantage principle, has left the role of wages in the comparative advantage equation insufficiently elucidated. Empirical evidence, he argues, “indicate that a definite relationship between wage ratios and export shares cannot be established.” (Balassa 1989)4 The fact was noticed by other economists too: Kravis as an example, when surveying the relationship between US foreign trade and the wage rates paid to American workers during 1947–1952, found that “firms producing the commodities which, in Piquet’s judgment, are particularly vulnerable to import competition generally afford hourly earnings that are below the average for all manufacturing.” (Kravis 1956) Evidently, in export industries wages were above the national average.

2  MacDougall carried out his test on the economies of the United States and Britain, based on the average productivity in 1937. Wages were two times higher in the US at the time, which, according to the comparative cost’s theory, indicated a double level of productivity for the Americans. Hence, the author considered the United States to have comparative advantage in those industries where the ration was greater than two and Britain to have comparative advantage in industries where the ratio was below two (MacDougall 1951). 3  To add to the survey’s rigor, the author uses the net cost, equivalent to added value plus amortization, per product unit. The conclusions relieve a somewhat surprising fact, that is: exports are tightly correlated with productivity magnitude but poorly correlated with wage rates (correlation coefficient 0.24). The correlation between exports and unit cost per product (which includes the cost of capital) turned out to be strong enough (Balassa 1989). 4  “Productivity advantages are not counterbalanced by higher wages paid in industries with higher productivity, and productivity differences continue to account, in a large measure, for differences in export shares…This implies that the relationship between wages and export shares is by no means uni-directional; while lower wages could conceivably lead to higher export shares, higher export shares may also make possible paying higher wages.” (Balassa 1989)

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Table 1  The correlation between productivity respectively wages respectively unit cost, resulting from Balassa’s survey Regression Direct Logarithmic

Linear correlation coefficientsa Productivity Wages 0.77 0.24 0.84 0.11

Unit cost −0.60 −0.71

Source: B. Balassa: An Empirical Demonstration of Classical Comparative Cost Theory, Review of Economics and Statistics, 1963, vol. 45, pp. 231–238 a In the cited article, it is mentioned that: (a) coefficients belong to the confidence interval 0.6-0.0, according to Fisher transformation; (b) although the selected industries were not randomly picked, the distribution is deemed normal

Balassa’s conclusions on wages can be made more conspicuous if one expresses prices in real terms. (Dornbusch et  al. 1977)5 If in autarchy the relative price of goods does not depend on the wage rate but only on the ratio of the quantities of labor used to produce them, participation in international trade enables the respective country to import the goods at which it has comparative disadvantage at a relatively lower price. This means the real wage, measured by the price of the imported good, will rise, whereas if measured by the price of the exported good, it will remain constant. In brief, in equilibrium, the relative price of imported respectively exported goods lies between the relative prices existing in the participating countries in autarchy; the exchange rate is given by supply and demand prevailing on the joint market. It follows that countries tend to specialize based on comparative advantage thereby obtaining gains from trade even the gains are not split evenly. As a consequence, the real wage rate will also be different: it will be higher in the country with absolute advantage, that is, which has higher productivity in all sectors. Thus, the validity of Ricardo’ principle is once again confirmed: absolute advantage underlies real wage rates in different countries but is irrelevant in terms of international specialization. Balassa’s partially conclusive findings described earlier showed that factors that determine comparative advantage were hard to quantify, which prompted the reputed scholar to proceed in reverse, namely, from reality toward theory. He wonders rhetorically: “Comparative advantages appear to be the outcome of a number of factors, some measurable, others not, some easily pinned down, others less so. One wonders, therefore, whether more could not be gained if, instead of enunciating general principles and trying to apply these to explain actual trade flows, one took the observed pattern of trade as a point of departure, and subsequently attempted to find the main influences that have determined the pattern.” (Balassa 1965a) According to Balassa’s reasoning, if a country holds a noticeably great share in the world exports of a good, it is because it can produce the respective good at lower opportunity costs relative to other countries, which means the country in question 5  “The last question we address in this section concerns the implications of sticky money wages. For a given world money supply, downward stickiness of money wages implies the possibility of unemployment. We assume upward flexibility in wages, once full employment is attained. (…) Thus, an increase in the foreign wage rate, by moving the terms of trade against us, shifts comparative advantage and employment toward the home country” (Dornbusch et al. 1977).

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has revealed comparative advantage (RCA) in the production of the good. He proposed, in support of his theory, a set of indices for the calculation of the RCA, which allows the ranking of countries depending on their performance in the export of various goods. I included an application of Balassa’s RCA model in the Appendix. For all their important role in ascertaining the specialization directions of the world’s nations, the RCA indices calculated by means of Balassa’s suggested procedure are not extraordinarily useful in explaining the structure of international trade. It is for this reason that Balassa’s later research focused on the factors that cause changes in the structure of comparative advantage such as domestic market size, technological standard, natural resource endowment, the effects of economic integration etc.). Changes of the kind will be reflected either in a deeper specialization or in an increased diversification of various countries’ exports of manufactured goods.6 To summarize: (a) regarding domestic market size, large countries like United States or United Kingdom tend to increase exports diversification as compared to smaller countries like Austria, the Netherlands or Belgium, which have a stronger propensity toward deeper specialization; (b) as for technological development, more advanced economies like United States tend to restrain diversification in parallel with an increased specialization in knowledge intensive exports; (c) as concerns resource endowments, results revealed a growing tendency toward exports diversification by countries that lack such resources, like for example, Denmark, whereas better endowed countries like Austria, Canada, Norway etc. tend to increase specialization; (d) with regard to integration effects, results indicate a tendency of EEC member countries to specialize in standardized goods, which inter alia, confirms Linder’s overlapping demands theory. (Balassa 1977)

3  T  esting the Factor Endowment Relevance: Leontief’s Dead End In the 1950s, the following opinion prevailed among economists: “A widely shared view on the nature of the trade between the United States and the rest of the world is derived from what appears to be a common-sense assumption that this country has comparative advantage in the production of commodities which require for their manufacture large quantities of capital and relatively small amounts of labor.” (Leontief 1969) Leontief’s paradox7 baffled the academic world: either the factor-­

 Changes in the structure of comparative advantage were highlighted with the aid of the standard deviation (s.d.) of RCA indices. Small values of the s.d. indicates increased diversification of exports, whereas relatively great values show a more pronounced trend toward deeper specialization (Balassa 1977). 7  American economist Wassily Leontief empirically tested Heckscher-Ohlin’s factor-proportion theorem in the 1950s, using data from the US economy. Leontief hypothesized that in US’s commercial relations with other countries exports of capital-intensive goods were preponderant, while US’ imports consisted mostly labor-intensive ones. The author made use of the input-output analysis and found that US’s imports were 30% more intensive in the capital factor in comparison with exports. This peculiar result was dubbed Leontief’s paradox (Leontief 1956). 6

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proportion theorem was wrong, or it was Leontief’s test that was flawed. Most economist opted for the latter hypothesis: there was no paradox; Leontief’s unexpected outcome was due to his faulty measurement of the variables as well as to the misinterpretation of the data. One has “to adjust correspondingly the measurement of factor endowments, adding the computed human capital to the measure of capital stock.” (Bhagwati 1964) On the other hand, the factor-proportion model’s premises are hardly realistic, and so are the premises of other related theories. The identical technologies assumption for example, is far-fetched: to admit that technologies do not differ among countries (that is, production functions are identical) is tantamount to say that the proportion in which factors combine in the production of various goods is always the same regardless of the general economic background. It would follow that, if a good is capital-intensive, it will remain so whatever the price of capital relative to other factors. Put it differently, the impossibility of factor reversals is postulated. The confusion is best reflected in the theoretical mismatch between physical and economic abundance (scarcity) of factors of production. The theory founders state that relative abundance depends on factors’ relative price existing in the pre-­ commerce state, the relationship being unidirectional. For example, the argument goes, given two countries, A and B, if in A the wage-rental ratio is higher than in B, the former is abundant in capital and the latter, in labor. (Ohlin 1957) Following this line of reasoning, a rule of thumb can be applied: “In the country possessing a greater relative supply of capital, the ratio of the quantity of the capital-intensive commodity produced to the production of the labor-intensive commodity must always be larger than in the other country.” (Jones 1957) These viewpoints were, not refuted but questioned: the factor-proportion theory’s underlying correlation between physical and economic abundance is not unidirectional. “A factor may be abundant, in the sense that the ratio of its quantity to the quantity of the other is high, and yet be expensive, because the country’s demand is biased toward goods that use it intensively.” (Minhas 1962) Even admitting production functions are identical,8 factor intensity reversal is still possible because the elasticity of factor substitution, though constant inside sectors, differs among sectors. Minhas’s tests were subject to certain criticism, claiming they focused preponderantly on primary industries (agriculture, mineral extraction etc.) and less on manufacturing ones, which distorted Leontief’s results as well. (Ball 1966) Leontief’s peculiar findings gave momentum to investigations as to the reliability of the conventional theory’s premises. The odyssey of testing continued unabated until more recent times, providing noticeable insights into the causes of the eponymous paradox. However, certain important premises of the factor proportion theorem such as countries using identical technologies, not only remained still hardly acceptable but called into question the very source of comparative advantage, eventually inserting a wedge between the model itself, claiming that it lies in differences 8  Considering the elasticity of factor substitution within an industry as constant, the Cobb-Douglas function can take the general form: F (K, L) = γ [ − + (1 − ) −]−1/, where K, L stand for the value of capital respectively labor, γ is an efficiency parameter, is an income distribution parameter, and a parameter of factor distribution elasticity. (Arrow et al. 1961)

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in factor endowment, and the Ricardian outlook, according to which, comparative advantage derives from total factor productivity. (Yeaple and Golub 2007)9 Still, despite the comparative costs and factor proportion theories being entangled, the two fundamental approaches offer but a static image of international specialization trends. Comparative advantage surely has a flexible structure due to various factors that influence countries’ technological capabilities as well as their endowment with factors, including human capital.

4  Concluding Remarks The trailblazing result of the tests undertaken by American economist Wassily Leontief in the 1950s, widely known as the Leontief paradox opened the gates for more in-depth investigation of the conventional theory, materializing in a multitude of surveys and tests performed by economists on various economies in various periods. The ostensible paradox was gradually dismantled as scholars broadened the scope of the investigation, primarily through a more in-depth approach of both factor endowment and factor intensiveness, emphasizing the increasing role of technology and human capital relative to physical capital in the factor content of goods production. The Leontief paradox dimmed for a while the general enthusiasm by questioning the relevance of the factor endowment theorem. Yet fading enthusiasm did not mean total loss of confidence in the strength of the theorem: far from denying the merits of the latter, economists suggested henceforth tests would have to be more carefully designed and conducted, with more attention be devoted to several aspects ignored by Leontief such as: differentiated content of factors of production including human capital, changes in the structure of comparative advantage under the impact of technological development etc. In brief, further test would lay greater stress on the role of human capital and technology in the structure of international trade. Not least, economists tried to ascertain to what extent the price of factors was consistent with physical endowment, as the theorem suggested. Finally, despite the setbacks, the tests performed on the Japanese economy in the 1960s and early 1970s clearly confirmed the correlation between changes in factor endow­ment and the structure of comparative advantage as well as the validity of the conventional theory’s prescriptions for nations’ international specialization (Heller 1976).

9  The authors attempted to demonstrate the invalidity of this identical technologies hypothesis by discussing the role of infrastructure in the growth of efficiency and competitiveness of both industries and sectors, and whole national economies. The named study set out from an empirical observation regarding the scarcity of foreign investment in developing economies, namely that the precarity of infrastructure in these countries diminishes the return of the invested capital. It is one of the main reasons for which western companies are often reluctant to invest in these countries, despite the latter having a lower capital-labor ratio than developed countries. (Yeaple and Golub 2007) As a matter of fact, the observation belongs to another American economist, R. Lucas, who employs the paradox term to emphasize this difference. (Lucas 1990)

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A. Appendix Empirical Determination of International Specialization Balassa developed the RCA model using data on the exports of the main industrialized nations (European Economic Community, United States, Japan and United Kingdom), which held about four fifths of world exports of processed goods (groups 5–8 of the SITC) at the time of the survey. Changes in the structure of comparative advantage were highlighted with the aid of the standard deviation of the RCA indices. Relatively small values of (Balassa 1965b). Mathematically, Balassa defined RCA as a ratio between a country’s share in the world exports of a good and its share in total world exports. The value of the ration at a given time can be calculated using the formula: t Xit  ij RCA  t : t  t xwj X w  i t ij



xijt

(A1)

where: RCAijt = RCA of country i in the production of good j at time t; xijt = export of good j by country i at time t; t xwj = world export of good j at time t; Xit = total export of country i at time t; X wt = total world exports at time t; α ijt = share of country i in the world export of good j at time t; α it = share of country i in total world exports at time t. The ratio resulting from Eq. A1 shows a static image of country i’s specialization in the production of good j, at a given time. To emphasize the respective country’s tendency to maintain, deepen or decrease comparative advantage during a longer period, say during t0-t1, Balassa designed an average index, calculated as follows: a) one multiplies the value of the ratio at time t1 by the simple index ACRijt1 / ACRijt0 ; b) one calculates the arithmetic mean between ACRijt1 and the result of the previous step, according to Eq. A2. For the average index so determined to offer a sufficiently accurate image of reality, the t0-t1 interval must not be too long. ACR  t0  t1 

I ij

  ijt1 ACRijt1  ijt1   1/ 2 t     i 1 ACR t0  it1  ij  

(A2)

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East European countries’ international specialization has been intensely discussed in the last decades. In the early 1990s, their position was extremely difficult, following the long-standing policies of forced industrialization based on import substitution and slow technological development. Therefore, the thesis according to which the respective countries had comparative advantage in labor intensive industries such as the production of clothing, was popular enough. The issue gave rise to heated argument among economists because not everybody agreed with the thesis. The validity of the thesis can be ascertained by following both paths suggested by Balassa, that is: (1) identifying the factors that underlie comparative advantage in clothing of the countries under consideration; (2) checking, by means of the RCA coefficients, to what extent reality confirms the fact. The first path brings up again the eternal dilemma: do wages determine comparative advantage or not? Reasoning through the prism of Balassa’ findings, which point to a weak correlation, East European countries’ arguable comparative advantage in clothing production due to low wages is groundless. According to the Ricardian theory, developed by the neoclassical school, it is not the money cost of producing a goods that determines comparative advantage but its opportunity cost. In the case under discussion, considering the assembly cost only, East European countries do have comparative advantage in clothing production because the opportunity cost is low indeed. On the other hand, if the respective countries would attempt to integrate intermediary production beside assembly, namely components, trims etc. as well as the services (logistics, marketing, finance etc.) needed to distribute the garments, opportunity cost would be higher. In fact, low wages are an absolute rather than a comparative advantage, which firms in the region have turned to account by means of outsourcing agreements with western retailers. In the said agreements, Eastern manufacturers would perform purely final assembly, which used manual labor intensively. The second path implies calculating the RCA and inferring the trend. Data in Table A1 indicate the exports of clothing (columns 4, 7, 10, 13), total exports of goods (columns 3, 5, 8, 11, 14) and the RCA in clothing production (columns, 6, 9, 12, 15) of four selected in Central and Eastern Europe during 1995–2004. One can easily notice two different trends in the mentioned countries’ international specialization, that is: regarding the first two, Poland and Czech Republic, belonging to the so-called Vishegrad Group, since they were faster in implementing reforms, the importance of clothing in their exports declined steadily during the analyzed period. By contrast, the other two, Romania and Bulgaria, which were much slower reformers, scored increasing values of the RCA, pointing to a rising role of clothing in their exports. The bottom lines of the table include the average indices calculated according to Eq. A2, for two different periods, 1995–2004 respectively 2000–2004. In the latter case, since the interval is shorter, the indices reflect more accurately the trends in the four countries’ exports.

0.39

0.59

b

7.05

8.12

Total RCAa Clothing merchandise 9 10 11 0.77 1.36 7.91 0.93 1.55 8.08 0.69 1.75 8.43 0.79 1.97 8.30 0.76 2.04 8.50 0.70 2.32 10.36 0.64 2.78 11.39 0.53 3.25 13.87 0.48 4.06 17.61 0.47 4.71 23.48

Romania RCAa 12 5.56 6.31 6.38 7.14 7.38 7.26 7.79 7.60 7.53 7.13

Clothing 13 0.23 0.28 0.35 0.45 0.56 0.69 0.88 1.06 1.50 1.75

Bulgaria

7.33

17.36

Total merchandise 14 5.35 4.89 4.94 4.30 3.96 4.80 5.11 5.74 7.53 9.93

RCAa 15 1.38 1.88 2.17 3.15 4.35 4.66 5.50 5.99 6.50 6.27

Sources: WTO International Trade Statistics (1996–2005), Statistical Yearbook of Romania, Statistical Yearbook of the Czech Republic, Yearbook of Foreign Trade Statistics of Poland, Statistical Yearbook of Bulgaria a Calculated by the author based on Eq. A1 b Calculated by the author based on Eq. A2

RCA I 2004 −2000

RCA I 2004 −1995

0.37

Czech Rep. Total RCAa Clothing merchandise 6 7 8 3.24 0.52 21.60 3.18 0.62 21.90 2.65 0.62 22.77 2.54 0.70 26.35 2.47 0.67 26.85 1.92 0.63 28.99 1.76 0.67 33.40 1.51 0.64 38.46 1.23 0.72 48.74 0.83 0.91 68.65

0.51

Total Clothing merchandise 4 5 2.30 22.89 2.37 24.44 2.22 25.75 2.38 28.23 2.20 27.39 1.88 31.65 1.94 35.09 1.91 41.01 2.04 53.76 1.77 75.04

Poland

b

Total Clothing merchandise 1 2 3 95 157 5079 96 164 5391 97 182 5577 98 183 5499 99 186 5709 00 199 6452 01 194 6186 02 200 6486 03 232 7578 04 259 9203

World

Table A1  Exports of clothing, total exports of goods and revealed comparative advantage in clothing production of four selected countries in Central and Eastern Europe during 1995–2004 ($ bn)

36 S. Burnete

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References Arrow, K., Chenery, H., Minhas, B., & Solow, R. (1961). Capital-Labor Substitution and Economic Efficiency. The Review of Economics and Statistics, 43(3), 225–250. Balassa, B. (1963). An empirical demonstration of classical comparative cost theory. Review of Economics and Statistics, 45, 231–238. Balassa, B. (1965a). Trade liberalization and revealed comparative advantage. Manchester School, 33(2), 176–177. Balassa, B. (1965b). Trade liberalization and “revealed comparative advantage”. Manchester School, 33(2), 176–177. Balassa, B. (1977). “Revealed” comparative advantage revisited: An analysis of relative export shares of the industrial countries, 1953-1971. Manchester School, 45(4), 324–344. Balassa, B. (1989). An empirical demonstration of classical comparative advantage. In Comparative Advantage Trade Policy and Economic Development (pp.  3–16). New  York: New York University Press. Ball, D. S. (1966). Factor-intensity reversals in international comparison of factor costs and factor use. Journal of Political Economy, 74(1), 77–80. Bhagwati, J. (1964). The pure theory of international trade: A survey. The Economic Journal, 74(29), 1–84. Dornbusch, R., Fischer, S., & Samuelson, P. A. (1977). Comparative advantage, trade, and payments in a Ricardian model with a continuum of goods. The American Economic Review, 67(5), 823–839. Heller, P.  S. (1976). Factor endowment change and comparative advantage: The case of Japan, 1956-1969. The Review of Economics and Statistics, 58(3), 283–292. Jones, R. W. (1957). Factor proportions and the Heckscher-Ohlin theorem. The Review of Economic Studies, 24(1), 5. Kravis, I. B. (1956). Wages and foreign trade. The Review of Economics and Statistics, 38, 14–30. Leontief, W. (1956). Factor Proportions and the Structure of American Trade: Further Theoretical and Empirical Analysis. The Review of Economics and Statistics, 38, 386–407. Leontief, W.  W. (1969). Domestic production and foreign trade: The American capital position re-examined. In J. Bhagwati (Ed.), International trade: Selected readings (p. 94). Baltimore: Penguin. Lucas, R.  E., Jr. (1990). Why Doesn’t capital flow from rich to poor countries? The American Economic Review, 80(2), 92–96. Papers and Proceedings of the Hundred and Second Annual Meeting of the American Economic Association. MacDougall, G. D. A. (1951). British and American exports: A study suggested by the theory of comparative costs. The Economic Journal, 61(244), 697–724. Minhas, B. S. (1962). The Homohypallagic production function, factor-intensity reversals, and the Heckscher-Ohlin theorem. Journal of Political Economy, 70(2), 138–139. 143-44. Ohlin, B. (1957). Interregional and international trade (Vol. 39). Cambridge, MA: Harvard University Studies. Ricardo, D. (1996). Principles of political economy and taxation (p. 66). New York: Prometheus Books. Stern, R. (1962). British and American productivity and comparative costs in international trade. Oxford Economic Papers, 14, 275–296. Yeaple, S., & Golub, S. S. (2007). International productivity differences, infrastructure, and comparative advantage. Review of International Economics, 15(2), 223–242.

Specialized Applications Used in the Mobile Application Security Implementation Process Marian Pompiliu Cristescu and Julian Andreev Vasilev

Abstract  In the paper, authors aim to determine the extent to which open source applications can replace specialized security applications for mobile applications. In this respect, open source components are selected at which level the implemented security features are identified, based on which a completeness-determining indicator is calculated. The value of this indicator is then compared to the value obtained for the .NET CF3 framework, with a hierarchy of the components being treated according to this indicator. Based on the same selected components or components derived from them, to which other components have been added, the issue of ensuring their quality is dealt with by calculating the complexity of each. Keywords  Open source applications · Mobile applications security · Algorithm Complexity

1  Introduction Information security is an area that deals with the control of risks related to the use of information systems. This should be considered from the design stage of a new mobile application, so the developer must identify the risks and vulnerabilities and adopt methods to reduce or eliminate them altogether. Risk reduction involves the construction of security and control mechanisms. These issues have a direct impact on implementation policies and environment.

M. P. Cristescu (*) Lucian Blaga University of Sibiu, Faculty of Economic Sciences, Sibiu, Romania e-mail: [email protected] J. A. Vasilev University of Economics - Varna, Faculty of Computer Science, Varna, Bulgaria e-mail: [email protected] © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 R. Orăștean et al. (eds.), Organizations and Performance in a Complex World, Springer Proceedings in Business and Economics, https://doi.org/10.1007/978-3-030-50676-6_4

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M. P. Cristescu and J. A. Vasilev

New developments in mobile device technology have opened the way for new applications designed to run on these devices. Initially, mobile devices offered limited functionality due to reduced memory capacity, computational power and difficult interaction. Currently, the features of mobile devices can be compared to previous computer variants, and they allow the development of complex mobile applications that use the available hardware capabilities. The specific features of mobile devices running on these platforms are also detailed in (Pocatilu 2006), the author also presenting practical ways of implementing these applications, such as event handling, data storage and network access. In order to understand the security requirements of a new application, the following issues need to be tracked and analyzed: • • • •

application goals; the useful life of the data being handled; performance restrictions; specific security-related objectives.

When deciding how to build a mobile application, it is important to consider the features and goals it has to meet, as they play a major role in selecting the deployment platform and application type. At each mobile platform considered, IOS, Android, and Windows, there are limitations that determine the selection of a particular platform in mobile application deployment. These limitations are determined by the ease with which the system resources, features offered (such as NFC and QR code support), the known development language, accessibility, a developer account for each platform. Open source applications are those applications with highly accessible source code, and licensing allows the reuse of certain modules or the entire source code. In (Vişoiu and Trif 2010) are presented the criteria that must be met by an open source application: • be redistributable (be public and allow users to use the license in another application); • the source code must be public, and the download process does not charge; • the source code must be easy to understand and modified so that it can be further redistributed under the same license; • the integrity of each author’s source code, each version having a unique identifier (the software license is different for each user or group of users); • the software license must not be predictable.

2  Literature Review The ISO9126 (ISO 9126 2011) standard describes the quality of software products. Of these, functionality is a quality feature represented by a set of attributes related to the existence of certain functions and their specific properties; security is that

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41

attribute related to the ability to prevent unauthorized, accidental or deliberate access to programs and data. In software development methodologies, security requirements are part of the non-functional requirements category. The goal of developing applications and information systems is to implement functionalities that address specific issues for software development. There are also non-functional requirements that define how the solution should behave. Security requirements are related to maintainability, usability, efficiency, compatibility, and other attributes that define the overall quality of the software as outlined in (Runeson et  al. 2012). In the Rational Unified Process—RUP methodology, these security requirements are documented using specific formulas such as checklists or customized forms as outlined in (Barnes 2007). Standards such as UML—The Unified Modeling Language—are expanded with specific elements for capturing security requirements, such as UML sec for how to integrate with the RUP methodology, presented in (Kabasele Tenday 2010). Other software development methodologies, such as Agile, implement their own strategies to identify non-functional requirements including security, highlighting the importance of this aspect in software development (Ambler and Lines 2012). In the field of IT security, a representative work is Electronic Signatures and Computer Security, (Patriciu et al. 2006). In the Computer Security chapter, authors identify basic IT security requirements, such as availability, authentication, data integrity, confidentiality and non-repudiation (preventing the sender from being misrecognized), define IT as “the ability of the computer system to withstand up to level, accidents or malicious actions that compromise the availability, authentication, integrity and confidentiality of stored or transmitted data and services provided through or by networks or systems”. Threats and vulnerabilities in computer security are identified: intercepting communications at routers, gates, network servers; unauthorized access to computers and computer networks; network disruption, and more, and ways to solve them by using firewalls, password management, using data encryption methods, setting standards and protocols used at the organization level, providing a data recovery plan disaster and auditing of security policies established and implemented at the level of an organization. In his paper entitled Mobile Application Security (Dwivedi et al. 2010), Dwivedi presents the major security issues common to all mobile platforms. Issues addressed include device physical security, storage security, multi-factor authentication, secure multi-user support, operating system security, viruses, and mobile-specific attacks. Mobile application development practices are proposed to limit security issues. To ensure security for mobile applications, the System Security Cryptography namespace is available in the specialty literature. It provides cryptographic services, including data encryption and decryption, hash operations, random number generation, and messaging authentication. With regard to application security, the Business Intelligence Roadmap: The Complete Project Lifecycle for Decision-Support Applications (Terpeluk and Atre 2003), in the Security Management chapter, states that security is often overlooked. The main argument is that BI uses aggregated or summed data. However, a common

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M. P. Cristescu and J. A. Vasilev

OLAP operation, such as drill-down, leads to accessing detailed information from a more general category. Given that data used by BI are common to production or operational system data, security becomes particularly important in these cases. In the Open Source Data Warehousing and Business Intelligence (Bulusu 2012), Chap. 1.3.1, Intelligent Content for Insightful Intent, states that from the client’s point of view a competitive intelligence is required for which the Open Environment -Source comes with web security and mobile security solutions. These are examples of ethical hacking and penetration tests (deadlines for informational audit that address the identification of all vulnerabilities of IT systems, internally and externally) at the level of the application for which such tools exist and which improve the security architecture itself business as a whole. In Chap. 2.6, Open Source DW and BI: Use and Abuse defines, among the best ways to use data warehouses and BI Open Source, that the Open Source workflow for multiplatform computing that must be implemented at the application level on a global level: identity, data and transaction volume scalability, multifactor security from data preparation to predictive work, cloud computing, and quality assurance in mobile and cloud environments. It also highlights the role of security in the BI solution. At the same time, a BI solution can also be a tool for security. In Managing Risk and Information Security: Protect to Enable (Harkins 2012), more specifically in Using Business Intelligence to Detect Suspicious Behavior, there are BI apps for detecting suspicious behavior. Utility is evident in cases such as overseeing bank transactions to identify fraudulent ones. Large volumes of data are analyzed using automated tools to detect and monitor abnormal activities. This application type extends to various levels, from large institutions such as banking, to individual users or computer networks.

3  Applied Methodology In order to determine the necessity of implementing an application and all the security elements involved from scratch or the use of certain existing open source security components, we conducted an analysis of these components. The aim was to identify the possibility of replacing the basic frameworks used in the development of mobile applications with open source components.

3.1  A  nalysis of Open Source Security Components for Mobile Applications Once the organization decides to implement a mobile application, the developer has the following options:

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43

• developing all the missing components of the used framework (time consuming and material resources); • purchase of one or more commercial components or products containing the items to be implemented; • the use of open source alternatives covering the necessary elements (valid only if those components were previously validated by many users). The case study focused on the Windows Phone 6 platform. The basic framework for building mobile applications being .NET CF 3.5. Existing open source security components have been selected to be included in the analysis: LightCrypto and Bouncy Castle API. The LightCrypto open source component is available at (Van Ham 2003). This component is a cryptographic library that focuses on the Bouncy Castle Application Programming Interface (API), is developed in JAVA language, and can be used on JAVA-enabled mobile devices and on PDAs. The cryptographic library is characterized by: • uses digest message algorithms: MD5 or SHA-1 hash algorithms; • for encrypting and decrypting files and character strings uses Password Based Encryption (PBE); • use HMAC or CBC-BlockCiperMAC to create Message Authentication Code from texts and files; • use PBE to encrypt and protect symmetric keys; • use AES in CBC mode with PKCS12 to encrypt and decrypt files of any length; • use the RC4 flux cipher to encrypt and decrypt input streams; • use hash functions to encrypt and decrypt data in HSQLDB; • is developed in JAVA; • does not use Sun Java’s Java Cryptographic extensions. Bouncy Castle is an open source cryptographic component represented by the following features (Microsoft 2012a): • contains cryptographic classes for Java and C #; • provider for Java Cryptography Extension and Java Cryptography Architecture; • library for reading and writing of encoded objects Abstract Syntax Notation One (ASN.1); • Java Cryptography Extension (JCE) 1.2.1 implementation; • Transport Security Layer (TLS) API client; • signed versions compatible with JDK1.4–1.6 and Sun JCE; • X.509 certificate for versions 1 and 3, CLR version 2 and Personal Information Exchange Syntax Standard 12 (PKCS12) files; • generator for attributes of X.509 certificate for Version 2; • processor for S/MIME and CMS (PKCS7/RFC 3852), Online Certificate Status Protocol—OCSP (RFC 2560), Tunnel Setup Protocol—TSP (RFC 3161) and OpenPGP (RFC 2440).

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M. P. Cristescu and J. A. Vasilev

This API is compatible with all devices running JAVA, starting from J2ME to JDK1.6 and for C #, starting with .NET CF 2.0, and providing the following functionality: • • • •

PSS signature support; has two methods for generating the subject KeyIdentifier (RFC 32080); 96, 112, 120, and 128-bit MAC support; RSA, RSA-PSS, and ECDSA signature support (RSA support can be used in CmsSignedDataStreamGenerator to support signatures without signed attributes); • MQV EC support and CMS library. The Bouncy Castle component has the following features: • generating and parsing PKCS # 12 files; • X.509 certificate generator and V1 and V3 certificate interpreters and certificate attributes for CRL version V2; • PBE algorithms: PBE with MD2 and DES-CBC, PBE with MD2 and RC2CBC, PBE with MD5 and DES-CBC, PBE with MD5 and RC2CBC, PBE with SHA1 and DES-CBC, PBE with SHA and RC2CBC, PBE with SHA-1 and 128 bit RC4, PBE with SHA-1 and 40bits RC4, PBE with SHA-1 and 3-keyDESEDE-­ CBC, PBE with SHA-1 and 2-key DESEDE-CBC, RC2-CBC 128-bit, SHA-1 and PBE with 40 bits RC2-CBC, PBE with HmacSHA-1, with HmacSHA PBE-­ 224, with HmacSHA PBE-256, HMAC PBE with RIPEMD128, and PBE with the HmacRIPEMD256 HmacRIPEMD160; • algorithms for signature: MD2 with RSA MD4 with RSA, MD5 with RSA, RIPEMD128 RSA, RIPEMD160 RSA, RIPEMD256 RSA, SHA1 with RSA, SHA-224 with RSA, SHA-256 with RSA and MGF1, SHA384 with RSA and MGF1, SHA-512 with RSA and MGF1, SHA-1 with DSA and SHA1 with ECDSA; • symmetric key algorithms: AES, Blowfish, Camellia, CAST5, CAST6, DESede, although GOST28147, HC-128, HC-256, IDEA, NaccacheStern, RC2, RC4, RC5–32, RC5–64, RC6, Rijndael, Serpent, Skipjack, TEA / XTEA, Twofish and VMPC; • symmetric keys: CBC, CFB, CTS, GOFB, OFB, OpenPGPCFB and SIC (CTR), ISO10126d2, ISO7816d4, PKCS # 5/7, TBC, X.923; • asymmetric keys algorithms: RSA, ElGamal, DSA, ECDSA; • asymmetric key coding: ISO9796d1, OAEP and PKCS # 1; • message digest algorithms: GOST3411, MD2, MD4, MD5, RIPEMD128, RIPEMD160, RIPEMD256, RIPEMD320, SHA-1, SHA-224, SHA-256, SHA-­ 384, SHA-512, Tiger; • signing mechanisms: DSA, ECDSA, ECGOST3410, GOST3410, ISO9796d2, PSS, RSA; MAC: CBCBlockCipher, CFBBlockCipher, GOST28147, HMac, and ISO9797 Alg. 3; • PBE generators: PKCS # 12, and PKCS # 5—Schemes 1 and 2; • OpenPGP (RFC 2440);

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45

• Cryptographic Message Syntax (CMS, RFC 3852); Online Certificate Status Protocol (OCSP, RFC 2560); Time Stamp Protocol (TSP, RFC 3161).

4  Methodology’s Results These open source components are important because they complement the missing functionality in the frameworks provided by software companies. The case study consists in analyzing the characteristics of these open source components and the encryption algorithms implemented. Their components are compared to those deployed in .NET Compact Framework 3.5 and JAVA. In .NET CF 3.5, the following sections are implemented (Microsoft 2012a): • cryptographic primitives, including the following types of algorithms: • a secret key encryption (symmetric key encryption) that uses a single secret key to encrypt and decrypt the information; • encryption using public keys (asymmetric encryption) that uses public and private key pairs to encrypt and decrypt data; • a cryptographic signature (digital signature) that uses hash functions to verify the origin of the information; • a cryptographic hash that maps the data to fixed length sequences. • secret key encryption; • public key encryption; • digital signature; • hash values; • generating random numbers; • ClickOnce manifests; • CNG classes (Cryptography Next Generation); Table 1 provides a comparison of the features provided by these open source components. The ICD indicator is calculated to assess the degree of completeness of the security features implemented by the treated components. The value of the indicator is then compared to the ICD value of the .NET CF3 framework. The following formula is used to calculate the ICD indicator:



I CDi =

OSCi , TC

where: OSCi—the number of features of the open source component i; TC—the total number of features of the open source components treated. This indicator is calculated for each treated open source component, the values obtained are shown in Table 2.

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Table 1  Algorithms/features of the open source components treated Open source components Characteristics CF3.5 JAVA Symmetrical encryption RC2 X X RC4 X PBE X X Rijndael X X AES X X Asymmetric encryption CBC X X DSA X X RSA X X ECD X X Encrypted digital signature DSA X X RSA X X ECDSA X X ECDSACNG X Encryption classes HMACSHA1 X X MACtripleDES X MD5 X X RIPEMD-160 X X SHA1 X X SHA256 X X

LightCrypto

X X X

Bouncy castle X X X X X

X X X

X X X X

X X X

X X X

X

X

X X X

X X X X

Table 2  The value of the open source aggregate indicator Name ICD

CF 3.5 22/23

Table 3  The hierarchy of the open source components treated

JAVA 22/23

LightCrypto 14/23

Bouncy castle 21/23

Name Value ICD CF3 22/23 ICD JAVA 22/23 ICD Bouncy Castle 21/23 ICD LightCrypto 14/23

The results indicate that these open source components are comparable to the best possible implementation of a core framework. Based on this indicator, a hierarchy of components considered in the case study was performed (Table 3).

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47

Table 4  Algorithms used in message digest MD5 SHA-1 SHA-256 SHA-512 RIPEMD-160

CF 3.5 X X X X X

Table 5  Hierarchy of digest message algorithms

JAVA X X X X X

LightCrypto X X

Bouncy castle X X X X X

Name ICD Bouncy Castle ICD CF3.5 ICD JAVA ICD LightCrzypto

Value 5/5 5/5 5/5 2/5

Table 3 shows that most components in JAVA and .NET CF 3.5 are also deployed in the open source components. Message Digest, which is detailed in (Microsoft 2012b) is a one-way secure feature that returns a fixed length hash valuation regardless of the length of data used. Table 4 shows the algorithms used in the message digest and the degree of coverage within the treated components. Using the defined ICD indicator, from the point of view of the digest message algorithms, in the context of the case study, it is concluded that Bouncy Castle is the most complex opensource component. Table 5 shows the hierarchy of components in terms of implemented digest message algorithms. The algorithm most often used for digest message is the MD5 algorithm. It is characterized by the fact that it transfers any message of any length to a 128-bit digest key or message and its utility in verifying the integrity of the data. In conclusion, it has been demonstrated that these open source components are viable alternatives for implementing mobile applications because they provide most of the functionality, features and security features found at the core framework frameworks.

5  Conclusions Mobile application security has an important role in the software development process. Using a security component protects sensitive information stored at the application level or transferred over the network in dialogue with other systems. Certain components require the implementation of some special types of algorithms, and implementation must decide on the type of algorithm that is appropriate to run on mobile devices.

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Open source components reduce the complexity of newly developed software because the effort required to implement the functionality is diminished. These are tools that facilitate the implementation of new software products, are used without the need for a license. Ensuring the quality of mobile applications is an important aspect that needs to be pursued to implement a qualitative component. Application quality is ensured by identifying mobile application features and calculating software metrics for them, thus facilitating tracking of the component. To determine the difficulty of the ­application, use the complexity feature, calculated by different models (McCabe, Halstead) and indicators. Open source components are in constant development and expansion, because any developer can add new functionality. Thus, the component becomes more and more complex and reliable. There is a dependence between the complexity and the reliability, meaning that if the complexity of the mobile application grows, the application’s specific confidence decreases. Using open source components in the development of new software products, the effort required to implement them is lower, as much of the source code is already implemented. Open source security components are continuously developed, most of which are based on encryption algorithms. These components are more used and trusted as they are used and tested by as many developers as possible.

References Ambler, S., & Lines, M. (2012). Disciplined agile delivery: A practitioner’s guide to agile software delivery, in the enterprise. Indianapolis, IN: IBM Press. ISBN 0132810107, 9780132810104. Barnes J. (2007). Implementing the IBM Rational Unified Process and Solutions: A Guide to Improving Your Software Development Capability and Maturity (Pearson Education, p. 216). Upper Saddle River, NJ: IBM Press. ISBN 0132704323, 9780132704328. Bulusu, L. (2012). Open source data warehousing and business intelligence. An Auerbach book (p. 432). Boca Raton, FL: CRC Press. ISBN 1439816409, 9781439816400. Dwivedi, H., Clark, C., & Thiel, D. (2010). Mobile application security. New York: McGraw Hill Professional. ISBN:987-0-07-163357-4. Harkins M. (2012). Expert’s voice in information technology (p.  152). SpringerLink: Bücher, Apress. ISBN 143025114X, 9781430251149. ISO 9126. (2011). International Standardization Organization: Software quality assurance, Retrieved 2019, January 15, from http://www.issco.unige.ch/en/research/projects/ewg95// node14.html and http://www.sqa.net/iso9126.html. Kabasele Tenday, J.  M. (2010). Using special use cases for security in the software development life cycle. In Proceeding WISA’10 Proceedings of the 11th international conference on Information security applications (pp. 122–134) ISBN:3-642-17954-1 978-3-642-17954-9. Microsoft. (2012a). Cryptography overview. Retrieved 2018, December 11, from http://msdn. microsoft.com/en-us/library/92f9ye3s(v=VS.90).aspx Microsoft. (2012b). Cryptographic services. Retrieved 2018, December 11, from http://msdn. microsoft.com/en-us/library/92f9ye3s.aspx Patriciu, V., Ene-Pietroşanu, M., Bica, I., & Priescu, I. (2006). Semnături electronice şi securitate informatică, Aspecte criptografice, tehnice, juridice şi de standardizare. Bucureşti: BIC ALL. ISBN 973-571-564-3.

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Pocatilu P. (2006). Influencing factors of mobile application’s quality metrics, Economy Informatics Journal, No. 1–4, pp. 102–104, INFOREC Publishing House, ISSN 1582-7941, EISSN 2247-8523, Bucharest, 2006. Runeson, P., Host, M., Rainer, A., & Regnell, B. (2012). Case study research in software engineering: Guidelines and examples (p.  256). Hoboken, NJ: Wiley. ISBN 111818100X, 9781118181003. Terpeluk, M.  L., & Atre, S. (2003). Business intelligence roadmap: The complete project lifecycle for decision-support applications. Boston, MA: Addison-Wesley Professional. ISBN 0201784203, 9780201784206. Van Ham G. (2003). LightCrypto. Retrieved 2018, December 11, from http://jcetaglib.sourceforge. net/lightcrypto/ Vişoiu, A., & Trif, S. (2010). Open source security components for mobile applications. Open Source Science Journal, 2(2), 155–166. ISSN 2066-740X, 155-166.

The Impact of Cultural Orientation on the Societal Motivations of Luxury Good Consumption of IT Professionals in Sri Lanka L. D. A. D. Dissanayake

Abstract  The primary objective of the study is to examine the impact of cultural orientation on the societal motivations of luxury good consumption of IT professionals in Sri Lanka. Thus, the study has used a sample of 103 IT practitioners in Sri Lanka. Correlation and regression analysis have been used to achieve the primary objectives. Consequently, among the four independent variables; horizontal individualism, vertical individualism, horizontal collectivism and vertical collectivism, only vertical individualism has a significant and positive relationship towards the societal motivation of luxury good consumption. The other variables have negative none significant relationship towards social luxury good consumption. Regression analysis concludes that only vertical individualism is a significant predictor of social luxury good consumption motivation of IT professionals. The other variables are not significant predictors. Keywords  Luxury goods · Cultural orientation · IT professionals

1  Introduction Sri Lanka has been maintaining slow but steady economic growth over the years. After ending nearly three decades long civil war in Sri Lanka, there have been many development projects to improve the infrastructure facilities to facilitate more robust agricultural and industrial development, while paying attention to improve the service sector in the country. The Sri Lankan economy has been transitioning from a predominantly rural-based economy towards a more urbanized economy, oriented around manufacturing and services sectors (The World Bank 2018). According to The World Bank (2018), the country has made a significant progress in its socio-­ L. D. A. D. Dissanayake (*) Sri Lanka Institute of Information Technology, Malabe, Sri Lanka © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 R. Orăștean et al. (eds.), Organizations and Performance in a Complex World, Springer Proceedings in Business and Economics, https://doi.org/10.1007/978-3-030-50676-6_5

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economic and human development indicators. With the various progressive development initiatives, Sri Lanka has transformed from lower income country into a lower middle-income country. Sri Lanka is now recognized as a Lower ­Middle-­Income Country (LMIC) with an approximate per capita income of 4073 USD as by 2017 (The World Bank 2018). Moreover, it is said that Sri Lanka demonstrates characteristics similar to Upper- Income Countries (UIC) as well (Education Today 2018). With the enhanced income, the middle class in Sri Lanka has increased and the consumption patterns of recognizable portion in the society have significantly changed. Arunatilake and Omar (2013) have explained that there is a rising middle class in Sri Lanka. Thus, there are signs of emerging demand for more developed services and luxury products by the Sri Lankan consumers. The luxuries, which poor or near poor cannot afford have been rising in demand in Sri Lanka. For exemplifications, the advertisements offering holiday packages to foreign countries are published daily basis in newspapers and in social media, vehicle sales have been steadily increasing and also the demand for luxury apartments in the city areas have been increasing over the past years. These are the signs of growing middle class in Sri Lanka and changing consumption patterns of Lankan consumers, who are now looking to consume more luxuries. Thus, due attention should be paid to this area and the research on this field should be encouraged. This highlights the significance of the current study since it addresses a contemporary need in the country. Kapferer (1997) describes luxury goods as the goods that “provide the owners with additional pleasure, act simultaneously on all senses and constitute an imminent distinguishing element of the ruling classes”. Wiedmann et al. (2007) explain that luxury goods present four types of values that function within the luxury goods; first the financial value that represents the price which is a specific investment of capital, second the functional value that directly relates to quality, performance, uniqueness, usability and individuality of luxury goods, third values are individual values that are related to material, emotional and hedonistic values, fourth and the last value is the social value, as the prestige, the demonstration effect and the manifestation of social status. Past studies describe theoretical perspectives regarding the purchase of luxury goods. Mainly, Veblen (1899) has highlighted the symbolic motivation of luxury good consumption motivation which describes an individual’s desire to utilize luxury goods as symbols to communicate meanings about themselves to others. Moreover, hedonic motivation of luxury good consumption motivation has been highlighted by Hirschman and Holbrook (1982). Accordingly, the sensory benefits such as taste, smell, texture, and visual, which are to be derived from luxury consumption can motivate persons to consume luxury goods. Wong and Ahuvia (1998) have stated the instrumental motivation which refers to the perceptions of quality regarding the luxury goods, sometimes are thought to be of higher intrinsic quality. It can motivate individuals to consume luxury goods (Veblen 1899; Hirschman and Holbrook 1982; Wong and Ahuvia 1998; Yu 2014). Culture has been defined as the set of attitudes, values, beliefs, and behaviors shared by a group of people, but different for each individual, communicated from

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one generation to the next generation. It is complex pattern of ideas, emotions, and observable demonstrations that tend to be expected, enhanced, and rewarded by and within a particular group. The consumption patterns of individuals are influenced by the various cultures that they live in. Professionals increase the existing of knowledge, apply scientific or artistic concepts and theories, or teach in a systematic manner. Most occupations in this category such as engineers, lawyers, economists, computing professionals, teachers and health professional require skills at graduate and postgraduate education (Department of Census and Statistics 2017). These people have higher potential to demand for more luxury goods. Therefore, understanding their cultural orientation and the motivations to consume luxury good is crucial. In addition to the value of the topic addressing to an ongoing need in the country, the current study is very significant from academic and commercial perspectives. It explores how the cultural orientation of Sri Lankan professionals, who occupy in a booming industry in Sri Lanka, impact on the societal motivation to consume luxury goods. The consumption patterns and motivations of Sri Lankans are rapidly changing with the accelerating economic growth and due to related socio-economic changes. Academically, there are many studies done regarding the luxury goods by many scholars in Sri Lankan context. Nevertheless, apparently not many studies have done regarding the cultural orientation and luxury good consumption motivation of Sri Lankan citizens. Therefore, the study has an academic significance. Moreover, since there is an economic and cultural trend to consume luxury goods, considering the commercial aspect, this study will be vital for companies who are targeting the consumers, who are willing to consume luxury goods in Sri Lanka. Hence, the current study has a commercial significance as well.

2  Literature Review Veblen (1899) has defined luxury goods as items that do not necessarily have functional utility but displaying them can bring prestige to the owner. Wealthy individuals often consume highly conspicuous goods and services to advertise their wealth, hence, gain greater social status (Veblen 1899). Black and Myles (2012) have defined luxury good as goods or service whose consumption increase more than the proportion to an increase in income. Dubois and Duquesne (1993) have explained that luxury goods are expensive. Despite the market being identified the luxury goods as expensive products, some individuals consider them as trivial products, without any clear functional advantage, over the non-luxury counterparts. Therefore, producers who manufacture luxury goods believe that their customers are fundamentally coming from upper income class. Luxury goods provide the owners with additional pleasure and act simultaneously on all senses and establish an imminent distinguishing element of the ruling classes (Kapferer 1997). Consumers do not decide to purchase luxury goods due to the functionality and usability of them. Therefore, luxury goods are rarely treated as

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a practical or as the basic goods. Luxury goods are purchased by the consumers due to the hedonistic and symbolic values of them. It also explains that purchasing ­luxury products is kind of an investment for its buyers. They invest to buy luxury products because they believe that the view of themselves in the eyes of others will quickly increase. Customers who buy luxury goods want to buy exclusive goods due to its value over time, beauty, elegance and sophisticated taste associated with the art and craftsmanship of their production (Kasztalska 2017). These commodities, which are considered status-conveying, all have the feature of being either easily seen by others or easily talked about, in social conversations (Fan and Burton 2002). Even though conspicuous consumption has been defined in different ways, there is one attribute which is common to all definitions; it is a consuming behaviour motivated by the display of self-identity. Conspicuous consumption is a generic conception. It is a type of consumption that is motivated by displaying self-identity (Yu 2014). Conspicuous consumption has been defined as a form of economic behaviour in which self-presentational concerns override desires to obtain goods at bargain prices (Sundie et al. 2011). Chaudhuri et al. (2011) explain conspicuous consumption as cautious behaviour of consuming visible products that are with scarce economic and cultural capital to communicate distinctive selfimage to others. Yu (2014) has mentioned that the motivations to consume luxury goods are influenced by a combination of physical, social-demographic, and cultural factors. According to Richins (1994) individuals are motivated to consume luxury goods for materialist reasons. Symbolic motivation of luxury good consumption is the desire to exhibit social prestige. Hedonic motivation of luxury good consumption is the motivation to meet inner thoughts and feelings, pleasure and excitement (Yu 2014). Hirschman and Holbrook (1982) define hedonic consumption as “consumers’ multisensory images, fantasies and emotional arousal in using products.” Instrumental motivation of luxury good consumption is defined by Vigneron and Johnson (1999) as the motivation for quality, where quality is assumed to be related with a higher price. Han et al. (2010) explain that wealthy consumers, who are low in need to demonstrate their status, wish to associate with their own kind and pay a premium for quiet goods only they can identify. However, affluent consumers, who are high in need for status, use loud luxury goods to signal to the less wealthy that they are not one of them. Then, there are those individuals who are high in need for status, but cannot afford true luxury good, thus use loud counterfeits to match those they recognize to be wealthy. Past studies focus on three main factors that affect motivations to engage in luxury good consumption; materialism, collectivism, and social dominance. Richins and Dawson (1992) explain materialism as an individual’s identity by the ownership of possessions. Materialists think possessions are the centre of life (acquisition centrality), possessions bring well-being in life (acquisition happiness), and possessions as material symbols of success (acquisition success). Collectivism means the extent to which one considers the opinions of others in their decision making. The collectivists consider how others may feel about their decisions. Collectivistic indi-

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viduals are more motivated by the perceived norms of their connectedness to others (Triandis 1995). Social dominance is conceptualized within the context of literature regarding hierarchical and egalitarian personalities (Yu 2014). Culture is defined as beliefs, values, norms and behavioural patterns of a group (Leung et al. 2005). Culture forms patterns of ideas and values that shape human behaviour. Culture has a significant and direct impact on human behaviour (Kroeber and Parsons 1985). Cultural identity is a power variable for segmenting the market for luxury items (Dubois and Duquesne 1993). The researcher has highlighted that there is a strong relationship between a positive attitude towards the cultural change and consumption of luxury goods. Furthermore, Dubois and Duquesne (1993) explain that luxury producers should analyse the customers’ value system. There is an increasing interest in the impact of culture on consumption and it is said that culture plays a vital role in individuals’ consumption (Jun et al. 1993). Moreover, Mourali et  al. (2005) have mentioned that the values of culture have influenced consumer behaviour and motivations. Triandis (1995) has classified culture into two typical dimensions; collectivism and individualism. The researcher has described that collectivism and individualism can be explained based on four characteristics; how individuals define themselves which can be interdependent or independent, the priority of group goals and personal goals, the significance of rationality compared with relatedness, and emphasis on attitudes and norms as the main attributes of social behaviour. Individuals from collectivism-oriented culture view norms are more important than attitudes. In such a culture, individuals view themselves as interdependent with others and are rooted in their group and society. In collectivist culture, people concentrate on society and give priority to groups’ goals and welfare against their own individual goals. On the contrary, people coming from individualistic culture consider that each person is a unique entity and thus treat themselves as independent from others. They give priority to the achievement of personal goals instead of group goals. The researcher further explains that even individualistic or collectivistic culture is different (Triandis 1995). Both collectivism and individualism may be horizontal or vertical depending on their relevant emphasis on horizontal or vertical. Thus, we can categorize it as horizontal collectivism, vertical collectivism, horizontal individualism and vertical individualism (Singelis et al. 1995; Triandis and Gelfland 1998). Individuals from horizontal collectivist cultures are interdependent who attached to the common goals of their groups, but they do not obey authority easily. Individuals from vertical collectivist-oriented cultures are willing to obey the norms of their groups and sacrifice their personal goals to fulfil and benefit the group goals, while accepting the authority. Past studies highlight that despite the willingness to be unique, independent and self-reliant, individuals who recognize themselves as horizontal individualists have no desire to distinguish themselves from the rest and have thus no interest to be different and to have high status. Vertical individualistic individuals want to pursue high status, winning and be unique. Thus, they treat themselves as independent and different to others (Singelis et al. 1995; Triandis and Gelfland 1998). According to Triandis (1995) in each culture, the cultural orientation of an individual contains different combinations within collectivism-­

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individualism patterns and horizontal-vertical patterns. Mooij (2017) has mentioned that the values associated with horizontal and vertical and collectivist and individualist orientations have implications for understanding consumption motivation across cultures.

3  Problem Statement After the end of civil war in 2009, Sri Lankan economy has been growing. World Bank states that Sri Lankan economy has grown at an average of 5.8% during the period of 2010–2017. Moreover, Sri Lankan social indicators rank among the highest in South Asia and also better compared to those of other middle-income countries. Extreme poverty is rare to find where the country has comfortably surpassed most of the MDG targets set for 2015 and was ranked 73rd in the Human Development Index in 2015 (The Wold Bank 2018). The economic changes which have been happening in Sri Lanka has led to bigger middle class and created new cultural trends in Sri Lanka. Arunatilake and Omar (2013) have highlighted that there are signs of increasing demand for more developed services and luxury products by the Sri Lankan consumers due to the rising middle class in the country. They further explain that the luxuries, which poor or near poor cannot afford have been rising in demand in Sri Lanka (Arunatilake and Omar 2013). Therefore, researcher should pay more attention in the field of luxury good consumption and explore more on the area which will be beneficial for academic and commercial reasons. Purchasing motivation of demanders of goods is influenced by many factors such as family, background, education, experience, geographic distance and imbalanced development of different cities, and this will lead to different luxury purchasing motivations (Zhang 2017). Thus, the current study explores about the professionals’ consumption motives and motivations. Professionals increase the existing of knowledge, apply scientific or artistic concepts and theories, or teach in a systematic manner. Most occupations in this category such as engineers, lawyers, economists, computing professionals, teachers and health professional require skills at graduate and postgraduate education (Department of Census and Statistics 2017). These people have higher potential to demand for more luxury goods. Therefore, understanding their cultural orientation and the motivations to consume luxury good is crucial. There are many researches done regarding the luxury goods consumption internationally. Indeed, there are considerable amount of research done regarding the luxury good consumption of Sri Lankans too. However, the research linking the cultural orientation of Sri Lankans and their luxury good consumption has been researched limitedly; which is the gap to be addressed by the current study.

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4  Research Objectives The main objective of the research is; • To examine the impact of cultural orientation on the societal motivations of luxury good consumption of IT professionals in Sri Lanka. The sub objectives of the research are; • To examine the impact of horizontal individualism on social luxury good consumption motivation of IT professionals in Sri Lanka. • To examine the impact of vertical individualism on social luxury good consumption motivation of IT professionals in Sri Lanka. • To examine the impact of horizontal collectivism on social luxury good consumption motivation of IT professionals in Sri Lanka. • To examine the impact of vertical collectivism on social luxury good consumption motivation of IT professionals in Sri Lanka.

5  Conceptualization (Fig. 1) The conceptual framework has been developed, based on the literature review. The framework is mainly adopted from the study done by Zhang (2017). According to the framework, the cultural orientation is the independent variable and social luxury

Fig. 1  Conceptualization. Source: Zhang (2017). Note: HI Horizontal Individualism, VI Vertical Individualism, HC Horizontal Collectivism, VC Vertical Collectivism, SD Social Demand, DSS Desire for Status Symbol

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good consumption motivation is considered as the dependent variable. Cultural orientation consists of four dimensions; horizontal individualism, vertical individualism, horizontal collectivism and vertical collectivism and social luxury good consumption motivation includes social demand and desire for status symbol.

6  Hypothesis of the Study The following hypotheses have been developed according to the conceptual framework: H1: Horizontal individualism has a significant impact on the societal motivation of luxury good consumption of IT professionals in Sri Lanka. H2: Vertical individualism has a significant impact on the societal motivation of luxury good consumption of IT professionals in Sri Lanka. H3: Horizontal collectivism has a significant impact on the societal motivation of luxury good consumption of IT professionals in Sri Lanka. H4: Vertical collectivism has a significant impact on the societal motivation of luxury good consumption of IT professionals in Sri Lanka.

7  Data and Methodology The data of the current study has been collected from the IT practitioners employed in multiple reputed IT oriented organizations in Sri Lanka. Quantitative research design has been adopted in the study. The quantitative research design is ordinarily linked with the deductive research approach and positivist research philosophy. This approach initiates with a theory and narrows it down to specific hypothesizes that study supposed to test. In reference to that, observations are made to address relevant hypothesizes and it would direct to test hypothesizes with collected data and lastly develop a confirmation about original theory. The population of the study comprised the practitioners in the IT industry in Sri Lanka. Non-probability, convenience sampling method has been utilized in this study. The sample of this study includes 103 individuals from various reputed IT oriented organizations in Sri Lanka. The researcher has continuously collected data from the professionals in IT field, until the required quantity of respondent size was fulfilled. The researcher has collected data from 103 respondents. The instrument employed for the study is structured questionnaire. The questionnaire is entirely based on the theoretical framework adopted by Zhang (2017). All the questions in the questionnaire are close-ended. The questionnaire has been pre-­tested by conducting a pilot study. Through the pilot study, the researchers have ensured the items in the questionnaire are interpreted in an intended way and to acquire that few items have been changed. The questionnaires have been

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distributed to the respondents and they have been given 2 weeks to complete the questionnaire. Data analysis of the study begins with demographic profile of the sample. Afterward, Pearson’s correlation coefficient and regression analysis have been employed to understand the relationship and impact between the variables. All the gathered data of the study were analyzed and interpreted by using Statistical Package for Social Sciences (SPSS).

8  Results and Discussion The reliability of the instrument was tested using Cronbach’s alpha, which is usually considered as reliable when the coefficient is more than 0.6 and if it is less than 0.5 the instrument is unacceptable. All the variables indicated in the questionnaire has more than 0.6 coefficient values and that elaborates reliability of each variable is acceptable and in addition overall research instrument is reliable.

8.1  A Subsection Sample The female and male distribution of respondents through the selected sample is 33 and 67% respectively. Hence, most participants in the study have been identified as male respondents. This is due to the male dominance in the field of IT in Sri Lanka. The majority (50.5%) in the sample is in the age group of 27–30 years old. According to the Department of Census and Statistics (2017) 65.6% of the professionals, which is the majority, is in the age group of 25–44 years old. Therefore, the characteristic of the sample is representing the trend in Sri Lanka. Moreover, 35% in the sample is having postgraduate degree qualifications. 38.8% in the sample is generating an income more than LKR 100,000. It shows that professionals who engage in the sector tend to pursuit higher education, even after their first degree and it might give them possibilities to have pay raises (Table 1). 84.5 percent in the sample owns a luxury product. It implies the great interest of the respondents in the consumption of luxury goods. Majority in the sample possesses at least 3–6 luxury products where 68% have purchased a luxury product in the past year (Table 2).

8.2  Pearson Correlation Coefficients The researcher has adopted Pearson correlation to determine whether there is a relationship between two variables and also to indicate the strength and direction of the relationship.

60 Table 1 Demographic Information

Table 2  Information of luxury good consumption

L. D. A. D. Dissanayake Demographic information Gender Female Male Age 18–20 21–23 24–26 27–30 >30 Education Undergraduate degree Graduate degree Postgraduate degree Other Income 110,000

Frequency Percent 34 69

33 67

1 3 22 52 25

1.0 2.9 21.4 50.5 24.3

28 34 36 5

27.2 33.0 35.0 4.9

7 9 20 14 13 40

6.8 8.7 19.4 13.6 12.6 38.8

Luxury good consumption Frequency Ownership of a luxury brand product Yes 87 No 16 How many luxury products do you own 10 14 0 1 Bought luxury brand products in the past year Yes 70 No 33

Percent 84.5 15.5 41.7 36.9 6.8 13.6 1.0 68.0 32.0

As presented in Table 3, the correlation coefficient value and significant value between the horizontal individualism (1) and social luxury good consumption are r = −0.022 and 0.822 (p > 0.005) respectively. This denotes that there is a negative relationship between the two variables and additionally, it also represents that horizontal individualism has a very week relationship towards the social luxury ­consumption. Furthermore, according to the significant value, it indicates that there is no significant relationship between the two variables.

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Table 3  Correlation coefficients and significant values Correlations HI (1) VI (2) HC (3) VC (4) SLC (5)

Pearson correlation Sig. (2-tailed) Pearson correlation Sig. (2-tailed) Pearson correlation Sig. (2-tailed) Pearson correlation Sig. (2-tailed) Pearson correlation Sig. (2-tailed)

HI (1) 1

VI (2)

0.109 0.273 0.219 0.026 0.186 0.060 −0.022 0.822

1 0.153 0.123 0.112 0.259 0.195 0.048

HC (3)

VC (4)

SLC (5)

1 0.368 0.000 −0.005 0.964

1 −0.038 0.704

1

The vertical individualism (2) indicates Pearson correlation (r) value of 0.195 and significant value of 0.048 towards the social luxury good consumption. This demonstrates a positive relationship between the two variables. Nonetheless, the relationship is still very weak. The p-value similarly indicates a significant relationship between two variables. The variable of horizontal collectivism (3) has correlation coefficient value (r) of −0.005 and sig. Value of 0.964 (p > 0.005. This depicts that there is a negative and very weak relationship between horizontal collectivism towards social luxury good consumption. Additionally, there is no significant relationship between the two variables. The last independent variable of vertical collectivism (4) has a correlation (r) value of −0.038 and significant value of 0.704 (p > 0.005). This explains that there is a still a negative very week relationship towards the social luxury good consumption, while the significant the value indicates that there is no significant relationship between the two variables. Thus, among the four independent variables; horizontal individualism, vertical individualism, horizontal collectivism and vertical collectivism, only vertical individualism has a significant and positive relationship towards social luxury good consumption, where the other three variables have a negative none significant relationship towards social luxury good consumption. According to the Table 4, it shows that the Pearson correlation (r) is 0.049 and significant (p) value is 0.623. It denotes that the cultural orientation (1) has a positive, but still a very week relationship towards social luxury good consumption (2) of IT professionals in Sri Lanka. Moreover, there is no significant relationship between the two variables. This finding highlights a vital and an interesting outcome of luxury good consumption of young Sri Lankan professionals. The societal motivation of them to consume luxury good is not triggered by their cultural orientation.

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Table 4  Correlation coefficients and significant values of model CO (1) SLC (2)

CO (1) 1

Pearson correlation Sig. (2-tailed) Pearson correlation Sig. (2-tailed)

0.049 0.623

SLC (2)

1

Table 5  The model summary Model 1

R 0.207a

R square 0.043

Adjusted R square 0.004

Predictors: (constant), VC, VI, HI, HC

a 

8.3  Regression Analysis The researcher has employed regression analysis to discover variance in predictor variables predict the level of change in the outcome variable. According to Table 5, R Square = 0.043 (Adjusted R Square = 0.004) and that indicates only 4.3% of the variance in the social luxury good consumption motivation is explained by the four predictor variables of the horizontal individualism, vertical individualism, horizontal collectivism and vertical collectivism. In the Table 6, the researcher attempts to determine whether the predictor variables of the study account for significant variance in the outcome variable and in other words statistically significance of regression model. As per to the above table the sig. Value is p > 0.001 (sig. = 0.362). It shows the sig. Value is considerably higher than the sig. Value of p = 0.05 and for that reason, the results demonstrates there is no significant variance between predictor variables and outcome variable which is societal luxury good consumption motivation. The Table 7 demonstrates the coefficient of predictor variables which are horizontal individualism, vertical individualism, horizontal collectivism, and vertical collectivism respectively. Horizontal individualism, horizontal collectivism, and vertical collectivism have negative relationship towards the social luxury good consumption, except vertical individualism which has a positive relationship. The sig. Values resulted in the table represent the horizontal individualism (Unstandardized coefficients B is −0.042 at sig. Value of 0.746), vertical individualism (Unstandardized coefficients B is 0.280 at sig. Value of 0.043), horizontal collectivism (Unstandardized coefficients B is −0.015 at sig. Value of 0.927) and vertical collectivism (Unstandardized coefficients B is −0.064 at sig. Value of 0.634). From these results, the researcher has determined that only vertical individualism is a significant predictor of social luxury good consumption motivation of IT professionals. The other three variables; horizontal individualism, horizontal collectivism, vertical collectivism are not significant predictors of social luxury good consumption motivation of IT professionals.

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The Impact of Cultural Orientation on the Societal Motivations of Luxury Good… Table 6  ANOVA table Model 1

Regression Residual Total

Mean square 0.661 0.603

F 1.097

Sig. 0.362

Dependent variable: Socal_Lux_Con Predictors: (constant), VC, VI, HI, HC Table 7  The coefficient table Model 1 HI VI HC VC

Unstandardized coefficients B −0.042 0.28 −0.015 −0.064

Standardized coefficients Beta −0.033 0.206 −0.01 −0.051

t −0.325 2.049 −0.091 −0.477

Sig. 0.746 0.043 0.927 0.634

Table 8  The coefficient table Model 1 (constant) Cul_Ori

Unstandardized coefficients B 2.644 .104

Standardized coefficients Beta 0.049

t 3.240 0.494

Sig. 0.002 0.623

The Table 8 shows the coefficient of predictor variable of cultural orientation. It has a positive relationship towards social luxury good consumption. The sig. Value stated in the table represents the cultural orientation (Unstandardized coefficients B is 0.104 at sig. Value of 0.623). From this result, the conclusion is drawn that the cultural orientation is not a significant predictor of social luxury good consumption motivation of IT professionals in Sri Lanka (Table 9).

8.4  Hypothesis Testing Table 8 highlights the summary of the hypotheses tested in the study. Hence, only the second hypothesis; vertical individualism has a significant impact on the societal motivation of luxury good consumption of IT professionals in Sri Lanka, is supported where the three other hypotheses are not supported by the study.

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Table 9  The summary of tested hypotheses No Hypotheses H1 Horizontal individualism has a significant impact on the societal motivation of luxury good consumption of IT professionals in Sri Lanka H2 Vertical individualism has a significant impact on the societal motivation of luxury good consumption of IT professionals in Sri Lanka H3 Horizontal collectivism has a significant impact on the societal motivation of luxury good consumption of IT professionals in Sri Lanka H4 Vertical collectivism has a significant impact on the societal motivation of luxury good consumption of IT professionals in Sri Lanka

Results Not supported Supported Not supported Not supported

9  Conclusions The primary objective of the study is to examine the impact of cultural orientation on the societal motivations of luxury good consumption of IT professionals in Sri Lanka. As explained in the findings, the Pearson correlation analysis and regression analysis are used to achieve the objectives and to test four hypotheses. The primary objective of the research is to examine the impact of cultural orientation on the societal motivations of luxury good consumption of IT professionals in Sri Lanka. The cultural orientation has a positive, but still a very week relationship towards social luxury good consumption motivations of IT professionals in Sri Lanka. Moreover, there is no significant relationship between the two variables. Furthermore, cultural orientation is not a significant predictor of social luxury good consumption motivation of IT professionals. These findings highlight a vital and an interesting outcome of luxury good consumption of young Sri Lankan professionals. The societal motivation of them to consume luxury good is not triggered by their cultural orientation. In addition to the primary objective there are four sub objectives; to examine the impact of horizontal individualism, vertical individualism, horizontal collectivism and vertical collectivism (independent variables of the study) have on the social luxury good consumption motivation of IT professionals in Sri Lanka. Consequently, among the four independent variables, only vertical individualism has a significant and positive relationship towards social luxury good consumption. The other three variables have a negative none significant relationship towards social luxury good consumption. Regression analysis concludes that only vertical individualism is a significant predictor of social luxury good consumption motivation of IT professionals in Sri Lanka. The other three variables; horizontal individualism, horizontal collectivism, vertical collectivism are not significant predictors of social luxury good consumption motivation of IT professionals. Thus, only the second hypothesis is supported where the other hypotheses are not supported. The fact that only the vertical individualism has significant relationship with the societal luxury good consumption indicates that the professionals are more concern with their hierarchy, they strive to be distinct and they desire special status by consuming luxury goods. Vertical individualistic cultural oriented people treat themselves as totally

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i­ndependent. Furthermore, they identify that there is inequality existing amongst individuals within the society and they can admit it. May be they need to be independent by consuming luxury goods, which motivate them to purchase more luxury goods. However, the research finding that the cultural orientation is not a significant predictor of social luxury good consumption motivation of IT professionals in Sri Lanka, is contradicting to the findings of Zhang (2017). A similar study has conducted by Zhang (2017) where the researcher has concluded that the cultural orientations do impact on the luxury consumption motivations of young Chinese consumers in London. But the current study shows that cultural orientation has no impact on the societal luxury motivations of IT professionals in Sri Lanka. Thus, the factors which have an impact on the luxury good consumption might be other factors, than the cultural orientation. The future researchers can do further research on this aspect.

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Mooij, M. (2017). Comparing dimensions of national culture for secondary analysis of consumer behavior data of different countries. International Marketing Review, 11(26), 265–254. Mourali, M., Laroche, M., & Pons, F. (2005). Individualistic orientation and consumer susceptibility to interpersonal influence. Journal of Services Marketing, 19(3), 164–173. Richins, M. L. (1994). Valuing things: The public and private meanings of possessions. Journal of Consumer Research, 21(3), 504–521. Richins, M. L., & Dawson, S. A. (1992). Consumer values orientation for materialism and its measurement: Scale development and validation. Journal of Consumer Research, 12(19), 303–316. Singelis, T.  M., Triandis, H.  C., Bhawuk, D., & Gelfand, M.  J. (1995). Horizontal and vertical dimensions of individualism and collectivism: A theoretical and measurement refinement cross-cultural research. The Journal of Comparative Social Science, 29(3), 240–275. Sundie, J. M., Griskevicius, V., Vohs, K. D., Kenrick, D. T., Tybur, J. M., & Beal, D. J. (2011). Peacocks, Porsches, and Thorstein Veblen: Conspicuous consumption as a sexual signaling system. Journal of Personality and Social Psychology, 100(4), 664–680. The Wold Bank. (2018). The World Bank in Sri Lanka. Retrieved January 2, 2019, from https:// www.worldbank.org/en/country/srilanka/overview Triandis, H. C. (1995). Individualism & Collectivism. Boulder, CO: West View Press. Triandis, H.  C., & Gelfland, M.  J. (1998). Converging measurement of horizontal and vertical individualism and collectivism. Journal of Personality and Social Psychology, 74(1), 118–128. Veblen, T. (1899). The theory of the leisure class. Retreived from http://moglen.law.columbia.edu/ LCS/theoryleisureclass.pdf Vigneron, F., & Johnson, L. W. (1999). A review and a conceptual framework of prestige-seeking consumer behavior. Academy of Marketing Science Review, 1999(3), 237–261. Wiedmann, K. P., Hennigs, N., & Siebels, A. (2007). Measuring consumers’ luxury value perception: A cross-cultural framework. Academy of Marketing Science Review, 7, 1–21. Wong, N. Y., & Ahuvia, A. C. (1998). Personal taste and family face: Luxury consumption in confucian and Western societies. Psychology & Marketing, 15(5), 423–441. Yu, D. (2014). Motivations of luxury consumption in America vs. China. Ames: Iowa State University. Zhang, Y. (2017). The acculturation impact on luxury consumption motivations: A case of Chinese young consumers living in the UK. London: Brunel University London.

EMS Implementation: A Theoretical Process Design Approach Ionuț Viorel Herghiligiu and Ioan-Bogdan Robu

Abstract  The organizational sustainability orientation represents the current context need to sustain the future. Hence all the organizational process must integrate a sustainable behavior—that could be fulfilled by implementing an Environmental management system (EMS). The organizational processes identification is not an automatic procedure, but an approach to interpret the company operation. The integration regarding a predefined activity set in a certain process is a choice based on phenomenon monitoring and not on the phenomenon objective existence. Likewise, to implement an EMS through a process perspective it’s very complicated because the literature is limited regarding information’s/knowledge associated with this correlation. Therefore, the main research objective is to develop/propose a theoretical framework regarding the EMS implementation seen as an organizational complex process. Keywords  Environmental management system (EMS) implementation Theoretical framework · Complex process

1  Introduction The organizational sustainability orientation represents the current context need to sustain the future. Hence all the organizational process must integrate a sustainable behavior—that could be fulfilled by implementing an Environmental management system (EMS). Hence the “synergic relation” among EMS and organization could be considered as a fundamental element associated to a stable and viable future organizational development. Hence a correct understanding associated to EMS

I. V. Herghiligiu (*) “Gheorghe Asachi” Technical University of Iaşi, Iaşi, Romania I.-B. Robu Alexandru Ioan Cuza University of Iaşi, Iași, Romania e-mail: [email protected] © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 R. Orăștean et al. (eds.), Organizations and Performance in a Complex World, Springer Proceedings in Business and Economics, https://doi.org/10.1007/978-3-030-50676-6_6

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implementation quality must be a management priority because could generate various benefits (Herghiligiu and Lupu 2015; Herghiligiu and Robu 2019). EMS implementation process sustain the continual improvement associated to environmental performances; therefore organizations must be aware that a correct understanding of an EMS as “a component of the general managerial system that includes the organizational structure, the planning activities, liabilities, practices, procedures, processes and resources for the elaboration, implementation, performance, analysis and maintenance of the environmental policy” (SAR 2005a, b; Lozano and Valles 2007; Teodosiu 2005; Herghiligiu 2013), could substantially improve the competitive state of organizational sustainable orientation (Herghiligiu 2013; Herghiligiu and Robu 2019). Literature approached different aspects concerning the relation between the organizations and environment. This very important relation was clearly formalized through environmental standards development that defined EMS structure (Ionescu 2000, 2005; Kit-Fai et al. 2002; Melnyk et al. 2003; MacDonald 2005; Teodosiu 2005; Rowland-Jones and Cresser 2005; Lupu et al. 2006, 2012; Fortunski 2008; Perotto et al. 2008; Tambovceva 2010, and so on). Several authors like Epstein and Roy (1997) or Boiral and Sala (1998), state and emphasize the fact that the ISO 14000 series (and thus EMS implementation) lead to major organizational benefits: “The ISO 14000 series has the potential to create dramatic improvements in organizational management that extend far beyond the management of organizational environmental impacts…” (Herghiligiu 2013). Thus, taking into consideration the ISO 14001 complexity and certification effects dynamics it can be highlighted this research importance. Analyzing a large number of papers/researches from various international databases (ProQuest, ScienceDirect, SpringerLink, Wiley Online Library, and so on), it could be mention that the following research direction, are approached: 1. environmental certification and EMS implementation (Ionescu 2005; Darnal 2001; Jiang and Bansal 2003); 2. the environmental certifications level on the various international organizations/ level (Christman and Taylor 2001, 2004); 3. environmental certification impact on environmental performance (Lupu et al. 2006, 2012; Hart and Dowell 2010; Rondinelli and Vastag 2000a, b; Ammenberg et al. 2002; Potoski and Prakash 2005; Anton et al. 2004). Concluding the organizational processes identification is not a simple procedure, but an attempt to approach the company operation. The integration regarding a predefined activities set in a certain process is a choice based on phenomenon monitoring and not on the phenomenon objective existence. Likewise, to implement an EMS through a process perspective it’s very complicated because the literature is limited regarding information’s/knowledge associated with this correlation (Herghiligiu 2013). Therefore, based on the research developed by Herghiligiu (2013) the main objective of this paper is to develop/propose a theoretical framework regarding the EMS implementation seen as an organizational complex process.

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2  P  rocess Design: A Theoretical Approach to Organizational EMS Implementation 2.1  Process-Based Approach A process could be characterized as “the preparation activities that transform inputs (HR, equipment, materials, logistic resources, financial resources, and so on) in a product or a service” (Pall 1987)—Fig. 1. Ittner and Larcker (1997) defined this process as “a set of activities that produce together a valuable result for the interested parties—this idea is also emphasized by Oprea and Kifor (2002)” (Herghiligiu 2013). This approaches/definitions, as Bizzo and Bernardi (2003) argue, “could lead us to a process, but it would be an extremely simple concept; the way from theory to practice shows us several aspects of great complexity that can be noticed in case of process implementation” (Herghiligiu 2013). The literature presents the “process-based approach as a more effective method to reach the desired result Oprea and Kifor 2002”. Likewise, Oprea and Kifor (2002) argue that the organizational integration of this principle implies several essential steps (Herghiligiu 2013): 1. “process identification and definition in order to fulfill the desired result/results”; 2. “identification and evaluation of the most important input and output data of the process”; 3. “identification of the interferences of processes and of the organizational functional entities”; 4. “evaluation of the consequences and of the impact that the respective process has on suppliers, customers and on all interested/involved parties”; 5. “clear assignment of liabilities and authorities concerning the process management”; 6. “during the process planning phase, we will take into account: the order of the process phases, the specific activities, the control measures, the need for person-

PROCESS INPUTS

OUTPUTS

HR, echipment, materials, logistic resources, financial resources ...

products services …

Fig. 1  The process outline scheme. Source: Herghiligiu (2013)

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nel training, equipment, methods, information, materials and other resources required in order to attain the desired result (s)”. Juran and Godfrey (1999) noted that process management approach “supposes the existence of three components: (1) the process preparation, (2) the process improvement and (3) the process control. Hammer (2002) states that the process management includes three essential elements: (1) process planning and definition, (2) process implementation, (3) and, respectively, process optimization and control. Silver (2004) considers that the process management and integration are the key elements of any business” (Herghiligiu 2013).

2.2  EMS as Organizational Complex Process The organizational processes identification is a complex procedure and an attempt to interpret the company operation. The difficulty to use the “process” concept is probably explained by the organizational structure subjective nature/architecture (Bizzo and Bernardi 2003; Herghiligiu 2013). “The association between the activities belonging to a certain system and a certain concept/name—a certain process, according to Bizzo and Bernardi (2003), should not represent a matter of concern. The main reason that stresses the decision to aggregate/put together the activities (of a system) into a process (es) has a managerial nature. Thus, the identification regarding a series of activities in order to emphasize the transformations that took place in case of existing sub-systems has as a main objective to monitor, evaluate and improve the functioning method. In order to avoid the possible ambiguities, it is necessary to define the complex process that describes, in a conceptual manner. Therefore, a process can be defined as: a system of activities, subjectively identified, in order to be managed in a holistic and systematic way that uses the resources for the transformation of inputs into outputs” (Herghiligiu 2013). EMS complexity is the one of the most important characteristics (Ionescu 2000; Teodosiu 2005). EMS complexity is a practical characteristic due to the fact that this management system “covers” all organizational activities. Hence EMS must balance and ‘adjust in a synergic way’ the existing organizational (1) policies, (2) the operational and (3) financial needs. The EMS implementation/integration complexity and difficulty reside from its mediation role between the ISO 14001 requirements and the organizations particularities (Herghiligiu 2013). Hence the EMS as a complex process, could be defined as: “a complex process including a system of specific environmental activities/practices, identified in a holistic and systematic way, in order to be continuously monitored, evaluated and analyzed with the main purpose to improve the organizational environmental performances”. Based on all the aspects mention before the following model was developed—Fig. 2 (Herghiligiu 2013). This complex process (the EMS) that mediates the inputs (Fig. 1) into outputs (environmental performance improvement) is influenced likewise by various organizational barriers.

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ISO 14001 REQUIRMENTS

STAKEHOLDERS DEMANDS

ENVIRONMENTAL POLICY DEVELOPMENT

MESUREMENTS, REMEDIES, ANALYSES, IMPROVEMENT

PLANNING

IMPLEMENTATION AND OPERATION

INPUTS

RESOURCE ALLOCATION

IMPROVEMENT OF ENVIRONMENTAL PERFORMANCES AT ORGANIZATION LEVEL

CONTINUAL IMPROVEMENT OF ENVIRONMENTAL MANAGEMENT SYSTEM

OUTPUTS

ORGANISATIONAL BARRIERS / ORGANISATIONAL FACTORS THAT MAY DETERMINE THE IMPLEMENTATION PROCESS OF ENVIRONMENTAL MANAGEMENT SYSTEM AT ORGANISATIONAL LEVEL

Fig. 2 EMS (according to ISO 14001) as a complex process—proposed model. Source: Herghiligiu (2013) Table 1  EMS as a complex process—environmental policy elaboration phase Component Phase sub-phases Environmental — policy development

Input vectors 1. Previous analyses management reports 2. Various environmental aspects 3. Possible environmental impacts 4. Environmental regulations 5. Particular environmental regulationsaccepted by organization 6. Stakeholders involvement 7. Qualified staff 8. Other relevant aspects

Output vectors 1. Environmental policy 2. Organizational database inputs

Source: based on ISO 14001/ISO 14031/ISO 14004/Lupu et  al. (2006)/Ionescu (2000) (Herghiligiu 2013)

To a better understand of EMS model (Fig. 2), the Tables 1, 2, 3 and 4 will analytical present every phase of it—as it follows (Herghiligiu 2013): Hence it can be stated that EMS could be considered a set of elements through which the organizational management can fulfill the environmental objectives. From another angle, an EMS can be seen as a methodology through which organizations operate in a structural manner in order to provide the environmental protection. In its essence, the EMS main objective is to permanently control and reduce the environmental negative impact.

Input vectors 1. Audit reports 2. Environmental aspects 3. Environmental impacts 4. Environmental certifications 5. Environmental regulations 6. Other (optional) environmental important regulations 7. Qualified managers in order to assess the environmental impact 8. Other relevant aspects 1. Legal requirements’ 2. Optional regulations 3. Trained managers in the environmental regulation field 4. Other relevant aspects 1. Identified environmental aspects 2. Possible environmental impacts 3. Financial aspects associated to environmental issue 4. Available technological choices 5. Trained managers 6. Other relevant aspects 1. Environmental objectives and targets 2. Organizational structure 3. Other relevant aspects 1. Environmental management program (s) 2. Organizational database inputs

1. Environmental objectives and targets 2. Organizational database inputs

1. Environmental legal requirements 2. Organizational database inputs

Output vectors 1. Identified environmental aspects 2. Possible environmental impacts 3. Organizational database inputs

Source: based on ISO 14001/ISO 14031/ISO 14004/Lupu et al. (2006)/Ionescu (2000) (Herghiligiu 2013)

Environmental management program (s) development

Environmental objectives and targets development

Legal regulations identification

Phase Component sub-phases Planning Environmental aspects identification

Table 2  EMS as a complex system—planning phase

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Implementation and operation

Phase

Input vectors

Output vectors

1. Environmental objectives and targets 2. Internal communicational requirements 3. External communicational requirements 4. Environmental trained HR 5. Other relevant aspects

1. Environmental management specific documents—internally 2. Environmental management specific documents—externally 3. Environmental objectives and targets 4. Environmental internal communication 5. Environmental external communication 6. Environmental trained HR 7. Environmental operational control process 8. Organizational emergency cases situations and the response capacity 9. Other relevant aspects

Environmental documentation

Environmental document control

1. Internal requirements relevant responses 2. Externally requirements relevant responses 3. Organizational database inputs

(continued)

1. Eenvironmental management specific documents—internally 2. Environmental management specific documents—externally 3. Organizational database inputs

1. Organizational communication process inputs 2. Organizational communication process outputs’ 3. Organizational database inputs

1. Environmental objectives and targets 2. Internal communicational requirements 3. External communicational requirements 4. Commited managers 5. Other relevant aspects

Environmental communication

1. Environmental responsibilities 2. Organizational database inputs

1. Trained organizational human resource (HR) 2. HR environmental knowledge/HR environmental competence 3. Organizational database inputs

1. Actual organizational liabilities 2. Organisational structure 3. Previous audits 4. Commited managers 5. Other relevant aspects

1. Organisational managers Environmental training programs 2. Previous training sessions reports 3. Environmental objectives and targets development 4. Managers trained to implement environmental trainings 5. Required environmental documentation 6. Other relevant aspects

Environmental liabilities identification

Component sub-phases

Table 3  EMS as a complex system—implementation and operation phase

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1. Training plan associated to emergency case situations and response capacity 2. Organizational database inputs

1. Relevant environmental aspects 2. Possible environmental impacts 3. Previous emergency case situations programs 4. Environmental trained managers 5. Other relevant aspects

Preparing for emergency situations and response capacity

Output vectors 1. Relevant internal requirements responses 2. Relevant external requirements responses 3. Organizational database inputs

Input vectors

1. HR environmental responsibilities 2. Environmental objectives and targets 3. Relevant environmental aspects 4. Possible environmental impacts 5. Environmental qualified managers 6. Other relevant aspects

Operational control

Component sub-phases

Source: based on ISO 14001/ISO 14031/ISO 14004/Lupu et al. (2006)/Ionescu (2000) (Herghiligiu 2013)

Phase

Table 3 (continued)

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EMS audit

Organizational database inputs maintenance

Prevention and corrective measures

Component sub-phases Monitoring and measurement

Input vectors 1. Audit internal procedures 2. Environmental objectives and targets 3. Environmental regulations 4. Relevanrt environmental aspects 5. Possible environmental impacts 6. Previous environmental measurements reports 7. Managerial practices 8. Current non-compliances reports 9. Environmental trained managers—in monitoring and measurement process 10. Other relevant aspects 1. Environmental management programs 2. Environmental non-compliance reports 3. EMS other problems 4. Managerial practices 5. Environmental trained managers—in prevention and corrective measures 6. Other relevant aspects 1. Environmental non-compliance reports 2. Management practices 3. Trained managers 4. Other relevant aspects 1. Organizational processes that need auditing 2. Audit procedures 3. Environmental trained managers—in audit 4. Other relevant aspects

Source: based on ISO 14001/ISO 14031/ISO 14004/Lupu et al. (2006)/Ionescu (2000) (Herghiligiu 2013)

Phase Measurements, corrective measures, analyses, improvement

Table 4  EMS as a complex process—measurements, corrective measures, analyses, improvement phase

1. Reports containing the results attained from the auditing 2. Organizational database inputs

1. Stakeholders reports 2. Organizational database inputs

1. Reports containing the current non-compliances 2. Organizational database inputs

Output vectors 1. Monitored and quantified current processes 2. Organizational database inputs

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3  Conclusions Concluding the “EMS approach as a organizational complex process represents an original demarche—that doesn’t exist in the specialty literature—of understanding in a simple, unified and synthetic manner this organizational change phenomenon. Therefore, as a synthesis of this work the EMS it can be considered as a complex process composed from a system of activities/practices identified in a holistic and systematic manner so that it can be monitored, evaluated and analyzed continuously to improve the organization environmental performances. In the same context, this complex process that mediates the transformation of inputs (human resources, equipment, materials, logistics resources, financial resources, and so on) into outputs (improved environmental performances) is determined by the specific organizational barriers that influence transformations at the existing subsystems levels” (Herghiligiu and Lupu 2015). Likewise, it can be stated that the organizational EMS implementation process could be seen as “a set of elements through which it can be fulfill the managerial process in order to attain the desired environmental objectives and targets” (Herghiligiu 2013). Acknowledgement  This work was supported by a National Research Grants of the “Gheorghe Asachi” Technical University of Iasi, Romania, project number GnaC2018_119. The authors also would like to thank the participants of the International symposium “Science Universe” 8th Edition, October 22, Iasi, Romania, 2017, for their valuable comments on prior versions of this research.

References Ammenberg, J., Hjelm, O., & Quotes, P. (2002). The connection between environmental management systems and continual environmental performance improvements. Corporate Environmental Strategy, 9, 183–192. Anton, W. R. Q., Deltas, G., & Khanna, M. (2004). Incentives for environmental self-regulation and implications for environmental performance. Journal of Environmental Economics and Management, 48, 632–654. Bizzo, S., & Bernardi, G. (2003). Process management practices and quality system standard. Business Process Management Journal, 9(2), 149–169. Boiral, O., & Sala, J. M. (1998). Environmental management: Should industry adopt ISO 14001? Business Horizons, 41, 57–64. Christman, P., & Taylor, G. (2001). Globalization and environment: Strategies for international voluntary environmental initiatives. Academy of Management Executive, 16(3), 121–135. Christman, P., & Taylor, G. (2004). Environmental self-regulation in the global economy: The role of firm capabilities. Research in Global Strategic Management, 9, 119–145. Darnal, N. (2001). Adopting ISO 14001: Why some firms mandate certification while other encourage it. In 23rd Public Policy Analysis and Public Policy: Making the Connection, pp. 1–22, Washington, DC, USA. Epstein, M. J., & Roy, M. J. (1997). Using ISO 14000 for improved organizational learning and environmental management. Environmental Quality Management, 7, 21–30.

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Fortunski, B. (2008). Does the environmental management standard ISO 14001 stimulate sustainable development? An example from the energy sector in Poland. Management of Environmental Quality: An International Journal, 19(2), 204–212. Hammer, M. (2002). Process management and the future of six sigma. MIT Sloan Management Review, 43(2), 26–32. Hart, S.  L., & Dowell, G. (2010). Invited editorial: A natural-resource-based view of the firm: Fifteen years after. Journal of Management, 37, 1464–1479. Herghiligiu, I. V. (2013). Researches regarding environmental management system as a complex process at organization’s level, PhD thesis, University of Angers, France. Retrieved from http:// laris.univ-angers.fr/_resources/logo/TheseHerghiligiuIonut.pdf/https://tel.archives-ouvertes. fr/tel-01019634/file/THESE-HERGHULIGIU_2.pdf Herghiligiu, I. V., & Lupu, L. M. (2015). A theoretical framework regarding the Environmental management system as organizational complex process. In 7th European Exhibition of Creativity and Innovation, Iaşi Romania. Herghiligiu, I.  V., & Robu, I.  B. (2019). Predictive analysis on the relationship corporate environmental orientation and EMS implementation quality. In 33rd International Business Information Management Association (IBIMA) conference, Granada, Spain, paper in review process. Ionescu, C. (2000). Cum să contruim şi să implementam un sistem de management de mediu în conformitate cu ISO 14001. Bucharest: Economică. Ionescu, C. (2005). Managementul mediului: ISO 14001: 2004, calea spre excelenţă. Bucharest: Economică. Ittner, C. D., & Larcker, D. F. (1997). The performance effects of process management techniques. Management Science, 43(4), 522–534. Jiang, R. J., & Bansal, P. (2003). Seeing the need for ISO 14001. Journal of Management Studies, 40(4), 1047–1067. Juran, J. M., & Godfrey, A. B. (1999). Juran’s quality handbook. New York: McGraw-Hill. Kit-Fai, P., Ip-Kee, H., Lau, H. C. W., Hang-Wai, L., & Lewis, W. G. (2002). Development of an EMS planning framework for environmental management practices. The International Journal of Quality & Reliability Management, 19(6/7), 688–709. Lozano, M., & Valles, J. (2007). An analysis of the implementation of an environmental management system in a local public administration. Journal of Environmental Management, 82, 495–511. Lupu, M. L., Oniciuc, N., Rusu, B., & Rusu, C. (2006). Sistemul de indicatori de performanţă de mediu. Iaşi: Performantica. Lupu, M. L., Trofin, O., & Trofin, N. (2012). Environmental performance - part of management performance. Environmental Engineering and Management Journal, 11(2), 393–405. MacDonald, J. P. (2005). Strategic sustainable development using the ISO 14001 Standard. Journal of Cleaner Production, 13, 631–643. Melnyk, S.  A., Sroufe, R.  P., & Calantone, R. (2003). Assessing the impact of environmental management systems on corporate and environmental performance. Journal of Operations Management, 21(3), 329–351. Oprea, C., & Kifor, C. V. (2002). Managementul Calităţii. Sibiu: “Lucian Blaga”. Pall, G. (1987). Quality process management. Prentice Hall: Englewood Cliffs, NJ. Perotto, E., Canziani, R., Marchesi, R., & Butelli, P. (2008). Environmental performance, indicators and measurement uncertainty in EMS context: A case study. Journal of Cleaner Production, 16, 517–530. Potoski, M., & Prakash, A. (2005). Covenants with weak swords: ISO 14001 and facilities’ environmental performance. Journal of Policy Analysis and Management, 24, 745–769. Rondinelli, D., & Vastag, G. (2000a). Panacea, common sense, or just a label? – the value of environmental management systems (ISO 14001): A case study at the University of Gavle, Sweden. Journal of Cleaner Production, 16(3), 299–309.

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Rondinelli, D., & Vastag, G. (2000b). Panacea, common sense, or just a label? The value of ISO 14001 environmental management systems. European Management Journal, 18(5), 499–510. Rowland-Jones, R., & Cresser, M. (2005). An evaluation of current environmental management systems as indicators of environmental performance. Management of Environmental Quality: An International Journal, 16(3), 211–219. Silver, E. (2004). Process management instead of operations management. Manufacturing & Service Operations Management, 6(4), 273–279. Standards Association of Romania. SAR. (2005a). Sisteme de management de mediu. Cerinţe cu ghid de utilizare, SR EN ISO 14001. Standards Association of Romania. SAR. (2005b). Sisteme de management de mediu. Linii directoare referitoare la principii, sisteme şi tehnici de aplicare, SR EN ISO 14004. Tambovceva, T. (2010). Assessment model of environmental management: A case study of construction enterprises in Latvia. Economics and Management, 15, 799–806. Teodosiu, C. (2005). Management integrat al mediului (2nd ed.). Iaşi: Ecozone.

Information Areas in Logistics Supply Chain Management Marta Kadłubek

Abstract Proper identification of information needs in logistics activities contributes to the improvement of both the entire logistics supply chain and its individual links. The importance of information in logistics processes is increasing. We are dealing with the growing pace of the information process itself. The effects of proper management of logistics information are visible especially in such areas as: inventory management, storage or distribution. Information flows are an integral part of any logistics supply chain. The article presents selected results of research on information areas important for the functioning and management of the logistics supply chain, implemented in enterprises in southern Poland. Empirical research was performed on the basis of anonymous data obtained from surveys addressed to selected 53 companies functioning in supply chains as chain links. The questionnaire form was addressed individually to the staff responsible for management in over 900 companies in 2017–2018. Fifty-three complete surveys were included as the basis for empirical research. Keywords  Information · Management · Logistics supply chain

1  Introduction Contemporary logistic supply chains are the sphere where it is necessary to take on new challenges and advantage of new opportunities. The organization and coordination of activities in the sphere of logistics is currently strongly dependent on the flow of information, through which it is possible to identify the most important points in the supply chain and to shape efficient and effective flows between them (Szymczak 2007). In the era of global competition and the growing requirements of customers and contractors, enterprises must be equipped with a huge amount of various types of information on the processes occurring in the logistics supply chain where they are functioning (Pires et  al. 2001; Skowron-Grabowska 2010). The M. Kadłubek (*) Czestochowa University of Technology, Faculty of Management, Częstochowa, Poland © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 R. Orăștean et al. (eds.), Organizations and Performance in a Complex World, Springer Proceedings in Business and Economics, https://doi.org/10.1007/978-3-030-50676-6_7

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information that is particularly important from the logistics point of view is generated on the basis of activities forming logistic processes that concern the acceptance and execution of recipients’ orders. The aim of the article is to present selected results of research on information areas important for the functioning and management of a logistics supply chain, implemented in enterprises in southern Poland.

2  T  heoretical Basis of Information Area in Logistics Supply Chain Management The communication revolution is the sign of our times. New, global socio-economic systems today are characterized by a significant degree of technical, technological and information development (Cohen and Roussel 2013). The twenty-first century has brought many innovations into the economic sphere, including modern computer and telecommunications technologies that have become an immanent component of the logistics supply chain infrastructure (Ballou 2007; Carter et al. 2017). In logistics, as a sector of the economy in the growth phase in most European Union countries, there are numerous challenges in the field of information. A prerequisite for the proper functioning of the logistics information of supply chains is access to information, which is an indispensable element of decision-making processes. From the perspective of this article, clear and binding designation of the logistics supply chain is presented in the definition proposed by APICS (The Association for Operations Management). According to AIPCS, the logistics supply chain is a network used to deliver products and provide services from the level of raw material to the level of the final buyer by means of information processing, physical distribution and cash (Bozarth and Handfield 2007). This definition clearly underlines the importance of information in logistics. It provides the basis for further consideration on this subject. In the logistics supply chain, there are material flows, financial flows and information flows supporting the previous ones (Witkowski 2010). The location of information streams in relation to the other elements of the logistics supply chain is presented in Fig. 1. The necessary condition for the exchange of goods between the sender and the recipient is a two-way exchange of information, which initiates the flow of goods (Rushton et al. 2017). It begins even before the goods are shipped and is also continued after the goods have arrived at the collection point. In addition, as shown in Fig. 1, information flows parallel to the flow of goods and finances, which in practice means that neither physical nor monetary flows could be realized without the simultaneous occurrence of information transfer. It should be taken into account that the maximum integration of the information base, facilitates the physical integration of logistics processes (Kisperska-Moroń et al. 2017). Information flows in the enterprise include information: marketing, financial, purchasing, related to distribution, information for technical documentation and related to manufacturing.

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Fig. 1  Information flows in the logistics supply chain. Source: Own elaboration

The area of information integration is extremely beneficial for the network of cooperating partners, which consists in such an aggregation of data at the disposal of individual partners, to illustrate the specificity of business processes, markets and final buyers in the most precise way (Pawar et al. 2016). Integration should cover the entire logistics supply chain (Rutkowski 2016). In fact, this type of configuration determines the great importance of information flows in the chain. Logistic information flows are key element of the process of planning and organizing of effective supply chains (Ciesielski 2010). Information is a factor that integrates particular links in the logistics supply chain. It constitutes, apart from labor, land and capital, an indispensable element of the production process. Figure 2 presents the information as one of the production factors and the purposes for which it is used. Figure 2 indicates that information flows occur in both internal and external relations, thus creating a specific foundation of the enterprise management process. Information flows in the internal cross-section refer to the overall activity of a given entity, in particular to supply, production and distribution activities (Hines 2004). External relations, in turn, cover all kinds of connections between suppliers and customers, integrating all links in the supply chain (Nowakowska-Grunt 2010). The information sent is a starting point for managerial decisions taken at the operational, tactical and strategic level (Jelonek 2018). Information flows serve to implement decision-making, executive and communication goals (related to the exchange of messages between working groups and individual employees). The combination of these objectives is the basis for rationalization of the logistics supply chain. In logistics, particularly important is information such as on the subjects as below (Gattorna 2015): • • • •

location of customers, suppliers, producers, warehouses, etc., the size of the order and the amount of transport costs, the level of stocks collected in individual links of the chain, carriers and services provided by them.

The scope of information available to individual entities is diverse, as there is a situation between the sender and the recipient in which one of the entities has more

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Fig. 2  Objectives of information flows. Source: Own elaboration based on (Szymczak 2007)

information than the other. Privileged in terms of the wealth of information possessed, the position of a given entity in relation to another entity, often determines the competitiveness of these organizations. Ignorance of individual participants in the logistics process causes that modern enterprises compete with each other not only for customers, but also for information sources. An informational advantage, understood as the ability to collect, process and share information that allows to overcome competition or streamline the entire logistics process, is a condition for the success of activities within the supply chain. Integration, as it is between logistics as a process and information technology and its tools, makes the issue of IT systems and their importance for the proper functioning of several links related to logistics operations cease to be seen only as an auxiliary element. In this case, information technology even becomes a platform that rationalizes the operation of the entire logistics supply chain in a comprehensive manner. The information system functioning within the logistics creates a kind of core, which is the basis for the activity of modern business entities belonging to a given logistics supply chain. In relation to this, it can be emphasized clearly that the technological progress in the area of information systems is the basic determinant of the development of logistics (Chopra and Meindl 2016). Companies use in their activities a variety of IT solutions, among which there are both specialized and dedicated to the logistics area of the company’s activities programs and applications, as well as typical solutions also applicable in other sectors of the economy. The examples of information technologies for integrated supply chain that may have an important role in logistics management in the future are as below: • ERP (Enterprise Resources Planning)—management through resource planning, covers all aspects of enterprise management, • WMS (Warehouse Management System)—system for management of inventory in warehouse, • CRM (Customer Relationship Management)—a business strategy which helps in comprehensively understanding customer needs, • SCM (Supply Chain Management)—electronic supply chain management systems that allow to control the flow of goods,

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• EDI (Electronic Data Interchange)—electronic data exchange from an IT system to another IT system using standard, accepted formats, • MES (Manufacturing Execution System)—systems using information technology, software, electronic devices and automation elements, enable effective collection of information in real time directly from production stations and their transfer to the business area., • EDI (Electronic Data Interchange)—automatic exchange of data and documents between various computer systems using fixed message formats, • EDW (Electronic Data Warehouse)—data warehouse, IT tool supporting the decision-making process, • BI (Business Intelligence)—applications used, among others, for transforming data into information, conducting business analyzes, reporting and information integration, • MIS (Management Information Systems)—a computer system that collects and analyzes data, and then passes them on to decision-makers in the form of reports.

3  R  esults of Surveys on Information Area in Logistics Supply Chain Management Empirical research was performed based on anonymous data obtained from the surveys. The target group of the surveyed enterprises were entities located in southern Poland in the Silesian Voivodeship. The survey was addressed to selected 53 companies functioning in supply chains as a chain link. The questionnaire form was addressed individually to the staff responsible for management in over 900 companies in 2017–2018. The return of the questionnaires was at the level exceeding 20%, but some of the surveys were not filled in completely. Fifty-three complete surveys were included as the basis for empirical research. The statistical analyzes carried out were made using the PS IMAGO software (formerly SPSS). In the research the methods of structural analysis and correlation were used. Fifty-three enterprises from various branches of the national economy participated in the survey, although enterprises from the agriculture and food sector were dominating (almost 1/3 of all respondents). The surveyed enterprises also represented various legal and organizational forms of running a business, although nearly 60% of the respondents were limited liability companies, and in 13% there were joint stock companies. The results of surveys on selected issues are presented below, namely: • scope of logistics processes and activities carried out by enterprises as links in the logistics supply chain, • integration of logistics activities in enterprises as links in the logistics supply chain,

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• employee competencies that can contribute to the integration of logistic activities in the enterprise, • assessment of the essence of information flow for the proper functioning of the logistics supply chain, • the most important communication methods used in the enterprises. Then the following statistical measurements were carried out: • dependency measurements (contingency coefficients) between IT systems used in the enterprise and subjective assessment of the occurrence of logistics competences in the surveyed enterprises, • dependency measurements (contingency coefficients) between IT support for communication in the company and subjective assessment of the occurrence of logistics competences in the surveyed enterprises. According to the first considered issue, more than half of the surveyed companies as a link in logistics supply chain implemented many different logistic processes and activities, i.e.: storage of finished products and distribution of finished products to customers or intermediate point (over 80% of respondents), supplying the company with raw materials, materials and components of manufactured products and storage of raw materials, materials and components of manufactured products (77.4% of indications), supply of raw materials, materials and components to places of their consumption in current production (64.1%) and after-sales service (nearly 53%). Detailed results are presented in Table 1. The surveyed enterprises have a very high awareness of the need to integrate logistics activities for the proper development of the logistics supply chain (see Fig. 3). Two thirds of the surveyed companies decided that the integration of logistics activities is essential for the proper functioning of the supply chain, of which 35.29% of the respondents clearly shared this view. Table 1  The scope of logistic processes and activities realized in the enterprise as links in the logistics supply chain in the light of empirical research Logistics processes and activities realized in the enterprise Supplying the company with raw materials, materials and components of manufactured products Storage of raw materials, materials and components of manufactured products Providing raw materials, materials and components to the places where they are used in current production Storage of finished products Distribution of finished products to customers or intermediate point After-sales service

Responses (in %) Lack of data Yes No (in %) 77.4 18.8 3.8 77.4 18.8

3.8

64.1 32.1

3.8

83.0 13.2 81.1 15.1

3.8 3.8

52.8 43.4

3.8

Source: Own elaboration based on the results of questionnaire surveys

Information Areas in Logistics Supply Chain Management Fig. 3  Do you think that the integration of logistics activities is essential for the proper functioning of the logistics supply chain? Source: Own elaboration based on the results of questionnaire surveys

85

29%

36%

4% 31%

definitely yes

rather yes

defintely no

I have no opinion

Table 2  Employees’ competences that can contribute the most to the integration of logistics activities in the enterprise in the light of empirical research Employees’ competences Ability to interact with other employees Computer skills Knowledge about the structure of the logistics system in the enterprise Ability to communicate Ability to deal with stress Focus on self-development

Responses (in %) Yes 66.7 68.6 43.1

No 3.3 1.4 6.9

56.9 52.9 15.7

3.1 7.1 4.3

Source: Own elaboration based on the results of questionnaire surveys

Among the competences of employees which may contribute the most to the integration of logistics activities in the supply chain - the surveyed respondents indicated (see Table  2) in the order: computer skills (68.6% of responses), ability to interact with other employees (66.7%), ability to communicate (56.9%) and ability to deal with stress (52.9%). Computer skills are especially important in enterprises using IT systems supporting logistic supply chain processes. Nearly 45% of surveyed enterprises indicated that they use IT systems, i.e. ERP (27.3%), SCM (18.2%), CRM (13.6%), MES (4.5%), WMS (4.5%), EDI (9.1%). In addition, 75% of respondents indicated that IT systems support the communication process between the company and the company’s employees (73.1% of indications), company’s customers (74.1%) and suppliers (75%). The efficient flow of information is, according to 92% of the surveyed enterprises, necessary for the proper functioning of the logistics supply chain (see Fig. 4). The efficient flow of information in the surveyed enterprises ensures efficient communication methods. From a wide range of different methods of communication, the respondents indicated as the 3 most often used in the enterprise, such as: direct contact, telephone contact and e-mail (see Fig. 5). It is also worth noting that among the methods of communication with customers and suppliers, respondents also indicated letter correspondence (66% and 62% respectively) and a fax (respec-

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Fig. 4  Do you think that the efficient flow of information is necessary for the proper functioning of the logistics supply chain? Source: Own elaboration based on the results of questionnaire surveys

36%

56%

definitely yes

internal communication

rather yes

I have no opinion

100 95,9

67,3 90

with customers

70

94

76 with suppliers

98

70 0

20

40 via e-mail

60 telephone

80

100

120

direct contact

Fig. 5 The most important communication methods used in the enterprise in internal communication, with customers and suppliers in the light of questionnaire surveys (in %). Source: Own elaboration based on the results of questionnaire surveys

tively: 32% and 46% of indications). In turn, among respondents used in the surveyed enterprises, the respondents also indicated an information board (26.5% of indications). Due to the fact that most variables in the questionnaire study were discrete (measured on the nominal or ordinal scale), therefore correlation measures based on chi-square statistics were used to study the relationships between them - by assessing the linkage of qualitative variables, the two-dimensional distribution of the variable is included in the cross table (contingency table), in which we place partial counts (number of units with a given variant of one variable with a given variant of the second variable). To assess the strength and possibly the direction of the correlation, the meters adapted to the measurement scale of the issues were used (it always adapts to this variable, which is measured on the lower measuring scale). In the research, contingency coefficients have been calculated for variables measured on the nominal scale, which allow the assessment of dependence (they do not examine its direction). If the value of this coefficient is 0, it means no dependencies between variables (variables are not related to each other). The value is close to 1 means that there is a very strong relationship between variables (Howell 2006).

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Table 3  Measures of dependencies (contingency coefficients) between IT systems used in the enterprise and subjective assessment of the occurrence of logistics competences in the surveyed enterprises Subjective assessment of the occurrence of logistics competences in the surveyed enterprises Responding to changing customer needs Adaptation to market requirements Elimination of ineffective resources and activities Efficient flow of information Integration of individual departments of the enterprise

IT systems used in enterprise RP CM CRM MES MS 0.055 0.060 0.371 0.212 0.212 0.165 0.033 0.400 0.229 0.229 0.451 0.590 0.299 0.286 0.286 0.550 0.574 0.400 0.229 0.229 0.361 0.601 0.400 0.321 0.321

DI 0.368 0.361 0.619 0.550 0.443

Source: Own elaboration based on the results of questionnaire surveys

Table 4 Measures of dependencies (contingency coefficients) between supporting IT communication in an enterprise and subjective assessment of the occurrence of logistics competences in the surveyed enterprises Subjective assessment of the occurrence of logistics competences in the surveyed enterprises Responding to changing customer needs Adaptation to market requirements Elimination of ineffective resources and activities Efficient flow of information Integration of individual departments of the enterprise

Do IT systems support the communication process between the company and the stakeholders listed below? Employees Customers Providers 0.387 0.273 0.318 0.171 0.020 0.309 0.509 0.506 0.658 0.594 0.341

0.554 0.456

0.598 0.407

Source: Own elaboration based on the results of questionnaire surveys

The research results presented in Table 3 indicate that the IT systems used in the enterprise provide them with an efficient flow of information. The survey shows that in the subjective assessment of respondents, the efficient flow of information is most strongly related to the SCM system (Cp = 0.574), ERP and EDI (Cp = 0.550). However, in the subjective assessment of the surveyed enterprises, the use of information systems is poorly related to responding to the changing needs of customers and adapting to market requirements. The correlation coefficients presented in Table 4 indicate a significant correlation between the use of IT systems in communication with suppliers and the elimination of ineffective resources and activities (Cp = 0.658) and efficient information flow (Cp = 0.598). The presence of such dependencies of moderate strength is also characteristic for employees and customers.

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4  Conclusions IT systems facilitate cooperation between companies in the supply chain. Information about customers behavior on the market, due to the use of IT systems, is transformed into an extremely useful knowledge that helps the company prepare a new, even more attractive offer. The ability to respond in a flexible way to changes occurring in the company's environment is a determinant of the role that a system that collects and processes all kinds of information has to fulfill. Obtained results of research indicate, inter alia, that information management in supply chains affects the performance of various types of improvements in such areas of operation of economic entities as: inventories, storage, distribution. The effects in the area of shaping warehouse management combined with more accurate production scheduling result in lower costs, especially in the case of the supplier-­ producer. Shorter supply cycles are a factor increasing the competitiveness of a given entity. One of the most important benefits in distribution management is time saving. Fewer complaints of intervention are also lower costs. In the sphere of storage, information generally increases the productivity of the warehouse. In addition, the information releases the potential to streamline cash flow, which in turn results in an increase in working capital. With a shorter delivery time, it is possible to prepare invoices in advance, which results in the entire sale and purchase process. The benefits achieved thanks to such changes are: smooth flow of goods, minimization of stocks, maximization of profit and improvement of service quality—visible in the whole chain (Kadłubek 2018; Harrison and Hoek 2011). The key to achieving a better competitive position is appropriate, accurate and timely information. IT systems, in turn, constitute a measure that enables the growth of the company’s competitiveness. Reliable and quickly available information that accompanies the transaction creates the added value of the product. It helps participants in the logistics supply chain to optimize action plans, thanks to which they can achieve significant benefits (Lambert 2008). The companies surveyed with their practices partially confirm the translation of the use of IT systems to support the operation of supply chains, because only 45% of enterprises use IT systems. Information systems supporting the functioning of the supply chain refer to separate phenomena and facts that take place at a given time. Their main role is to ensure monitoring of logistic processes, which determines their proper supervision. Information is in fact a binder without which one cannot talk about efficiently functioning supply chains and full integration of logistic activities of individual links (Świerczek 2008). One of the basic functions of information in the logistics supply chain is to provide the organization’s managers with the ability to more closely observe physical and monetary flows, so that they can manage them more efficiently (Singh 2011). It’s so-called visualization is, next to the consideration (consisting in the implementation of physical processes of certain virtual processes) and the c­ reation of new relationships with the customer, a way to increase the value through information. The interest in providing the company with access to fast, reliable and reliable information is growing. This happens, among others due to the fact that the informa-

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tion management area has become an almost equally attractive way for competing entities to reduce operating costs, such as modernization of production or reduction of employment. It is undeniable that the logistics system is based on information provided in the most accurate and quick way. The role of information flow area in logistics is increasingly important. This process, due to the emergence of the latest information technologies, gains in importance almost overnight. There is a real challenge for logisticians, because they bear the responsibility of organizing appropriate logistic systems.

References Ballou, R. (2007). The evolution and future of logistics and supply chain management. European Business Review, 19(4), 332–348. Bozarth, C., & Handfield, R. B. (2007). Wprowadzenie do zarządzania operacjami i łańcuchem dostaw. Gliwice: Helion – One Press. Carter, C. R., Kosmol, T., & Kaufmann, L. (2017). Toward a supply chain practice view. Journal of Supply Chain Management, 53(1), 114–122. Chopra, S., & Meindl, P. (2016). Supply chain management. Strategy, planning, and operation. Upper Saddle River: Pearson Education. Ciesielski, M. (2010). Strategiczna rola łańcuchów dostaw. In M. Ciesielski & J. Długosz (Eds.), Strategie łańcuchów dostaw (pp. 32–48). Warszawa: PWE. Cohen, S., & Roussel, J. (2013). Strategic supply chain management: The five core disciplines for top performance. New York: McGraw-Hill. Gattorna, J. (2015). Dynamic supply chains: How to design, build and manage people-centric value networks. Harlow: FT Press. Harrison, A., & Hoek, R. V. (2011). Logistics management and strategy: Competing through the supply chain. Harlow: Pearson Education Limited. Hines, T. (2004). Supply chain strategies. Customer-driven and customer-focused. Oxford: Elsevier Butterworth-Heinemann. Howell, D. (2006). Statistical methods for psychology. Pacific Grove: Thomson Learning. Jelonek, D. (2018). Systemy informacyjne zarządzania przedsiębiorswem. Perspektywy strategii i tworzenia wartości. Warszawa: PWE. Kadłubek, M. (2018). The essence of quality in corporate logistics management. Scientific Quarterly Organization and Management, 3(43), 17–30. Kisperska-Moroń, D., Niestrój, K., & Świtała, M. (2017). Budowanie łańcuch dostaw jutra w świetle teorii i wyników badań. Katowice: Wydawnictwo Uniwersytetu Ekonomicznego w Katowicach. Lambert, D.  M. (2008). Supply chain management: Processes, partnerships, performance. Sarasota: Supply Chain Management Institute. Nowakowska-Grunt, J. (2010). Operatorzy logistyczni a efekt byczego bicza w łańcuchu dostaw. Logistyka, 4, 113–118. Pawar, K., Rogers, H., Potter, A., & Naim, M. (2016). Developments in logistics and supply chain management. London: Palgrave McMillan. Pires, S.  R. I., Bremer, C., Santa Eulalia, L., & Goulart, C. (2001). Supply chain and virtual enterprise: Comparison, migration and a case study. International Journal of Logistics: Research and Applications, 4(3), 297–311. Rushton, A., Croucher, P., & Baker, P. (2017). The handbook of logistics and distribution management: Understanding the supply chain. London: Kogan Page. Rutkowski, K. (2016). Zarządzanie łańcuchem dostaw w XXI wieku: w poszukiwaniu nowych źródeł przewagi konkurencyjne. Warszawa: Oficyna Wydawnicza SGH.

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Singh, R. (2011). Developing the framework for coordination in supply chain in SME’s. Business Process Management Journal, 17(4), 619–638. Skowron-Grabowska, B. (2010). Centra logistyczne w łańcuchach dostaw. Warszawa: PWE. Świerczek, A. (2008). Koncepcja materiałowego i informacyjnego punktu rozdziału w łańcuchu logistycznym kopalni węgla kamiennego. In T.  Janiak & J.  Ogrodowczyk (Eds.), Nowe wyzwania – nowe rozwiązania. Polski Kongres Logistyczny Logistics 2008. Poznań: Instytut Logistyki i Magazynowania w Poznaniu, Materiały konferencyjne. Szymczak, M. (2007). Informatyzacja zarządzania logistycznego. In E.  Gołembska (Ed.), Kompendium wiedzy o logistyce. Warszawa: PWN. Witkowski, J. (2010). Zarządzanie łańcuchem dostaw. Koncepcje, procedury, doświadczenia. Warszawa: PWE.

Measuring Female Entrepreneurs’ Happiness from Online Feedback Esra Kahya Ozyirmidokuz, Kumru Uyar, and Eduard Alexandru Stoica

Abstract  Entrepreneurship provides an important solution to the unemployment problem. This is also very important in economic growth. It has financial, psychological and social risks while taking the situation into consideration. In addition, women’s participation in the work force has a vital importance in Turkey’s national income. Nearly 8.5% of women are in management, or in decision-making positions. It is important to measure happiness of these female workforce in order to understand and manage their feelings. Our previous study investigated successful women happiness and ideas about being entrepreneurial women in Turkey to discover the factors of the happy women entrepreneurs’ success in business life. In this research, depending from the previous study, we measure Turkish women entrepreneurs’ happiness by using the Turkish happiness dictionary, which was developed a set of normative emotional ratings for the Turkish language and culture. We re-collect 26 Turkish successful women entrepreneurs’ online feedback by using the extracted categories of women entrepreneurs from a different 3rd party organization. Natural language processing methods and text mining are used. We automatically measure the average happiness of each feedback of a woman and the average happiness of Turkish successful female entrepreneurs. In addition, we cluster scores according to categories which present the common factors contributing to the success of happy female entrepreneurs. Keywords  Women entrepreneurship · Happiness · Online feedback analysis Natural language processing · Turkish happiness index

E. K. Ozyirmidokuz (*) · K. Uyar Erciyes University, Faculty of Economics and Administrative Sciences, Kayseri, Turkey e-mail: [email protected]; [email protected] E. A. Stoica Lucian Blaga University of Sibiu, Faculty of Economic Sciences, Sibiu, Romania e-mail: [email protected] © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 R. Orăștean et al. (eds.), Organizations and Performance in a Complex World, Springer Proceedings in Business and Economics, https://doi.org/10.1007/978-3-030-50676-6_8

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1  Introduction According to Global Entrepreneurship Monitor report (GEM 2018)1, women have a total number of early stage entrepreneurial activity rates equal to men in only 6 countries (Indonesia, Thailand, Panama, Qatar, Madagascar and Angola). According to the report more than half of women and men in six countries including Turkey (Slovenia, Greece, Sweden, Switzerland, United Kingdom and Turkey) that begins at a lesser rate of entrepreneurship. There are many steps to be taken around the world to support women’s initiatives and to have equal conditions with men. Giving half of the world's population to the economy is extremely important for economic and social development. The main factors that motivate women entrepreneurs are getting rid of unemployment (Orhan and Scott 2001; Karadeniz 2011; Cetindamar 2005), meeting the needs of the family (Fidan and Yılmaz 2006; Ufuk and Özgen 2001; Keskin 2014); squeezing, moving (Hisrich and Ozturk 1999), the desire to work independently (Çakıcı 2006), high unemployment and high rates of divorce (Jalbert 2000; Moore and Mueller 2002), sexist approaches and frustration in business life (Keskin 2014; Heilman and Chen 2003). Turkey has classified as one of the efficient driven economies in the world, in a group that includes high-growth economies such as Brazil and China. There is a need for strong businesses that can compete on a global level for the development of Turkey’s economy, which may arise with entrepreneurship. Women are the key factor in the development of entrepreneurship. Since the 1990s, with the increase in the importance given to women entrepreneurship, the necessary legal arrangements have been made and policies have been established on the financing of women entrepreneurship and entrepreneurship education. State aid is the largest supporter of entrepreneurial business ideas in Turkey. At 2018, KOSGEB (Turkey Small and Medium Enterprises Development Organization) and TUBITAK (Scientific and Technological Research Council of Turkey) was supported by $ 12.2M in pre-­ production and $ 35.7M post-production and growth stage2. As a result, women’s participation in the economy is open to some extent. According to the data of Turkish Statistical Institute3, the rate of female enterprises is 18.7% in 2016. Women entrepreneurs in the venture ecosystem is 15% in Turkey. Numerous researchers investigated women entrepreneur studies to understand women entrepreneurs and their enterprises (Hisrich and Ozturk 1999; Welsh et al. 2016; Maden 2015; Boz and Ergeneli 2014; De Vita et  al. 2014; Ince 2012; Cetindamar et al. 2012; Landig 2011; Gurol and Atsan 2006; Aycan 2004; Levent et al. 2003; Hughes 2003; Esim 1997). Some of the studies on women’s entrepreneurship examined the concept by focusing on issues such as entrepreneurship rates between women and men, financial resources and sectoral elections (Carter and  GEM: https://www.gemconsortium.org/report/50213.  Turkish Startup Ecosystem Intelligence: https://startups.watch/. 3  Turkish Statistical Institute: https://datacatalogs.org/portal/tuik.gov.tr. 1 2

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Marlow 2006; Henry et  al. 2016; Jennings and Brush 2013). Gupta et  al. (2009) concluded that entrepreneurship was stereotyped as a masculine profession and therefore did not gain immunity from stereotypes and prejudices. Gender-based perceptions, especially in patriarchal Turkish society, impose social roles on women that are out of business life. In these male-dominated societies, there was evidence that women were entrepreneurship as a revolt and as a means of proving themselves to society (Ahmad 2011; Jamali 2009; Goheer 2003). They found that the socially excluded women in Jordan’s patriarchal economy and society challenged through entrepreneurial activities to overcome the stifling constraints imposed by the community and their family members. Al-Dajani, Akbar, Carter and Shaw (Al-Dajani et  al. 2019) determined that in the Jordanian patriarchal economy and society, socially excluded women’s, to defy the stifling limitations imposed by their restrictive contractors, community and family members, socially excluded women actually defy their contextual embeddedness through their entrepreneurial activities. Similarly, Stead (2017) found that women’s attempts to engage with entrepreneurial activities reject sexist norms. Marlow and McAdam (2012) examined the degree to which women are recognized and included as entrepreneurs in male-dominated sectors. Marlow and McAdam (2013) reported that gender-based socio-economic positioning provided for women’s limited performance, but this was not synonymous with poor performance. In this study, although there was no convincing data about the fundamental gender differences between the performances of male and female entrepreneurs, they emphasized that women continue to be depicted as lower-­ performing entrepreneurs in society. Ufuk and Özgen (2001) examined the interaction between female entrepreneurs and family life. They found that being an entrepreneur adversely affected women’s roles in family life while affecting their roles in social, economic and individual life positively, and did not affect their participation in family decisions. Family structure and cultural influences in Turkish society and domestic and family expectations from entrepreneurial women are very high. This, in spite of this, can prevent these women from being happy. The literature is insufficient in the field. Kahya Özyirmidokuz and Stoica (2018) measure happiness score of women entrepreneurial feedback. Twenty-six video and unstructured data are collected from a third-party organization which rewarded successful female entrepreneurs from a third-party organization. We cluster collected female successful women feedback depending the previous research (Kahya Özyirmidokuz and Stoica 2018) which comprised 69 online feedback data and 29 online videos with successful Turkish female entrepreneurs which were collected from a different 3rd party online organization to extract the factors that affect the happiness of successful female entrepreneurs. Thematic coding (Braun and Clarke 2006) qualitative research technique (Gibbs 2007; Guest et al. 2012) was used to extract the common factors contributing to the success of happy female entrepreneurs. We extracted categories which are; “Thinking doing the job you really want to do”, “Thinking that doing the job is very useful to others or/and others give very positive feedback about the job”, “Thinking successfully (has no negative thoughts about job and thinking she become a successful entrepreneur)”, “Thinking her dream’s come true”, “Having different new dreams about the future” and “Working

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for happiness”. In this study, we aim to measure the average happiness score of successful female entrepreneurs’ feedback by using Turkish Happiness Dictionary which was generated a series of normative emotional ratings for Turkish to standardize materials for researchers in the field of emotions. We also measure the common categories’ of successful happy female entrepreneurs’ happiness scores.

2  Methodology Affective Norms for English Words (ANEW) was developed to provide a set of normative emotional ratings for a large number of words in the English language, in order to provide standardized materials that are available to researchers in the study of emotion and attention (Bradley and Lang 1999). Kahya Ozyirmidokuz and Stoica (2016) translated ANEW into Turkish. The previous study Kahya Ozyirmidokuz and Stoica (2016) used the translation of the ANEW (Bradley and Lang, 1999) dictionary while calculating the average valence scores. They comprised 69 online feedback data with successful Turkish women entrepreneurs. Sixty-nine successful women entrepreneurs wrote their feelings and ideas about being entrepreneurial women in Turkey. They also evaluated 29 online videos of these women entrepreneurs. According to the previous study results, happy female entrepreneurs’ average valence score of 69 documents was 5.7631. In this study we re-collect 26 successful award-winning female entrepreneurs’ feedback from a different 3rd party organization. We cluster the feedback manually into the categories which presents the factors that affect the happiness of successful female entrepreneurs. The frequencies of the feedback are presented in Fig. 1. Ten of the women believed in working for happiness. Twelve of them have different new dreams about future. Female entrepreneurs indicate that their jobs are very useful fort he society except two of women. Only 8 of them think dreams come true. After collecting 26 feedback, we convert data to documents. We mine each feedback. Natural language processing algorithms are used to find the words in the documents. TF-IDF (Term Frequency-Inverse Document Frequency) is used in the processing documents. In the processing documents tokenization is applied to break up the streams of documents into tokens, which are meaningful elements. Then transform cases, filtering and the Turkish Snowball stemming algorithms are applied. Consequently, the word vector (Stoica and Kahya Ozyirmidokuz 2015) is extracted for each document. Turkish Happiness Index which was developed to provide a set of normative emotional ratings for a large number of words in the Turkish language in the study of online happiness informatics (Kahya Özyirmidokuz et al. 2017) is used in this research to measure the average happiness. If a word which is in the word list is in the Turkish Happiness Index, then we use that word and its frequency to calculate the average valence value. To estimate the overall valence score for a text, which we denote by vtext, we determine the frequency fi that the ith word from the ANEW study word list has in the text; we then compute a weighted average of the valence of the

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Fig. 1  Feedback frequency per categories

ANEW study words as in Eq. (1). The vi is the ANEW study’s recorded average valence for word i (Dodds and Danforth 2010). The distribution of psychological valence will show us the customer’s happy words. The average valence of a text is given in Eq. (1) (Bradley and Lang 1999).

 text 

 f f k k

k k

k

(1)

3  Results and Discussions In this research, we re-measure the average happiness scores of 69 successful female entrepreneurs’ feedback (Kahya Özyirmidokuz and Stoica 2018) by using the Turkish Happiness Index which (Kahya Özyirmidokuz et al. 2017) instead of using the translation of the ANEW index to make a comparison. According to the previous study results, happy female entrepreneurs’ average valence score of 69 documents was 5.7631. When we use the Turkish happiness index to calculate the 69 documents’ average happiness, the finding is 5.6242. The new measurement presents a lower score and the difference is not very high; the difference is 0.1389. After mining 26 female feedback, 2756 regular attributes (words) were extracted. Table 1 presents the most commonly used words and their frequencies in the final

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Table 1  Document occurrences of the words in the final word list Translation in English Successful Support School Project Bank Woman Association Difference

Word in Turkish Başarı Destek Okul Proje Banka Kadın Dernek Fark

Total frequency 126 117 110 82 80 28 56 30

Document frequency 26 26 26 26 26 26 26 18

Table 2  Document occurrences of the words in the word list by categories Thinking that doing the job is very useful to others or/ Thinking and others doing the give very positive job you feedback really want to do about the job Words Story 96 159 Entrepreneur 62 40 Successful 60 98 Project 44 69 Bank 50 62 Woman 36 60 Association 26 45 Difference 21 39 Support 62 68

Thinking successfully (has no negative thoughts about job and thinking she become a successful entrepreneur) 190 48 118 83 98 72 54 43 85

Having different Thinking new dreams her about the dream’s come true future 62 62 53 16 38 58 27 47 34 50 24 36 17 29 5 19 29 45

Working for happiness 78 20 48 33 32 30 22 14 35

word list. If we examine the word statics in detail, for each words the max value, average and deviation values are found. This word vector value presents the importance of the word in a document. The maximum value in the word vector is the maximum value of that word per documents. For the “story” word’s maximum value in the word vector is 0.062. Table  2 also presents the most common used words in the feedback which belongs each categories and word frequencies per categories. Similarity analysis which is presented in Fig. 1 is applied with Mix Eucliediean Distance. According to the analysis the documents with id numbers; id 3, id 20 and id 25 are different than the other feedback. We decided not to clean these feedback from the data matrix (Fig. 2). We measure the average happiness score of the feedback of entrepreneurs. In this study, the average score of successful entrepreneurs’ feedback is 5.6021. We also measure the happiness scores per categories. Table 3 presents the happiness scores of the categories. The “Thinking doing the job you really want to do” category has

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Fig. 2  KKLayout of the documents

Table 3  Average happiness scores per categories Thinking that doing the job is very useful to others or/ Thinking doing the and others give very positive job you really want feedback about the job to do Average 5.8278 5.5373 score

Thinking successfully (has no negative thoughts about job and thinking she become a successful entrepreneur) 5.6274

Having different Thinking new dreams her about the dream’s come true future 5.5715 5.5702

Working for happiness 5.4783

the most highest happiness score. Interestingly, “working for happiness” has the lowest score. However, the results are very similar to each other.

4  Conclusions There is a need for strong businesses that can compete on a global level for the development of Turkey’s economy, which may arise with entrepreneurship. Women are the key factor in the development of entrepreneurship. To encourage Turkish women into entrepreneurship, there are 3rd party online organizations which share and publicize online success stories of Turkish female entrepreneurs. We measure happiness of these Turkish women entrepreneurs’ stories by using the Turkish happiness dictionary, which was developed a set of normative emotional ratings for the Turkish language and culture. We re-collect 26 Turkish successful women entrepre-

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neurs’ online feedback by using the extracted categories of women entrepreneurs from a different 3rd party organization. We applied natural language processing algorithms and automatically measure the average happiness of the each feedback of a woman and the average happiness of Turkish successful female entrepreneurs. In addition, we cluster feedback according to categories which presents the common factors contributing to the success of happy female entrepreneurs. The average scores of the categories are extracted. Additionally, we compare the result with the previous research. Acknowledgement  This research is supported by TUBITAK 1003 Project, Priority Areas R&D Funding Program, “1003-BIT-DATA-2016-1 Innovative Information Exploration Methods” Call, Project id: 116E676, Project title: “The happy project: A socio-technical mining methodology (Mutlu proje: Sosyal mutluluk ölçen bir sosyo-teknik madenleme sistemi)”. We would like to thank to Dr. Raian Ali4, not only for the help and support which allowed us to undertake this research, but also for sharing us his knowledge and experiences. We are glad to have the opportunity to work with him in this research.

References Ahmad, S.  Z. (2011). Evidence of the characteristics of women entrepreneurs in the Kingdom of Saudi Arabia: An empirical investigation. International Journal of Gender and Entrepreneurship, 3(2), 123–143. https://doi.org/10.1108/17566261111140206. Al-Dajani, H., Akbar, H., Carter, S., & Shaw, E. (2019). Defying contextual embeddedness: Evidence from displaced women entrepreneurs in Jordan. Entrepreneurship and Regional Development, 31(3-4), 198–212. https://doi.org/10.1080/08985626.2018.1551788. Aycan, Z. (2004). Key success factors for women in management in Turkey. Applied Psychology: An International Review, 53, 453–477. Boz, A., & Ergeneli, A. (2014). Women entrepreneurs’ personality characteristics and parents’ parenting style profile in Turkey. Procedia - Social and Behavioral Sciences, 109, 92–97. Bradley, M. M., & Lang, P. J. (1999). Affective norms for English words (ANEW): Instruction manual and affective ratings, Technical Report C-1, The Center for Research in Psychophysiology, University of Florida. Retrieved from http://www.uvm.edu/~pdodds/teaching/courses/200908UVM-300/docs/others/everything/bradley1999a.pdf Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77–101. Çakıcı, A. (2006). Mersin’deki Kadın Girişimcilerin İş Yaşamını Etkileyen Faktörler. Dokuz Eylül Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 8(4), 54–78. Carter, S., & Marlow, S. (2006). Female entrepreneurship: Empirical evidence and theoretical perspectives. In N. Carter, C. Henry, B. O.’. Cinniede, & K. Johnston (Eds.), Female entrepreneurship: Implications for education, training and policy (pp. 11–36). London: Routledge. Cetindamar, D. (2005). Policy issues for Turkish entrepreneurs. International Journal of Entrepreneurship and Innovation Management, 5, 187–205. Cetindamar, D., Gupta, V. K., Karadeniz, E. E., & Egrican, N. (2012). What the numbers tell: The impact of human, family and financial capital on women and men's entry into entrepreneurship in Turkey. Entrepreneurship and Regional Development, 24(1-2), 29–51.

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Modelling of Population Consumption in Conditions of Instability Ganna Kharlamova, Andriy Stavytskyy, and Oleksandr Chernyak

Abstract  The analysis of consumption plays an important role in both macroeconomic theory and empirical research. The matter of macroeconomic instability is one of the main points in modern macroeconomics. The tasks of the paper are: to reveal the essence of the population consumption as an economic category; to assess consumer attitudes in different countries, to determine the number of factors that affect the level of consumption and its structural elements under instability; and to construct the models of population consumption patterns. The analysis of the changes in consumer attitudes over the world during the period of instability was conducted. We observed the dynamics and structure of household consumption spending in the United States, Canada, Japan, the European Union, the Russian Federation and Ukraine. It has been resolved that over the past few years the global trend has improved, which is characterized by an increase in the consumer confidence index for most countries. We made a focus on the post-crisis period only for Ukraine, not considering the war period due to missed data. Nevertheless, we found out that the Consumer Confidence Index in Ukraine has dropped sharply over the past two years. Ukrainians still negatively assess the economic trend due to the difficult macroeconomic situation in the country. We built the models of the dependence of the consumption growth rate on the permanent and temporary incomes growth rate, the rate of inflation and the percentage deviation from the long-term equilibrium in the period of instability based on the samples for the United States, Canada, Japan, the Russian Federation and European countries. Keywords  Model · Instability · Consumption · EU · Ukraine · Consumer confidence index

G. Kharlamova (*) · A. Stavytskyy · O. Chernyak Taras Shevchenko National University of Kyiv, Kyiv, Ukraine e-mail: [email protected] © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 R. Orăștean et al. (eds.), Organizations and Performance in a Complex World, Springer Proceedings in Business and Economics, https://doi.org/10.1007/978-3-030-50676-6_9

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1  Introduction Household consumption expenditures are an important tool for financial planning, representing about two-thirds of GDP. It is also considered to be the main indicator of the economic well-being of the country. Consumption of the population fulfils economic and social functions in society. Economic functions are in the demonstrating needs, regulation of the volume and structure of production, labour forces; being a criterion of social product performance. Social functions are in the material welfare of the population, the formation of a fully developed personality. The experience of developed countries shows that the market economy is rapidly developing when it is based on mass consumption, the transformation of personal final consumption into a decisive element of GDP. The most general approach to the population consumption for the world-wide practice of the statistical analysis is: total household expenses are divided into consumer and non-consumer aggregate expenses. In turn, consumer aggregate costs are divided into food products and soft drinks; alcoholic beverages and tobacco products; non-food products and services. From the standpoint of living standard, the priority is given to analyzing the consumption of primary needs of the population, which includes food, clothing, footwear, and housing. The food expenses of the family budget are a social indicator of the household financial position. It is explained that the size of its formation depends on the structure of the rest of the family budget, including those articles that characterize a higher level of living standards (Erlandsen and Nymoen 2008). The theory says that the sum of the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) should be equal to one. At the same time, under conditions of stable economic growth, MPC tends to decrease, while MPS— to increase. In the context of inflation, there is another process, namely: MPC tends to increase, and MPS—to decrease (Friedman 1957). If MPC = 1, then the entire increase in available income will be consumed, and no savings will be made. This situation is typical for Ukraine. In an unstable economic situation under the lack of protection of deposits from inflation, the population increases the consumption, especially of durable goods. That is the typical situation for the pre-crisis condition. In 2009, the situation changed dramatically: MPC  =  −0.03 (incomes increased while consumption decreased), MPS  =  1.03. The negative value of the marginal propensity to consume and the fact of the entire consumption of the income increase can be explained by psychological factors in a crisis: households expected the price rising and incomes decreasing → led to an increase in current expenditures and a decrease in savings (2006–2008 years) → than to increase in savings and reduce in consumption (2009)  →  consumers are forced to reduce current consumption to diminish the debt that arose as a result of “life at the expense of loans.” In 2012, there was an improvement: MPC = MPS = 0.5. However, in 2013, there was a significant increase in MPC (to 0.76). That indicated a significant inflationary process and the impact of instability on the level of income and expenditure of the population. In general, there is a low level of propensity to save, which has a negative

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impact on the investment potential of savings and the expediency of consumer spending in Ukraine. This can be explained by: • the low level of the financial market infrastructure development, of the financial intermediation as a whole; • the low level of public confidence in the financial and credit area, state and government; • the long-term socio-economic and political instability; • the low financial literacy; • the insufficient state funding for saving and investment behavior of the population. The main indicator of the state economic and social policies effectiveness under instability is a high standard of living (Sen 1984). Up to the date, Ukraine is far behind the European countries in most indicators of economic development.

2  Literature Review The consumption theory is studied by a variety of economic schools, in particular the classical economic theory (Malthus and Pullen 1989; Ricardo 2005), Keynesianism (J. Keynes), Neo-Keynesianism and Post-Keynesianism, represented by two Schools: American (Harrod 1937) and European (Ardant 1975; Perry et al. 1971), researchers in the theory of consumer demand (Friedman 1957; Modigliani and Brumberg 1954) and representatives of the modern approach (Baldacci et al. 2010; Baldacci et al. 2008; Bonar 1911; Ferber 1973; Hall 1988). Despite the fact that there are many controversial issues in the development of theoretical aspects of consumption, scientists collectively agree that the total consumption is the most important characteristic to assess the living standards and an indicator of the country’s economic well-being under instability. Research on the problem of global instability is extremely relevant mostly in the aspects of its causes, consequences and ways of overcoming (Barrell et al. 2006; Combes and Ebeke 2011; Gale 1963). After all, the understanding in the causes and the nature of macroeconomic instability in a market economy is a prerequisite for developing an economic policy aimed to eliminate the macroeconomic imbalances, to achieve a stabilization of prices and production. In addition, the implementation of economic policies aimed to minimize the cyclical development of a market economy and the elimination of the effects of economic downturns; the achievement of the minimum level of cyclical unemployment, the performance of the correspondence between the structure of the working population and the structure of existing workplaces, the effective allocation of labor resources; the price stability ensuring, especially in the short-term development period of the economy, are noted first of all among the main functions of the modern state.

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3  A  ssessment of Changes in Consumer Confidence Under the Instability Period Economists pay great attention to the consumer market trends, especially in the time of economic changes, because it reflects the welfare of the population. Currently, various research groups in different countries of the world, including GfK Ukraine (https://www.gfk.com/uk-ua/), Nielsen (https://www.nielsen.com/ua/uk.html) and the International Center for Policy Studies (http://www.icps.com.ua/en/), are engaged in consumer confidence issues. Consumer mood is a monthly survey of household expectations and their assessment of the current state of the economy and its welfare. Consumer Confidence Index (CCI) is a leading indicator of trends in the consumer market, which is used globally. This indicator is a predictive indicator of a potential change in consumer demand in subsequent periods. The Consumer Confidence Index is based on a sample survey of households in the country. Under the survey, 1000 people aged 15–59 are interviewed. The sample is representative by gender and age, taking into account the urban and rural population and the size of the city. The statistical deviation does not exceed 3.2%. The following consumer confidence indices are distinguished: • • • • • • • • • • •

Index of current personal financial position, Index of expected changes in personal financial position, Index of expected economic development in the country over the next year, Index of expected economic development in the country over the next five years, Index of expediency to make gross purchases, Consumer confidence index, Index of current status, Index of economic expectations, Index of expected dynamics of unemployment, Index of inflation expectations, Devaluation expectations index.

The index values can vary from 0 to 200. The value equals 200 if all citizens positively evaluate the economic situation. The index is 100 when the shares of positive and negative ratings are equal. The value of the index is less than 100 means that negative values predominate in society. Figure 1 shows the Nielsen Consumer Confidence Index in the world for 2016. Ukraine is still ranked second among the most pessimistic countries in the world after South Korea. The Global Consumer Confidence Index remains basically at the same level, adding 1 point in comparison to the last quarter of 2015. While the confidence levels increased by 5 or more points in 11 countries out of 61. The trust levels dropped by 5 or more points compared to last year in 21 countries. Among all countries in the survey, India remains one with the highest level of confidence and optimism—134 points; and this indicator has grown by 3 points in comparison with the last quarter. The US Consumer Confidence Index dropped immediately in 19 points (to 100) in the last quarter of 2015, while the optimism in the first quarter of

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Fig. 1  Consumer confidence index. Source: https://www.nielsen.com/ua/uk/insights/news/2016/ nielsen-cci-Q1-2016.html

2016 increased by 10 points (to 110). In the first quarter of 2016, Russia entered the list of countries with the lowest index of consumer confidence index for the first time in 11 years (drop by 11 points to 63 points). A similar situation was observed in the first half of 2009, with the onset of the crisis, when the index also fell significantly—from 104 to 75 points. Belorussia and Kazakhstan firstly joined the study of the consumer confidence index in the first quarter of 2016. The first results showed that the mood of the Belarusians is close to the mood of Ukrainians—50 points, while respondents in Kazakhstan are much more confident in the prospects—73 points, respectively.

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4  D  etermination of the Key Trends in the Dynamics of Household Consumption in the World There is the uneven distribution of countries in terms of consumption: the highest consumption is observed in the USA. In turn, the average household consumption expenditures in some African countries are much lower than in most countries of Eurasia, North and South America. This is explained by the different level of economic development, the geographical location of the country, the number of population, the development of industries, which produce goods and provide services of a consumer nature, the level of monetary incomes, etc. Figure 2 shows the global dynamics of the ratio of final consumer spending to GDP from 1970 to 2016. It clearly shows a decline in the ration of the consumption to GDP in the periods of instability: 1990, 2007–2008. Note, that the highest level is typical for the USA in the period, followed by Japan, the EU and Canada at almost the same level. In most countries, household consumption costs accounted for more than half of GDP.  With the onset of the financial crisis, consumption has declined noticeably in many countries. There are several reasons for the decline in consumption during the crisis. The first explanation – the level of constant income has declined, which led to a reduction in consumption, as shown in the hypothesis of constant income and loss (Friedman 1957). The second explanation suggests that consumption has fallen through credit constraints or liquidity constraints (Aron et al. 2012). If actual incomes fall and households do not have accumulated savings or access to loans, their consumption also drops despite the level of permanent income remains constant. The third ­explanation

Fig. 2  The ratio of household consumption to GDP in the period from 1970 to 2016. Source: The World Bank

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is the so-called preventive savings (Mody et al. 2012). In the context of the financial crisis, savings can be used as a debt (Bornhorst and Arranz 2013). After households have restored their balance sheets, the future consumption would be again financed by a new loan. Moreover, even when the credit obligations currently are not mandatory, not-risky households increase their savings for the future to repay such possible loans (Jappelli 1990). Figure 3 shows the total consumer spending dynamics in the European Union from 1970 to 2016. The dynamics of this EU indicator is not so stable in comparison to the US, Canada and Japan. The deceleration and reduction of consumption rates were typical for 1980–1985 and 1995–2000. Since 2001, there has been a steep rise in the consumption of population in the European Union, which lasted until 2008, when the indicator fell significantly due to the crisis. In 2013, the level of final consumer spending had not yet reached a pre-crisis, due to the presence of economic problems in some European countries. The costs of services and goods are distributed almost equally in the EU consumption structure (60% and 40%, respectively). The largest share of spending is for housing, water and electricity costs—17 to 27% (Malta—12%), with education having the smallest share—1%. The costs of essential goods are rather low. The smallest part of the household budget on food is spent by residents of Luxembourg—only 8.8%. Next, there are Great Britain and Ireland—9.3% and 10.1%, respectively. There are Austria and Germany also in this TOP-5 (10.2% and 11.5%, respectively. The residents of Romania, Lithuania and Macedonia spend more than one-fourth of its consumer spending on food. This indicates a large stratification in Europe. The share of food costs is lower than the average only in 9 EU countries. The quota of alcohol and tobacco costs is as well remarkable to consider. The least dependence on alcohol prices is in the winemaking countries—Italy (2.8% in expenditure structure), France (3%) and Spain (3.1%). In turn, alcohol striving mostly influences the budget of households in Bulgaria, the Czech Republic, Poland and Estonia, where

Fig. 3  Household consumer spending in the EU from 1970 to 2016. Source: World Bank

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this group of costs ranges from 7 to 10%, which is one of the highest rates in the world. Other categories of expenses in the European Union countries do not differ significantly: household items: 4–7.5%, health care: 2.5–5.5%, transport: 10–13%, communications: on average 3%, rest and culture: 7–11%, restaurants and hotels: the average rate was 9%. In general, the structure of consumption in the countries of North America, Asia and Europe is typical for highly developed countries. The former USSR countries have disproportions in the structure of consumption, which reflect the negative realities of economic development.

5  Modelling of Population Consumption Under Instability Сonsumption models based on regression analysis are widely used in practice. The regression equation serves as a function of consumption, and the factors that determine it are considered as independent variables. The statistical analysis carried out in the previous section indicates that consumption and income levels for the most studied countries, including Ukraine, are characterized by the seasonality that must be taken into account while constructing the model. To solve this problem, an approach that involves the construction of consumption models with seasonal variations is adopted. Seasonal differences in models measure the difference between the current value of the indicator and the value observed a year ago. Since quarterly indicator data in Ukraine and in the world are used for modelling, seasonal differences are recorded as follows:

 4  x t  xt  xt  4 .



Moreover, such an approach makes it possible to get rid of additive seasonality (constant seasonal wave) and a linear trend. Therefore, the use of a model with seasonal differences does not require the additional input of dummy variables of seasonality and trend. We use the model based on the DHSY (Davidson et al. 1978) approach:  4 ln  CON t  a0  a1  4 ln  INC t  a2  4 ln  INC t  a3 (ln  CON t  4 

 ln  INC t 4 )  a4  4 INFt  a5  4 INFt   t ,



where CONt: household expenditures for consumption in the period t, INCt: household income in period t, INFt: consumer price index in period t. Let’s look at each element of the model in detail. Seasonal changes in consumption approximating the growth rates are given as follows:

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 4 ln  CON t  ln  CON t  ln  CON t  4 .





It depends on seasonal changes in income (growth rate of current income):  4 ln  INC t  ln  INC t  ln  INC t  4 .





Coefficient а1 shows the increase in the growth rate of population consumption with a 1% increase in income growth rate. The component a1  4 ln  INC t shows a change in the constant income directed to consume. The variable model that measures short-term deviations between seasonal changes in income, that is, the variable of the temporary income is given by the formula:



 



 4 ln  INC t  ln  INC t  ln  INC t  4  ln  INC t 1  ln  INC t  5 .



Taking into account the theoretical principles of the model, the coefficient а2 must have a negative sign. Since, according to the theory of constant income, consumers smooth their intermittent consumption due to savings and loans that enable households, on the one hand, to prevent consumption in periods of possible loss of income, and, on the other—to increase consumption in periods with a relatively low income. Specifically, if in a certain period, the temporary income is positive and  4 ln  INC t  0 then consumers should reduce their consumption to the level that was observed in periods when the current income consisted only of a constant income—in response to such a change. The difference ln  CON t  4  ln  INC t  4 shows the effect of the impact of short-term deviances on the long-term equilibrium relationship between consumption and income CON t   INCt . It defines the proportion of consumption of income in the long run. For example, if in the last year there was a positive deviation from the equilibrium ln  CON t  4  ln  INC t  4  0 (the ratio of consumption to income was greater than some equilibrium level ϕ), then this year households trying to adjust their consumption and would reduce it. In the current period, it CON t  . would be INCt There is also the need to include in the model variables that reflect inflation processes. It helps to determine the impact of the decrease in the purchasing power of money on real consumption. So, the variable ∆ 4 INFt is the rate of inflation in the country, ∆∆ 4 INFt —the acceleration of the inflation rate. Note, if consumers interpret the growth of nominal income as the growth of real income and do not observe or for some reason not realistically evaluate the change in price levels, then their real consumer expenditures can react to the growth of nominal income. In the case of unpredictable inflation, consumers can interpret the rise in prices for common goods as the relative one rather than as a general increase in the price level, on the one hand. On the other hand, if there is an unpredictable growth of prices, households suffer losses related to the holding of assets in the national currency. Thus, in









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response to unexpected changes in prices, households can reduce their real consumption. We constructed models based on data for Ukraine from the second quarter of 2002 to the third quarter of 2014. Thus, at first, the research was carried out on the first 11 observations of data (since the model contains five unknown parameters and lags to the fifth order), the next steps were to add to the sample one endogenous and all exogenous variables. The process was repeated until all observations were used, with 40 models for each element. We see that the model based on the sample for all periods is sufficiently precise to analyze the consumption of population in Ukraine under instability since the adjusted-R2 is 0.76 and the normalized coefficient is 0.73. Figure 4 shows the value of the a1 coefficient, which determines the marginal values of the annual changes in consumption in relation to the annual income changes (in percentage terms) and measures the share of current income that consumers convey as changes in fixed income. Remark, the a1 coefficient is stable at the level of 0.4–0.5 in the period from the second quarter of 2005 to the first quarter of 2009. Then, there was a sharp jump up in the second quarter of 2009 and this coefficient was about 0.8 since the fourth quarter of 2009. Consequently, we can assume that the annual actual income growth by 1% stimulates the increase in the consumption growth rate by 0.8%. It says that the population in Ukraine traced the changes in temporary income and forwarded about 80% of current-income changes at consuming, that they interpreted as changes in the constant income. It can be assumed that as a result of the crisis of 2008–2009, the increasing share of changes in current income is described by consumers as changes in the constant income. It means they are inclined to direct almost all changes in current income to consumption.

Fig. 4  The value of a1 the coefficient. Source: authors’ calculations

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Fig. 5  The value of the a2 coefficient. Source: authors’ calculations

Figure 5 shows the dynamics of the a2 coefficient, that reflects the adjustment of changes in consumption to short-term changes in the income growth rate, that is, changes in temporary income. After the crisis of 2008, this ratio becomes negative indicating that the temporary income growth corrects towards its decrease the current consumption growth, which is caused by the current income growth. That is consistent with Friedman’s statements (Friedman 1957). However, this coefficient is not significant in most of the investigated periods. Therefore, such a correction is not indispensable for most Ukrainian consumers. The value of the a2 coefficient can be interpreted as the proportion of households with liquid constraints. The model shows that households in Ukraine face liquidity constraints, that is, they practically cannot loan. This forces households to exhaust the resources they have accumulated in previous periods. At the result, consumers are not able to smooth their consumption over time and their consumer decisions are almost entirely based on current income. Figure 6 shows the dynamics of the a3 coefficient. This coefficient determines the speed of applying to the equilibrium which is determined by the long-term equilibrium ratio of consumption to income. The coefficient is significant and negative for the whole investigated period. So, consumers reduce the share of consumption in income in the current period, if this ratio exceeded the equilibrium level in the previous year. The model shows that due to the crisis and instability, the sensitivity of consumption to deviations from long-term trends has increased. The effect of rising consumer prices can be seen from the dynamics of a4. The analysis of Fig. 7 shows that after the 2008 crisis and in the period of instability, consumers are more likely to determine the impact of the price level on their consumption. An increase in the inflation rate also results in costs that arise from the depreciation of households’ assets and savings in the national currency. That results

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Fig. 6  The value of the a3 coefficient. Source: authors’ calculations

Fig. 7  The value of the a4 coefficient. Source: authors’ calculations

in changes in their wealth value—according to F. Modigliani’s life cycle hypothesis it is an important factor in consumption. In addition, the inflation rate growth raises nominal interest rates, which negatively correlates with changes in wealth, and, hence, in consumption. Figure 8 shows that the a5 coefficient is negative in the studied periods. It means that the consumption of households in Ukraine reacted to the accelerator of inflation: the higher value of it reduced real consumer consumption. Separately we carried out an econometric analysis of population consumption under instability in the United States of America, Canada, Japan, the Russian Federation and the European Union (aggregated indicator for all EU member

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Fig. 8  The value of the a5 coefficient. Source: authors’ calculations

Fig. 9  Coefficient dynamics for the USA. Source: authors’ calculations

states). Data period—from the first quarter of 2002 to the fourth quarter 2013 year. We built 24 economic and mathematical models for the period of instability. It was established that the constructed models are significant, since the values of adj-R2 are rather high (the United States of America—0.94, Canada—0.91, Japan—0.69, European Union countries—0.64 and Russian Federation—0.71), as well as coefficients of models are significant according to Student’s criterion for the 0.5 significance level. The coefficients of the model reflect (Figs. 9, 10, 11, 12, and 13):

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Fig. 10  Coefficient dynamics for Canada. Source: authors’ calculations

Fig. 11  Coefficient dynamics for Japan. Source: authors’ calculations

• a1 shows the growth rate of population consumption if the rate of income growth changes by 1%; • a2 represents the adjustment of changes in consumption for short-term changes in the rate of income growth, that is, changes in temporary income; • a3 defines the proportion of consumption in income in the long-run period; • а4 and а5 explain the effect of price rising to consumption.

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Fig. 12  Coefficient dynamics for EU. Source: authors’ calculations

Fig. 13  Coefficient dynamics for Russia. Source: authors’ calculations

Appeared that the conditions of instability in the United States did not significantly affect the impact of income growth on the growth of consumption. Just the small ratio of change in current income is directed at the consumption. Also, in the long-term, the population adjusts its consumption not only depending on the level of income, but also depending on additional sources of financing (loans), and, to a small extent, it determines the effect of inflation on its consumption during the

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period of instability. This is due to the constant level of inflation, strong national currency and the fact that inflation does not devalue the assets of the population and the level of their wealth. The model results show that the annual growth rate of actual income by 1% increases the growth rate of consumption by 0.7–0.8% in Canada. A similar situation is typical for Ukraine in the post-crisis period of 2008–2009. It is established that the influence of the price level on population consumption is not significant in Canada, but during the crisis, there was a negative correlation between the indicators. It resulted that with the increase in the income rate, the growth rate of population consumption decreased in Japan. It indicates that the growth rate of savings increased. This fact specifies that the Japanese population has confidence in a constant level of income since it can properly distribute income for consumption and allocate a significant part of it to savings. It also determines the sensitivity of consumption to the deviations from long-term trends, as well as the fact that during the crisis and instability, inflationary processes did not significantly affect the consumption level. As to the European Union, the following conclusions were drawn: • the population is uncertain about the level of future income and whether such income can meet current needs, so the excessive consumption occurs; • the EU population attempts to restrain its consumption with the growth of the temporary income; • the negative effect of short-term deviations from the long-term relationship between consumption and income, that is, consumers, reduce the share of consumption in income in the current period, given the long-term analysis of their income level; • as a result of the crisis and instability, the sensitivity of consumption to deviations from long-term trends has decreased; • there is a small extent of the influence of inflation on the consumption in the period of instability. Resulted that in the Russian Federation the population traced changes in temporary income and directed all income to consumption. The model shows that households face liquidity constraints. So, they can hardly borrow. This fact forces households to exhaust the resources they have accumulated in previous periods. So, consumers are not able to smooth their consumption over time and their consumer decisions are almost entirely based on current income. It was established that before the crisis there was a positive effect of short-term deviations from the long-term relationship between consumption and income, and after the crisis it was negative. Also, after the crisis, the sensitivity of consumption to long-term trends in income change decreased. It should be noted that consumers considerably determine the influence of the price level on their consumption. Thus, modelling of consumption under the instability has shown that there was a similar effect of instability and crisis on population consumption in Ukraine, the Russian Federation and the countries of the European Union. the instability did not affect the quality and level of household consumption in the United States, Canada

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and Japan. This can be explained by the development of the economy, the socio-­ economic policy of states and social guarantees.

6  Conclusions Consumption of the population is an integral part of the economy of each country. The better investigation of the economic and social processes in the state is possible by the reviewing consumption in terms of its structural units, in particular, the level of well-being and the standard of living quality of the population. The consumer confidence in the world and in Ukraine under conditions of instability is analyzed. The global trend has improved that is seen by an increase in the consumer confidence index in most countries of the world and by a decline in the percentage of the population who believes that their country is in recession. However, the situation in Ukraine is very different. The consumer confidence index dropped sharply over the past two years, some elements of it reached the 2008–2009 crisis mark. Ukrainians continue to assess the economic situation as a negative one. That could be explained by the difficult macroeconomic situation in the country. Taking into account the crisis situation in the economy of Ukraine, the purpose of state regulation of incomes and consumption is the social protection of the population from the price growth and commodity deficits in order to guarantee the subsistence minimum of citizens. Based on the comparison of social policy models in the area of living ​​ standards in other countries, it should be noted that the model of social policy in Ukraine should represent a symbiosis of liberalism and social orientation. The first one enables, in the absence of sufficient financial resources, the creation of conditions for self-realization and self-sufficiency of economic entities. The second one involves the formation of a rational system of social protection for the population. Building its own model of social policy, Ukraine must do something in common with the German and American models. As for the American model, in 2000, with the help of Americans, a targeted subsidy program was introduced to mitigate the growth of utility fees for the population. This system works well so far. In order to improve the consumer structure of the population, Ukraine must undertake a number of measures aimed at stabilizing the sphere of social protection, regulating income and reforming the pension system (Davidson et al. 1978; Duesenberry 1949; Stavytskyy 2016). The models of the consumption growth rate dependency on the growth rates of the permanent and temporary incomes, the rate of inflation and the percentage deviation from the long-term equilibrium correlation in the period of instability based on the samples for different periods were built. The dynamics of the model coefficients show that households in Ukraine are not able to form expectations rationally and their consumer decisions are based only on the possibilities of the current period. Therefore, measures of the economic policy of the state that would have influenced the growth of real incomes in Ukraine already in the current period would lead to a significant increase in demand, which due to the high value of the

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multipliers would positively stimulate the processes of development of the national economy. In conditions of social and market transformation, the state must act as a social shock absorber for transformations and, at the same time, pursue an active social policy on the basis of new, market-based requirements. It has been established that instability and crisis in Ukraine, the Russian Federation and the countries of the European Union have had a similar effect on the consumption of population in these states. Instability did not affect the quality and level of household consumption in the United States, Canada and Japan. In these countries, it is necessary to pursue policies and reforms aimed at the consumption increasing, in particular, social policy reforms, social security, reducing the level of differentiation of the population and developing long-term strategies for the development under instability.

References Ardant, G. (1975). Financial policy and economic infrastructure of modern states and nations. Formation of National States in Western Europe, 164, 218. Aron, J., Duca, J. V., Muellbauer, J., Murata, K., & Murphy, A. (2012). Credit, housing collateral, and consumption: Evidence from Japan, the UK, and the US. Review of Income and Wealth, 58(3), 397–423. Baldacci, E., Clements, B., Gupta, S., & Cui, Q. (2008). Social spending, human capital, and growth in developing countries. World Development, 36(8), 1317–1341. Baldacci, M. E., Ding, D., Coady, D., Callegari, G., Tommasino, P., Woo, J., & Kumar, M. M. S. (2010). Public expenditures on social programs and household consumption in China, (No. 10–69). Washington, DC: International Monetary Fund. Barrell, R., Davis, E. P., & Pomerantz, O. (2006). Costs of financial instability, household-sector balance sheets and consumption. Journal of Financial Stability, 2(2), 194–216. Bonar, J. (1911). The economics of John Stuart Mill. Journal of Political Economy, 19(9), 717–725. Bornhorst, F., & Arranz, M. R. (2013) The perils of private-sector deleveraging in the eurozone. VoxEU.org, 20. Combes, J. L., & Ebeke, C. (2011). Remittances and household consumption instability in developing countries. World Development, 39(7), 1076–1089. Davidson, J. E., Hendry, D. F., Srba, F., & Yeo, S. (1978). Econometric modelling of the aggregate time-series relationship between consumers’ expenditure and income in the United Kingdom. The Economic Journal, 88, 661–692. Duesenberry, J.  S. (1949). Income, saving, and the theory of consumer behavior. Cambridge: Harvard University Press. Erlandsen, S., & Nymoen, R. (2008). Consumption and population age structure. Journal of Population Economics, 21(3), 505–520. Ferber, R. (1973). Consumer economics, a survey. Journal of Economic Literature, 11(4), 1303–1342. Friedman, M. (1957). Introduction to “A theory of the consumption function”. In A theory of the consumption function (pp. 1–6). Princeton: Princeton University Press. Gale, D. (1963). A note on global instability of competitive equilibrium. Naval Research Logistics Quarterly, 10(1), 81–87. Hall, R. E. (1988). Intertemporal substitution in consumption. Journal of Political Economy, 96(2), 339–357. Harrod, R. F. (1937). Mr Keynes and traditional theory. Econometrica, 5(1), 74–86.

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Jappelli, T. (1990). Who is credit constrained in the US economy? The Quarterly Journal of Economics, 105(1), 219–234. Malthus, T. R., & Pullen, J. (1989). Principles of political economy (Vol. 2). Cambridge: Cambridge University Press. Modigliani, F., & Brumberg, R. (1954). Utility analysis and the consumption function: An interpretation of cross-section data. In K. K. Kurihara (Ed.), Post-Keynesian economics (pp. 388– 436). New Brunswick: Rutgers University Press. Mody, A., Ohnsorge, F., & Sandri, D. (2012). Precautionary savings in the great recession. IMF Economic Review, 60(1), 114–138. Perry, G. L., Denison, E. F., & Solow, R. M. (1971). Labour force structure, potential output, and productivity. Brookings Papers on Economic Activity, 1971(3), 533–578. Ricardo, D. (2005). The principles of political economy and taxation. In Readings in the economics of the division of labor: The classical tradition (pp.  127–130). Hackensack, NJ: World Scientific. Sen, A. (1984). The living standard. Oxford Economic Papers, 36, 74–90. Stavytskyy, A.  V. (2016). Application of the basic income concept in Ukrainian economy. Bulletin of Taras Shevchenko National University of Kyiv, 1(178), 29–34. https://doi. org/10.17721/1728-2667.2016/178-1/5.

Organizational Commitment and Entrepreneurial Intentions Among Employed Persons: Serbian Case Predrag Mali, Edit Terek, and Milan Nikolić

Abstract  The paper presents the results of the study of the impact of dimensions of organizational commitment on individual entrepreneurial orientation dimensions, achievement dimension and the theory of planned behaviour dimensions. Respondents were wage-employed persons in organizations in Serbia. The sample included 540 respondents, out of 72 organizations. It has been shown that all three dimensions of organizational commitment have a statistically significant and negative impact on entrepreneurial intentions, with the strongest negative impact being the dimension of Organizational Loyalty. Likewise, regression analysis has shown that the dimension Organizational Loyalty assumes a predictive effect and that the effect of this dimension is statistically significant and negative. Thus, there is a strong negative link between the dimension Organizational loyalty with the dimension Subjective norm, attitude towards entrepreneurship, proactivity and need for achievement dimension. Organizational Identification dimension has a statistically significant and positive predictive effect on the dimensions Innovation and Subjective norm and the dimension Organizational involvement has a statistically significant and positive predictive effect on the dimensions Proactivity and Need for achievement. Keywords  Organizational commitment · Entrepreneurial intentions · Employed persons

P. Mali University of Belgrade, Faculty of Economics, Belgrade, Serbia E. Terek (*) · M. Nikolić University of Novi Sad, Technical Faculty “Mihajlo Pupin”, Zrenjanin, Serbia © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 R. Orăștean et al. (eds.), Organizations and Performance in a Complex World, Springer Proceedings in Business and Economics, https://doi.org/10.1007/978-3-030-50676-6_10

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1  Introduction Research of entrepreneurial intentions, in most cases, is aimed at unemployed persons or employed persons, but in terms of their intentions and readiness for entrepreneurship within the organization in which they work (internal entrepreneurship). Thus, there are many references that deal with entrepreneurial intentions among students (Kwong and Thompson 2016; Mueller and Thomas 2001; Shinnar et al. 2012), as well as the importance of internal entrepreneurship (Antončič and Hisrich 2001; Hornsby et al. 2013). In such circumstances, the impression is that not enough attention is paid to the entrepreneurial intentions of the persons working in wage-employment careers, but also to the intentions that are externally oriented: the intentions of these employees to leave the existing job and establish their own company (transition from employee to entrepreneur). However, there are some references, such as (Hormiga et al. 2013; Marshall and Gigliotti 2018), which point to this problem, but also to the importance of dealing with this problem. Some references point to the fact that employees actually have more experience, knowledge, potential, and opportunities to start an own business (Hormiga et  al. 2013; Khotin 2016). However, at first glance, it seems (socially) unnecessary to study entrepreneurial intentions of people who have a job. But it is clear that every opening of a new enterprise means new jobs, and at the same time, by leaving some employees in order to open their own company, the jobs where they were working become free for other people (who may not have entrepreneurial ambitions and abilities). Observed from the perspective of an employed individual, the question arises: what motivates an employee to leave the existing job and go into uncertain entrepreneurial waters? If for a moment, personal qualities and current circumstances are excluded, then it is clear that, in this case, the influence on entrepreneurial intentions certainly have some aspects of work, business and interpersonal relations in the current organization. In other words, it can be assumed that on the entrepreneurial intentions of the employed person, certain aspects of organizational behavior has impact. In this paper, the influence of organizational commitment on the existence of entrepreneurial intentions among employed persons is examined. There is a considerable amount of research that examines the impact of organizational commitment on the decision to leave the organization, but without the focus on whether entrepreneurial intentions are behind it. Examples of such research can be found in the following references (Bishop et al. 2000; Ghosh et al. 2013; Mathieu and Zajac 1990; Simons and Roberson 2003). Therefore, the problem of the research in this paper is the influence of organizational commitment on the existence of entrepreneurial intentions among employed persons, and the subject of the research are organizations in Serbia. The aim of the research is to determine and better describe the relationship between the dimensions of organizational commitment of employees and their (eventual) intentions to leave the existing organization and starting an entrepreneurial business.

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The discovery and understanding of the strength and direction of these relations have a theoretical and practical significance, which is reflected in the identification of entrepreneurial intentions among the employed persons, as well as the creation of realistic bases for defining actions towards the exploitation of entrepreneurial potentials of employed persons.

2  Theory and Hypothesis The problem of organizational commitment on the intention to leave the organization is considerably analyzed in the existing scientific literature. For example, Simons and Roberson (2003) have confirmed that there is a negative correlation between organizational commitment and absenteeism, fluctuation, and intentions to leave the organization. Similarly, according to (Mathieu and Zajac 1990), organizational commitment is positively correlated with various desirable work performance, such as job satisfaction, motivation and work performance, and in a negative correlation with absenteeism and intentions to leave the organization. Affective and normative commitment is a strong predictor of the intentions of the employees in relation to staying or leaving the organization (Ghosh et  al. 2013). The negative correlation between organizational commitment and the intention to leave the organization was confirmed in the reference (Bishop et al. 2000). A survey conducted in China and Hong Kong (Wong et al. 2001) has shown that organizational commitment has a strong impact on the job satisfaction and intentions to leave the organization, especially in Chinese organizations. Here, Chinese traditional values related to loyalty are highlighted, which also appear in modern business conditions. However, the authors note that, in spite of such a situation, it would be useful for Chinese organizations to foster the organizational commitment of employees. The research (Vandenberghe and Tremblay 2008) deals with the relationships between satisfaction with salary, organizational commitment, and intentions to leave the organization. This research was carried out in pharmaceutical companies (232 respondents) and in mixed companies (221 respondents). Satisfaction with salary is associated with affective commitment, which further influences the intentions of leaving the organization. Also, satisfaction with salary is significantly related to normative commitment, but it has no impact on the intention to leave the organization. In addition, the survey explores what needs to be done to ensure that overall satisfaction and dedication are at a higher level. One study deals with the effects of job satisfaction, organizational commitment, and individual factors on the intentions of employees to leave the organization in the airline industry (Chen 2006). Stewards of a Taiwanese airline were the respondents. The results of logistic regression analysis showed that two aspects of organizational commitment (normative commitment and continual commitment), as well as job satisfaction, have a significant negative impact on the intentions to leave jobs in the

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airline industry. In addition, it has been established that the salary level and material status are significant predictors of the intention to leave a job. Blau and Boal (1987) studied a group of workers in the insurance sector. It has been shown that employees who have a higher level of organizational commitment will have a lower level of absenteeism, as well as a lower level of intention to leave the organization. In addition, Eisenberger et al. (1990) have found that employees who believe that managers value and respect them not only have a higher level of organizational commitment but are more aware of their responsibilities are better involved in the organization and they exhibit a higher degree of innovation. Under such conditions, the intentions for leaving the organization are reduced. Singh et  al. (2013) dealt with the problem of leaving organizations of female workers in the fields of chemical, mechanical, and electrical engineering. By analyzing a large national sample (a survey conducted in the United States) of 2042 female engineers, the authors came to the conclusion that self-efficacy and expected, general outcomes of the work affect job satisfaction and organizational commitment of female engineers, which then has an effect on their intentions to leave the organization. Organizational commitment has been studied in a large number of references around the world, however, there are not many studies dealing with the organizational commitment of employees in the IT sector (Naqvi and Bashir 2015). According to these authors, IT organizations in Pakistan must be involved in incentive programs to increase the level of organizational commitment, as measures of retention of IT staff employed by these organizations. In addition, Naqvi and Bashir (2015) emphasize that many developed countries offer attractive jobs to IT professionals from Pakistan, and in this way, there is a “brain drain” from this country. Based on these results, the authors note that immediate measures at government level are necessary for retaining this type of intellectual capital, not only in IT organizations but also in Pakistan. Another research conducted among IT professionals in the USA (Harden et al. 2018) has shown that excessive work, as well as the lack of rewards, directly affect employees’ commitment, which leads to increased intentions to leave the organization. Retaining quality workers is essential for any modern organization (Neininger et  al. 2010). In the same reference, the results of the research conducted in the period of three years in Germany are presented in order to examine the link between organizational commitment and commitment of the employees to the group and the intention to leave the organization. 360 employees were surveyed, working in 52 teams, with the number of employees in the teams varying from 4 to 27. It turned out that the organizational commitment of employees has strong effects on the job satisfaction and on the intentions to leave the organization. Also, team dedication affects team performance and altruism. The observed relationships are increasing over time. Contrary to the listed researches, where it has undoubtedly been found that there are significant and negative correlations between organizational commitment and intentions to quit a job, in the study (Tnay et al. 2013) carried out in the manufacturing industry, the results show that organizational commitment has no significant

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impact on the intentions to leave the organization. This result is certainly unique and theoretically interesting. In this paper, two hypotheses were set up. Hypotheses are based on the possibility of having an influence of some individual dimensions of organizational commitment on individual entrepreneurial orientation dimensions, achievement dimension and the theory of planned behavior dimensions. The hypotheses are: H1: There is a statistically significant influence of individual dimensions of organizational commitment on individual entrepreneurial orientation dimensions, achievement dimension and the theory of planned behavior dimensions. H2: There is a statistically significant predictive effect of individual dimensions of organizational commitment on individual entrepreneurial orientation dimensions, achievement dimension and theory of planned behavior dimensions.

3  Method 3.1  Survey Instruments (Measures) For measuring individual entrepreneurial orientation, the Individual Entrepreneurial Orientation (IEO) instrument was used (Bolton and Lane 2012). The questionnaire consists of 10 items (three dimensions: (1) Risk-taking, (2) Innovativeness and (3) Proactiveness). The items are valued through seven-point Likert scale. Need for achievement was measured through the Achievement dimension from the Attitude Toward Enterprise (ATE) Test (Athayde 2009). The dimension consists of four items. Respondents give values through seven-point Likert scale. The Entrepreneurial Intention Questionnaire (EIQ) (Liñán and Chen 2009) was used to measure the dimensions. The theory of planned behaviour. The questionnaire consists of 20 items (four dimensions: (1) Personal attitude, (2) Subjective norm, (3) Perceived behavioural control and (4) Entrepreneurial intention). Respondents give values through seven-point Likert scale. Organizational commitment was measured using the instrument developed by Cook and Wall (1980). The questionnaire consists of nine items (three dimensions: Organizational Identification, Organizational Inclusion and Organizational Loyalty). Respondents give values through a five-point Likert scale.

3.2  Participants and Data Collection The research was carried out in companies in Serbia. By size, medium and large companies were included, and according to the type of activity, production, service and public companies were included. Respondents were employed in these companies, regardless of gender, age, level of education (minimum secondary school). In

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most companies, a larger number of questionnaires were distributed. A total of 680 questionnaires were distributed, and 582 questionnaires were completed. 42 questionnaires were rejected due to incomplete responses, so statistical analyzes were made with 540 questionnaires (percentage of successfully completed questionnaires was 79.4%). So, the final sample consists of 540 respondents from 72 companies.

4  Results 4.1  Descriptive Statistics Table 1 provides descriptive statistics for the observed dimensions. Mean values, standard deviations, and Cronbach’s alpha (α) for each dimension were calculated. The values of Cronbach’s alpha range from 0.711 to 0.954.

4.2  Correlation Analysis Correlation analysis (Table 2) shows the effects of the dimensions of organizational commitment on individual entrepreneurial orientation dimensions (risk-taking, innovativeness, proactiveness), achievement dimension and the theory of planned behaviour dimensions (personal attitude, subjective norm, perceived behavioural control, entrepreneurial intention). Pearson’s correlation was used (*p