9 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 16 (2022) the coaching and management of a successful organisation gheorghina liliana bîrlădeanu1, 1 faculty of economic sciences, agora university of oradea, oradea, romania e-mail gheorghina_birladeanu@yahoo.com abstract exercising coaching within organisations creates efficient teams, giving them sense and direction regarding actions, with an increased and consequent focus on the employees` motivational approach and also on the ability to delegate effectively. this way, a healthy environment is cultivated, with autonomous, self-taught working teams, which activate conscientiously aspects that lead to building a successful organisation. ”no one can whistle a symphony, it takes a whole orchestra to play it.” (h.e. luccock) key words: coaching, efficient teams, successful organisation 1. introduction the social, political and economic context of the latest years have shaped, more and more, the differences between the traditional managerial approaches, where orders are in the focus, and the modern ones, where leaders inspire and motivate. a highly productive management combines efficient communication, identifying viable strategies for the company, motivating employees to excel, participanting in making smart decisions. in order to reach organisational success, it is considered that a good manager is the leader that you want to follow, the one that can possesses the strategies to keep close good people and also to recruit valuable ones. a team that has a common goal, with relationships based upon trust, can build much more than the people who make up the team would do invididually. we understand that it is necessary to introduce in organisations the performance culture and the continual learning, aspects that require the latest proactive approaches. within this context, we need to relate to the most recent researches in the field of management, that can develop the successful organisation. regarding this issue, an essential vector is managerial efficacy through the ability to do coaching. thus, coach-managers facilitate and maximize performance, forming teams orientated towards success. 2. what is coaching? the international federation of coaching defines coaching individually as „a partnership that accelerates the client`s learning rhythm, his performance and progress on an individual and professional level”, while the european coaching institute defines coaching as „a process that helps the client give up what he is now in order to transform into what he wants to become.” [1] from these definitions, we identify the performance stimulator role of coaching for any individual, both from personal and professional perspective. thinking about the fact that organisations are represented by groups, it is necessary to discuss the idea of a collective. in this regard, how would we realise a group coaching? why? because they are the ones that accomplish the goals of an organisation. therefore, we begin with thorton`s (2010) definition of team coaching, which he presents as a process of „coaching with a team in order to reach common goals, paying attention both to individual performance and to collaboration and performance at team level.” according to cockerham`s vision (2011), who tackles with group coaching, the process is defined as „ a group one, facilitated by an experienced coach and created with the intention to maximize the combined mailto:gheorghina_birladeanu@yahoo.com https://hallo.ro/dictionar-englez-roman/conscientiously 10 energy, the experience and wisdom of individual people, who have chosen to participate, with the purpose to reach organisational or individual objectives.” [2] from the two aproaches that go beyond the individual dimension, we distinguish differences in various areas, such as: communication, vision, mission, values, leaders and focuses. at the same time, we also point out the complementary aspects of individual coaching and team/group coaching that converge towards a common goal: the success and performance of the organisation. starting from the idea that the management team is the vital centre of the organisation, with major influence on its directions, the managers` decisions have reverberations on an individual level and also on an organisational level, an issue that influences the future of the company. if we balance the fact that the members of the leading team are usually chosen from the perspective of their functional responsabilities, but, sometimes, also for some subjective reasons, which have no connection with the specific of their competences, it is even more critical. more often than not, the managerial teams are really groups of senior managers, who do not work together, but make individual decisions. hence, it is clear that most of the teams do not sequentially assume the design and the future of the company. nowadays, shaping leading managerial teams by coaching is a relatively new phenomenon. approaching coaching in companies from a structural and functional perspective is the result of very powerful cultural models. the hegemony of the the business models from the occident (and from the usa) has definitively shaped the emergence and functioning of the management team from the top of the organisations. the current feature that an organisation needs is using management team as a consequence of the growth of diversity and complexity of problematical situations, as a consequence of the globalisation phenomenon and, of course, from inside company, as a consequence of the need to adapt to new global business models. on the other hand, it is known that in any management team, there is a series of functional blockages or communication dissensions, which, from the coaching perpective, can develop large niches of positive evolution and also niches of escalading them. the specialized literature appreciates the valencies of coaching regarding responsibility and team members` autonomy area, self-esteem growth, collaboration, developing leaders, involvement, dedication, loyalty, commitment, productivity, reaching organisational goals, assuming mentality and behaviour change, aspects that lead to achieving remarkable results. studies from romania specify that the biggest blockage of romanian managerial teams is the lack of a forum, of a reflection and dialogue cadre in the field of challenges that they encounter and of the roles that they have to adopt individually or as a team. team coaching brings a real support for escalading the difficulty to produce and keep a climate that impels interpersonal transparency, which then creates an impulse and an energy for the entire team, favouring collaborative actions with intensified results. thus, it is obvious that the managerial approaches with the help of coaching offers solutions for systemic remodelling of the team and for synergistic revival of the common strategy. 3. conclusions we conclude that the existence and practice of coaching creates efficient teams, to whom they confer sense to their work and direction regarding actions, with a consistent emphasis on motivational approach for employees and, of course, on the ability to delegate efficiently. thereby, a healthy environment is cultivated, with working teams that are autonomous, selftaught, that work thoroughly in the presence or in the absence of their manager and that lead to building a successful organisation. 11 references [1] https://mihaistanescu.ro/coaching-ul-echipei-de-management-i/#more-2427 [2] https://www.edalt.institute/introducere-in-lumea-coachingului https://mihaistanescu.ro/coaching-ul-echipei-de-management-i/#more-2427 https://www.edalt.institute/introducere-in-lumea-coachingului agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol 10 (2016) 9 a parallel between the general conditions of applicability of posdru – pocu bulzan ramona rebeca 1 roxana herdelău 2 abstract when we hear "pocu / posdru" we know that there are two funding programs carried out with the support of the european union and the state budget; pocu proposed for implementation in 2014-2020, and posdru implemented in 2007-2013. keywords: pocu, competitiveness, grant, structural funds introduction thus the two funding programs, strictly observe hrd human resources development programme 2007-2013 and pocu human capital development programme 2014-2020 presents the following fundamental successively sustainable development strategy of the eu economy as a whole taken. pocu continues in 2014-2020 in human resources development funding being allocated 5 billion euros 3 in the period mentioned above. 1. posdru objectives and scope of pos activities were established based on the analysis of human resource development. they have been defined in accordance with the following documents: 4 the joint assessment of employment policy employment (jap); national plan for employment 2004 2005; joint inclusion memorandum (jim); national strategy for employment 2005-2010; integrated guidelines for growth and jobs; accession economic programme 2005; short and medium-term strategy on continuous vocational training 2005-2010; the national strategy on social inclusion of young people over 18 who leave the child protection 20062008; government strategy for rromi people 2001; the national strategy for protection, integration and social inclusion of disabled persons in 2006-2013 "equal opportunities for people with disabilities towards a society without discrimination"; the national strategy of equality between women and men. strategy for decentralization of education (draft under discussion); strategic guidelines on education 2005-2008. 1 agora university of oradea, romania, e-mail: rebeca.bulzan2002@univagora.ro 2 agora university of oradea, romania, e-mail: herdelauroxana@yahoo.com 3 according to statistics data on fonduri structurale.ro 4 http://graduo.ro/economie/programul-operational-dezvoltarea-resurselor-umane-143961 accessed in 1st of november 2016 10 the main objective of pos dru was represented by human capital and increasing competitiveness on the labour market, by providing equal opportunities for lifelong learning and the development of a modern labour market. the specific objectives can be summarized as follows: 5  enhancing education and training of human capital;  human resources development in education;  promoting entrepreneurial culture;  facilitating the young people on the labour market. 2. pocu human capital operational programme sets out investment priorities, specific objectives and actions taken in the field of human resources, thus continuing investment through the european social fund in 2007-2013 and also contributing to the overall objective of the partnership (2014-2020 ap) european structural funds default and investment in romania, namely, to reduce economic and social development disparities between romania and eu member states. 6 parallel posdru – pocu posdru 7 pocu 8 priority axis 1. education and training in support of growth and development of knowledge based society priority axis 1. the initiative jobs for young people priority axis 2. connecting lifelong learning and labour market priority axis 2. improving the situation of young people neets priority axis 3. increasing adaptability of workers and enterprises priority axis 3. jobs for all priority axis 4. modernising public employment service priority axis 4. social inclusion and combating poverty priority axis 5. promoting active employment measures priority axis 5. community-led local development (dlrc) priority axis 6. promoting social inclusion priority axis 6. education and competencies priority axis 7. technical support priority axis 7. technical support priority axis 1. "education and training in support of growth and development of knowledge based society" has the general objective: developing routes flexible lifelong learning and increasing access to education and training by providing education initial and modern and quality, including higher education and research. ap 1 " the initiative jobs for young people " overall objective: sustainable integration on the labour market of young people, especially those who are unemployed, who are not in education or training, including young 5 idem, accessed in 2nd of november 2016 6 http://www.fonduri-ue.ro/pocu-2014 accessed in 1st of november 2016 7 www.fonfuri-ue.ro applicant's guide 2015 8 www.fonduri-ue.ro/pocu-2014 pocu synthesis http://www.fonfuri-ue.ro/ http://www.fonduri-ue.ro/pocu-2014 11 people facing risk of social exclusion and youth from marginalized communities, including the implementation of the guarantee for young people. priority axis 2. "connecting lifelong learning and labour market" overall objective: access to education, increasing employability and level of education and training of human resources through an approach of "lifelong" in context of the knowledge society. ap 2 " improving the situation of young people neets " sustainable integration on the labour market of young people, especially those who are unemployed, who are not in education or training, including young people who are at risk of exclusion social and youth from marginalized communities, including the implementation of the guarantee for young people. priority axis 3. "increasing adaptability of workers and enterprises' general objective is to promote entrepreneurial culture, flexibility and adaptability by supporting employment and enterprises competent, trained and adaptable. pa3 "jobs for all" access to employment for people looking for a job and inactive people, including long-term unemployed and people with little prospect of employment, including to the local initiatives of employment and support for labour mobility; self-employment, entrepreneurship and business creation, including some of microenterprises and small and medium innovative enterprises; adaptation to change of workers, enterprises and entrepreneurs; institutional modernization market forces work such as public services and private employment of the workforce and improving satisfaction market forces work by encouraging the mobility of workers and mobility program and through better cooperation between institutions and parties relevant stakeholders; increasing equal access to lifelong learning for all age groups in formal settings, formal and informal, updating knowledge, skills and competences of the workforce and promoting learning pathways flexible, inclusive by targeting and validation of competences acquired. priority axis 4 "modernisation of public employment service" overall objective: improve the quality, efficiency and transparency of employment services provided by the public employment service (anofm). pa 4 "social inclusion and combating poverty" socio-economic integration of marginalized communities such as the rromi people; promotion of social entrepreneurship and vocational integration in social enterprises and promoting social economy and solidarity to facilitate access to employment; increasing access to affordable, sustainable and high quality, including health care and social services of general interest. axis 5 "promoting active employment measures" has the overall objective to facilitate labour market integration of young unemployed and the long-term unemployed, attracting and retaining more people in employment, including in rural areas and supporting formal employment. ap 5 „community-led local development (dlrc)" local development. priority axis 6. "promoting social inclusion" overall objective: facilitating access to employment of vulnerable groups and promoting a cohesive and inclusive society to ensure the welfare of all citizens. ap 6 "education and skills" reducing and preventing early school leaving and promoting equal access to preschool, primary and secondary quality learning pathways including formal, non-formal and informal education and vocational reintegration; sustainable integration in the labour market of young people especially those who are unemployed, who are not in education or training, including young people who are at risk of social exclusion and youth from marginalized communities, including the implementation of security for the young; improving the quality and efficiency of tertiary and equivalent and access to them in order to increase participation and attainment levels, especially for disadvantaged groups; increasing equal access to lifelong learning for all age groups in formal settings, formal and informal, updating knowledge, skills and competences of the workforce and promoting flexible learning pathways including through career guidance and validation of competences acquired; increasing relevance labour market education and training systems, facilitating the transition from education to market forces work and 12 enhancing training and training systems, and their quality, including through mechanisms for anticipation skills, adaptation educational programs and the establishment and development of systems for learning at work, including dual learning systems and apprenticeship programs. priority axis 7 "technical assistance" aims general support for the implementation of pos dru and efficient use of the community financial support and national co-financing. pa 7 "technical assistance" improving the capacity of am and oi and pocu to manage and implement efficient and effective operational program; pocu improving beneficiaries' capacity to effectively and efficiently implement fse projects; raising awareness of beneficiaries and potential beneficiaries pocu regarding activities that may be subject fse, promotion and implementation of best practices and initiatives in the fse. posdru implemented while creating a human resource interdependencies between education and labour market development pocu implements this interdependence focuses on workforce quality through the development of human resources and skills of the labour market. the parallel between the two funding programs show changes regarding the applicability of their implementation so we emphasize: pocu financial and operational capacity 9 as a general rule, a legal entity cannot participate in more than 5 projects for each call for proposals, regardless of the applicant or as a partner. where is identified as participating in more than 5 projects on a request for proposals, all projects identified by the participating legal entity will be rejected. depending on the type of request for proposals, the applicant's guide specific conditions or amendments may contain exceptions to this rule. posdru financial and operational capacity: this condition does not exist. following a survey of the business environment and institutional framework, both by the funding authorities and their representatives directly, we found that a significant number of beneficiaries who have implemented projects posdru have difficulties in settlement of project expenditure, as effect of late payment applications for reimbursement and / or payment by the competent authority. the new financing program, pocu attempts by the ministry by funding authorities to regulate matters of a financial nature unwanted (unable to pay or the insolvency or bankruptcy) by capping the deposit up to 5 projects. pocu financial capacity of the partnership 1. public institutions 2. non-governmental organizations (ngos) older than 1 year 3. companies (sc) older than 1 year 4. non-governmental organizations (ngos) are older than 1 year 5. companies (sc) are older than 1 year posdru financial capacity of the partnership 1. public institutions 2. ong older than 1 year 3. srl older than 1 year 4. ong for less than 1 year 5. srl are older than 1 year the importance and relevance of this change is bringing added value to the principle of equal opportunities for posdru started and continued through this change, enabling the diversification of the types of companies to support the objectives well defined pocu. 9 guidelines on accessing funding under pocu 2014-2020, april 2016 13 pocu general rules on eligibility cash payments will only be used in duly justified circumstances (e.g. subsidies for the target group), only in situations where payments through the banking system or through postal order cannot be carried out. in these particular cases, the beneficiary shall require the prior consent of the am/oi pocu responsible. any cash payment made by the beneficiary / partner without prior am/oi pocu will be deemed ineligible. posdru general rules on eligibility: this condition does not exist. given the accounting policies romania's alignment with european and they are aimed at eliminating possible cash transactions so that pocu help achieve them by adding the above mentioned amendment. pocu expenses related to outsourced activities pocu funded projects are not mandatory auditing services and auditing. where, for implementing the project, the applicant decides to use the services, expenses will be classified as indirect costs. posdru auditing services and financial auditing quality assurance refund applications submitted during the implementation of the project and the expenditure incurred, are necessary services provided by a chartered accountant/chartered accountant and an independent auditor. analyzing goal this change, we can say that has both positive points and less favourable. we consider favourable financial terms that without mandatory outsourcing accounting expertise and financial audit intervenes in budget savings applicant also is in the process of gaining time applications for payment or reimbursement; the fact that an unfavourable accounting expertise and financial audit on the expenditure ensure their authenticity and accuracy, so if that occurred some errors, they could be checked and corrected. conclusion need for european funding for organizations in romania focused on human capital development have been, are and will be required to develop both horizontally and vertically to these organizations in this context based on the comparison between the two guides we conclude that the new guide pocu comes with a number of additions and clarifications but not enough detail on the small entrepreneur from romania. bibliography 1. according to statistics data on fonduri structurale.ro 2. guidelines on accessing funding under pocu 2014-2020, april 2016 3. http://graduo.ro/economie/programul-operational-dezvoltarea-resurselor-umane-143961 accessed in 1st of november 2016 4. http://www.fonduri-ue.ro/pocu-2014 accessed in 1st of november 2016 5. www.fonfuri-ue.ro applicant's guide 2015 6. www.fonduri-ue.ro/pocu-2014 pocu synthesis http://www.fonfuri-ue.ro/ http://www.fonduri-ue.ro/pocu-2014 medimond template 17 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 15 (2021) marketing influencer oana petrișor mateuț1 1 faculty of economic sciences, agora university of oradea, oradea, romania e-mail oana_mateut@yahoo.com abstract is marketing influence the right way or not for a business? investing in this type of marketing is advantageous or not for promoting a product or service. what type of marketing defines this strategy? we will discuss all these aspects in this paper. keywords: influencer, social network, followers, direct marketing. 1 introduction influence marketing is a form of social media marketing that involves referrals and product placement from influencers, people, and organizations that have an alleged level of knowledge or social influence in their field. who are these influencers really? there are people who are actually users and who have thousands or millions of followers on various social networks. among young people in particular, direct communication has passed into online communication on various social networks such as youtubers, an instagram, a blogger, a facebook page, twitter, etc. the difference between users and influencers is that the latter influences their followers. is a kind of opinion leader with charisma, authority, skills, sometimes in promoting products or services other times in promoting games. young people, whether they are teenagers or not, are very attracted to these influences, capturing all their attention and time. 2 current trends in marketing influencer early career is it difficult or easy to become an influencer? i tend to think it's not easy. why? it is not enough just to have a good computer dexterity but you need skill, spontaneity, presentation topics, communication skills and attracting the listener. because they have to choose the sector in which they want to operate, to have a web, a marketing plan, to know how to advertise, to a strategy to capture as many followers as possible, to create videos, live, pictures, articles and transmit them on different communication-socialization channels. after that, it follows the obtained results, monitors them in order to evaluate if the approached strategy is correct and is implemented correctly. but in addition to these free influencers, companies also hire influencers to work in the marketing department and control the economic value of the brand's popularity, those who work alone to promote the company. mailto:oana_mateut@yahoo.com 18 companies specialized in influencer activity have also appeared on the market, offering consultancy in this field. the value of an influencer is given by the number of followers and the size of the community. we also meet top influencers who are famous people on social media being known and who ask for a commission to advertise. micro-influencers who have a certain community of their own, well-formed, and where it has an indirect communication with the followers and who can influence their choices. this happens especially on the facebook page, and in the last year the most publicized aspect in facebook networks was sars-cov-2 pandemic. but do these influences, if they are not employed, have an income and it is made from this activity? yes, they can have income from this activity. how? they may have sponsors to advertise to, but not in the traditional sense, but actually through what they wear, taste, visit. many influencers are teenagers and after graduation they pursue a career. as in advertising, advertising is an influence for the promotion of a brand while in other cases it influences followers in the purchase of a good or service. thus, transforming them into customers or consumers. everything is a strategy to encourage users' buying behavior by presenting certain offers, coupons, discounts that appear. depending on the number of posts and views, the influencer can receive commissions for the products sold. when an influencer becomes known then there will be many companies that will look for him, in most cases this aspect is achieved especially through agencies. depending on the number of posts and views, the influencer can receive commissions for the products sold. when an influencer becomes known then there will be many companies that will look for him, in most cases this aspect is achieved especially through agencies. the incomes they get are not very clear but sometimes they can be very high. these incomes vary depending on the social networks they choose. in a studio made on the market, it seems that revenues obtained on the network: -facebook varies from 7000-200000 euro / post; -youtube: 14,000-330,000 euros / post; instagram: 6000-160,000 euros / post; twitter: 300070,000 euros / post. in the classification of influencers, we can find different classifications depending on the activity they post, having: marketing influencer forms a trusting link between the brand and followers (potential consumers). this type of marketing has started to catch more and more and lately the influence has moved from bloggers to vloggers. -travel influencer-dealing with the promotion of the tourism sector, fashion influencer the fashion sector, one of the most competitive; fitness influencer divided into female and male categories; 19 vip influencer various internationally known celebrities or well-known media people, we can still meet those thematic hashtags. to understand what these hashtags are and how they are used. these are the posts that can bring you popularity. we see everywhere on social media. sometimes really misused. "click" has become the most commonly used method at the expense of promoting dor to dor, word of mounth. 3 conclusions global technological developments have brought an involution of today's young people in terms of communication, reading a book-story, playing outdoors and various sports activities. but this is the goal that an influencer has to get as many followers as possible, he having a great reliability and independence in his actions. digitization is more and more developed, slowly the tangible system is replaced with the electronic part. what will happen next? time will tell. references medimond template 1 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 15 (2021) the effects of foreign direct investment on the host country cristina ioana antik1, 1 faculty of legal and administrative sciences, agora university of oradea, oradea, romania e-mail antikcristina@yahoo.com abstract a corresponds to any flow of foreign direct investment (including loans) granted to foreign companies, provided that residents investing country (in general enterprise) have an important part of this business property. it is distinguished from short baths capital movements. direct investment involves mobilization of capital transferred abroad. for this reason, the national statistical departments groups, often under the term direct investment, purchases of shares and long-term loans to the same group of companies that contribute to the industrial capital of the lending company, ie its production capacity. keywords: foreign direct investment, balance of payments, monetary fund 1 introduction the concept of direct investment aims to deliver a technically defined strictly understood as an acquisition of securities. according to the definition given by the international monetary fund in 1977, the balance of payments manual, foreign direct investment "means an investment that aims to acquire a lasting interest in an enterprise operated in a country other than the investor, for the latter influence the actual management of the undertaking concerned"1. is considered to be a direct foreign investment, foreign investors should have 10% or more of the common shares or voting rights in an enterprise. thus, once the firm invests at least 10% holding company foreign direct investment includes any investment, be it a new purchase or a simple loan. i think romania should, where possible, to ensure domestic needs without resorting to imports, the efficiency of resource investments taking into account the correction of these resources to productive romanian companies to develop local potential, so that accumulation of capital to produce the country's borders, be kept and used by it. also "establish an appropriate ratio between the share of resource allocation to the investment objectives that will contribute to the country's economic revival term generating long-effect in terms of future investment and resource allocation share for targets that do not generate propagated effects in the investment plan, but which are socially necessary"2. in one of his books, french economist p. joffre says that foreign direct investment by international capital flows is an enterprise in one country creates or develops a subsidiary in another country. such an increase direct foreign investment in production capacity abroad, through its subsidiary. the distinguishing feature of direct foreign investment is that it involves not only 1 phlindert-international economics, economic publishing house, paris, 1997. 2 vesea ic, resource efficiency investment, annals of university "eftimie murgu" in resita section regional economic development, ed eftimie murgu, 2008 mailto:antikcristina@yahoo.com 2 a transfer of resources, but is accompanied by another decisive element: control and power purchase decision on the company investing assets of value added by virtue of a long interest shown by this term. this branch is not just financial obligations in relation to the parent, but it belongs to one and the same organizational structure. subsidiary company controlled by the parent receives from it, frequently and directly inputs such as different techniques, trade secrets and various instructions, the use of intellectual property rights, management rules and intangible assets other type. consequently, direct investment is not only a movement of capital, direct investment flows, regardless of their destination, is the sum of: • net capital contributions provided by investors in the form of acquisition of shares, capital increase or creation of new enterprises; • net loans, including loans or advances on short term of the parent to its subsidiary; • undistributed profits and reinvested. the need for capital investment amounting to a level far beyond the current economic condition requires resorting to capital objective of attracting foreign direct investment as capital, a common characteristic of all former communist states. thus, in this respect is already an interest of both parties, both from investor and foreign capital and domestic investors from. the imminent integration of countries in eastern and central europe with the western european union, driven by strategic interests of both parties, requires the expansion of international cooperation with other countries, especially those developed and accelerating the transition to market economy, open horizons to real international cooperation. in fact, immediately after the collapse of the socialist system, the countries of central and eastern europe such as hungary, poland and former czechoslovakia, and bulgaria and romania have initiated various steps for certain actions such as regional cooperation between countries bordering the black sea, creating border economic zones, etc. they also passed at the request of understanding with the european community, with which signed association agreements or ftas. the force required to accelerate this process of transition to market economy and accession to the european union lies only in the availability of capital. aware, in turn, that the main obstacle they have to face is the lack of transition states and capital, respectively, private investment, production and services, western european countries show great interest in financial aid economies in transition. the transition to a market economy is characterized in all the eastern and central european economies to national instability, economic decline, the real crisis of capital and dangerously low rate of investments, especially those productive. virtually all national economies in transition are marked by deep imbalances due to the decrease in labor productivity and time actually worked, and union pressure on wages and declining management capacity of the new leadership team. the high rate of interest, which in recent years romania was among the first countries in transition, was a leading cause of reducing propensity to invest. in these circumstances each national economy is evident inability to cope with the former communist alone equity absolute need to ensure a minimal growth. the need for foreign capital lies, then, precisely in their inability to ex-communist national economy to meet the need, even minimal capital investment recovery, which, if continuing rebound in the years immediately after 1990, likely 3 to throw these economies in total dependence on the developed world, with serious consequences in the medium and long term. on the other hand, this need for foreign capital is enhanced and more lagging behind the technological level of industrial production facilities and countries in transition. 2 effects of foreign investments on host country governments must decide by their actions at the national investment policy, which is why their national territory, governments may limit or prohibit direct investments in certain sectors and also different ways to regulate the operations of foreign companies, the to require local participation in new activity, the training of personnel, procurement of components of national origin, common research, access to markets, etc. currently, we are witnessing a "yard" hard that many governments do multinational companies, offering various forms of subsidies to encourage them to locate their operations in the country. basically, now the competition has shifted from firms to the government, which compete in granting substantial incentives to influence foreign investors to choose their countries as multinational location. effects on the host country are not necessarily symmetrical with those exerted on the country of origin, in addition, they will not have the same impact as the host country. effects on economic activity can be considered, a priori, as good as foreign investment stimulates production, employment and development. by adding new activities or by increasing production companies taken over, and increase national production, thus, the overall pace of economic growth can accelerate. direct contribution of foreign saving increases domestic investment opportunities, encouraging growth in the medium-term, often contributing and improving labor productivity due to new knowledge and techniques available to the receiving nation, without additional expenses on its part. resource allocation is improved, to the extent that foreign firms invest, normally in areas where the nation has a comparative advantage that it could not exploit enough, usually because of low domestic saving potential. consequently, the overall economic efficiency should increase, in turn, competition could be stimulated by the entry of new producers in the sector, which could lead to a regrouping c ear of local firms. however, in comparison with local competitors, "the foreign subsidiary is in a privileged position: it benefits from a lower cost and direct access to technical knowledge of the parent company, in part to its resources, better conditions credit local and international financial markets (the parent company guarantee) usually, it may have managerial skills, marketing or organizational multinational company. but all these are more difficult to adapt national local companies " on the other hand, multinational companies, seeking to plant a new production unit in a country accepts more easily than national firms to locate in regions in difficulty or whose development is a priority because they can more easily avoid various trade barriers, seeks to take maximum advantage of available public aid and rely primarily on an economic calculation that advantage-costin their bargaining power allows them to increase benefits (subsidies) and reduce costs. then, implantation of a new company that allows the host country, while, to increase tax revenues, at least insofar as the tax relief granted is not systematic. at the same time reducing the risk of receiving the nation's independence and autonomy cannot be ignored, since the policy of increasing production and subsidiary is defined as 4 mother company interests, interests that may not converge with those of the nation. the codes and investment agreements, the un and oecd do tend to define and to respect the rules accepted by the company and the nation, although apparently no reasons why a company would sabotage an installation cost on economic grounds. effects on balance of payments, the positive effects (entry of foreign currency) are primarily due to capital inflows through acquisition or construction of facilities, hiring staff initially paid by the parent company (as long as nua branch developed its production activities and sufficient sales to self-financing his expenses) as a result, the trade balance will record exports branch (even at cost of transfer to the parent company) and possibly reduce imports manufactured good from now, locally. the negative effects are related to the repatriation of dividends, purchase of machinery, parts, intermediate goods imported to ensure its production subsidiary, to pay dividends, royalties paid for the right technology. in general, it is difficult to make overall judgments allowing to say a priori that the host country always benefit or lose in a systematic way with the implementation of a branch of foreign companies, to establish such a court should be able to compare the situation nine with the presence of foreign subsidiary, the situation would have known that a country without direct investment, which is considered to be impossible. criticism of foreign direct investment start from the fact that direct investment has negative effects on the balance of payments on short-term investor friendly country in the long term. from the viewpoint of the host countries, direct investment is considered to be "expensive". a small investment that has weak effects on balance of payments in the early years, is transformed by "game" reinvestment in a company whose returned income (dividends, salaries) can become substantial3. as a fundamental principle, the direct investment that brings high profits is a sign of very weak balance between supply and demand, therefore, the market would be that new "players", so that offer profits to rise until reaching a normal level. these positive and negative effects on economic activity and balance of payments of the host country will be found, the more nuanced way, the economy, developing countries in which the situation and romania. their economic instability may prevent you from benefiting from the favorable effects of implantation of a subsidiary in their territory, and instead to strengthen the unfavorable. developing countries generally have a dual economy and disjointed, which makes the development of the subsidiary may not be passed only on the overall economy and weak, some of the effects of domestic product growth of the branch to be transferred to foreign suppliers not for national activities in the upstream production process, there is not such a juxtaposition and interdependency between the "modern" and the branch to which it belongs "traditional" of developing countries moreover, the choice of technology and is based on factors of constraints weighing on the economy of the country of origin and, of course, inadequate to the host country factor endowment: appropriate technology would allow a lower employment use of a capital insufficient but the cost of adapting their research or multinational company is excessive. due to the relative size ratio of developing countries and multinationals, the host country may lose some of its sovereignty, its economic effectiveness and monetary policy, its development policy. it comes therefore to a situation where a limitation is desired for a multinational company to benefit from its implantation without excessive costs. 3 h. henner international commerce, economic publishing house, paris, 1992. 5 at present, however, host countries, developed or developing, are interested in attracting companies, that it was an auction in the system of subsidies and tax relief, the bargaining power of multinational companies back. 3 conclusions direct investment is a factor of economic development in countries succeeded in entering a surplus capital can be consciously directed benefit effects on macro-economic indicators of a country. the role of direct investment is just so crucial for developing countries by some government facilities may need to raise capital development, development that benefits both in terms of human resources and in financial terms. references [1] henner international commerce, economic publishing house, paris, 1992 [2] phlindert-international economics, economic publishing house, paris, 1997. [3] vesea ic, resource efficiency investment, annals of university "eftimie murgu" in resita section regional economic development, murgu eftimie publishing, 2008 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol 10 (2016) 45 how much has benefited romania from ten years of eu membership? bogdan meunier 1 , constantin zaman 2 abstract: we analyse in this paper the main achievements of romania during the period of ten years since joining the european union. the analysis is based on a proposed index of structural changes constructed that express the overall progress in five areas: business environment, labour market, state institutions, taxation, and human capital. the analysis is carried out in a comparative perspective, at three levels: with bulgaria, which joined the eu the same year; with three countries from western europe; and with a group of countries from central and eastern europe that integrated the eu earlier, in 2004. we find a strong convergence between romania and the other neighbouring countries, as well as a slower but increasing convergence towards the “old” eu member states. key words: labour market, taxation system process, stronger economic 1. introduction after the first wave of eu enlargement towards the eastern part of the continent, which took place in 2004, romania and bulgaria joined the european union in 2007. the eu integration of countries belonging to the former communist block was aimed at modernising the institutional and legislative framework in the new member states, while bringing significant economic advantages from trade openness, investment enhancement and increased competitiveness of domestic commodities, all culminating with a major improvement of living standards of the population. the advantages of joining the eu have been amply analysed in the specialised literature. apart from the positive impact on democracy (sedelmaier, 2014), the process enhanced the overall european cohesion (weisse et al, 2001) and contributed essentially to peace and stability on the continent (avery et al, 2009). in economic terms, the eu integration of central and eastern european countries has brought stronger economic growth according to a first evaluation of the european commission (2006). this growth accelerated the process of economic convergence between old and new member states (euractiv, 2010), in particular as a result of increased flows of foreign direct investment, trade liberalisation (efstathiou, 2011) and improvement of labour productivity (campos et al, 2014). all these elements bring more efficiency in production at the firms’ level (bchir et al, 2003) and therefore increased competitiveness. 1 centre d’economie de la sorbonne paris 1 département economie internationale et développement 2 centre d’economie de la sorbonne paris 1 département economie internationale et développement, e-mail czaman@noos.fr 46 in general, the literature on assessing the impact of eu enlargement is relatively scarce, and no major studies have been elaborated for the romanian case. in this paper we therefore attempt to evaluate quantitatively the qualitative outcomes of a decade of eu membership. instead of focusing on the final impact, we analyse the evolution of structural elements that have led to those positive outcomes: economic competitiveness, improvement of institutional and legal framework, and the overall progress in terms of human development. the second section of the paper presents the methodological background. the results of the assessment are described in section 3, while the last section summarises the main conclusions and findings. 2. the methodological framework the evaluation of romanian progress over the first decade of eu membership consists of constructing an index of structural changes (isc), which shows the cumulative effect of reforms in five major areas. in each area we use an indicator that is internationally comparable and, at the same time, expresses the best the evolution of the situation over the corresponding period: i) business environment: the economic integration in the eu is equivalent to a major improvement of entrepreneurial conditions, such that private businesses can operate in a competitive environment. the most appropriate indicator in this case is the business freedom (bf) used by heritage foundation (2016). the index is a quantitative measure of the ability to start, operate and close a business, and therefore represents the overall burden of regulation as well as the government efficiency in the regulatory process. it takes values from 0 to 100, the highest value expressing the freest business environment. ii) labour market: the second important element of economic progress is related to the overall regulatory environment on the labour market. a permissive business environment without a friendly framework for employment will be damaging for the overall economic performance. the indicator used to express the evolution of changes on the labour market is the labour freedom (lf), equally provided by heritage foundation. the index is determined as a quantitative measure of legal and regulatory framework on the labour market, and measures the impact of regulations in terms of minimum wage, layoffs and hiring procedures, severance requirements, etc. the lf takes values from 0 to 100, the highest value representing the freest framework. iii) state administration and institutions: good governance at the level of state administration favours significantly the economic environment through the appropriate translation of public policies into adequate conditions for individuals and businesses to develop. the most important element that negatively affects the good functioning of public institutions is the corruption. consequently, the indicator used for analysis of this domain is the corruption perception index (cpi) of transparency international (2015), which expresses the perception of experts and business people on the corruption in the public sector. it ranges between 0 and 100, the lower values indicating high corruption. iv) taxation system: while the business freedom and labour freedom describe the situation in the private sector, the taxation system indicates the efficiency of the government in using public resources – therefore in ensuring social equity in the redistribution process. the individuals and the businesses are ready to pay taxes if the collected revenues are properly, efficiently and transparently used. these elements are well reflected by the paying taxes (pt) indicator proposed by the world bank (2016) in the doing business ranking. the indicator expresses the ease of paying taxes by firms and households in terms of time spent for paying them, the rate of taxation, and the number of taxes charged. it ranks from 0 to 100, with high values indicating a performant – therefore easy to pay – tax system. v) human capital: the ultimate objective of any government policy should be the development of human capital through the provision of adequate social services in education, health care and social protection. this can be the best expressed by the un (2015) human development index (hdi), which combines those elements. like the previous indicators, the hdi takes values within the interval 0 – 100, high levels indicating a developed human capital. these five indicators are combined to calculate an aggregate index of structural changes, using a similar methodology like the one developed by meunier and zaman (2015). the first step is to represent the corresponding indicators in a pentagon of structural changes (psc); this gives visual information about their respective individual contribution to the overall performance of the country during the period. then we calculate the area delimited by the five indicators; the isc is the percentage share of the corresponding area in the total surface of the pentagon. 47 3. the interpretation of results in figure 1 we represented the psc in 2006 – the year before eu integration – respectively in 2016 (annex 1 provides the pentagons for the remaining years from 2007 to 2015). it can be observed that over the whole decade of eu membership romania recorded a net progress with respect to three indicators: labour freedom, which increased from 57.5 to 65.1; corruption, where the cpi gained 16 units; and paying taxes, which recorded the most significant progress (an overall increase by 80%). however, there is a net regress of the business freedom indicator (by 8.5 units lower), respectively human development index, which passed from 83.2 in 2006 to 79.3 in 2016. figure 1: the pentagon of structural changes in romania (2006 and 2007) overall, the isc gained almost 10 units over the period (figure 2). however, this progress was achieved practically during the last 4 years, starting with 2013; in 2012 romania was practically at the same level as the one recorded in 2006, prior to the integration. moreover, during the first three years after joining the eu, there was a regress in the overall performance, but this seems to be a common trend for most of the other countries in europe. the highest isc was recorded in 2015 (48.71); the decline in 2016 is due to the deterioration of two indicators: labour freedom and business freedom; each of them lost in 2016 more than 5% of their previous values. at the level of individual indicators, the most impressive improvement is recorded by paying taxes, which almost doubled its value over the ten-year period, followed by the corruption index, which increased by 53.3% over the same time horizon (figure 3). modest progress has been recorded in the field of labour freedom, while the human development index in 2016 was lower than a decade ago. the hdi deterioration is essentially caused by the massive emigration of educated romanians; in 2008, one year after joining the eu, the indicator dropped suddenly by 11.6% as a result of the emigration phenomenon. as compared to neighbouring bulgaria (bg), which joined the eu the same year, romania (ro) started the period with a handicap of more than 7 units in terms of structural performance. in 2006, the isc of bulgaria amounted to 44.93, while the romanian one was only 37.76; that year, the highest difference between the two countries was at the level of labour freedom (1.4 times superior in bulgaria) and corruption (33.3% higher in romania). only the business freedom indicator of romania was above the bulgarian level in 2006 (5.8% higher). however, ten years later, romania recorded an isc of 47.79, which is slightly higher than the one recorded the same year by bulgaria (46.23). it means that the pre-accession reforms were better prepared in bulgaria, but the eu integration helped significantly the structural convergence between the two countries. 48 when compared to some of the “old” member states (figure 4), romania is still far from countries like germany (ge) and united kingdom (uk) with respect to the index of structural changes, but relatively close to france (fr). however, the isc gap between eu average and romania has shrunk significantly since the accession (figure 5). this is partially due to the decline in the overall performance in france and uk, but mostly to the major increase of isc in romania between 2006 and 2016 (figure 6). 49 50 as a first conclusion, the eu integration has contributed to a large extent to the convergence between the new members of the union and their western counterparts. this process has been facilitated by the rapid progress of reforms, in particular in romania, but also by the relatively lower speed of progress in western countries. it seems that the economies of “old” members of the union have reached a steady state level of growth in overall performance, which allows the new members to catch up: in ten years, the gap between the highest and lowest index of structural changes passed from 41.85 (between uk and romania) in 2006 to only 25.8 (between uk and bulgaria) in 2016. if the current trend persists, by 2022 romania will reach the french level of performance; however, in order to catch up with the most advanced countries (germany and uk), romania will need 20 years from now, under the assumption that the current trend remains the same in the future. another interesting comparative analysis is between romania and the group of countries from the former communist block that joined the eu earlier, in 2004. the aim of this comparison is to see if a common path of transformations is present in the two situations. in figure 7 we represented the isc for romania on one hand, and for poland (po), hungary (hu) and czech republic (cr) on the other hand. for the sake of consistency in terms of comparison, we represented the index over the period 2006 – 2016 in case of romania, respectively between 2003 and 2013 for the other three countries. in this way, we analyse the isc evolution over the first decade of eu membership in both situations. we can observe that romania, czech republic and poland are very similar at the starting point; only hungary entered the eu from a better position, but after ten years all countries in the sample are very close with respect to index of structural changes. moreover, romania, poland, and czech republic follow an almost identical evolution. a decade of eu membership has therefore brought a strong convergence between those four countries. 51 4. concluding remarks the eu membership is first of all an institutional status. a new member state has to comply primarily with a clear set of rules and obligations of legal and institutional nature at state level, aimed at building good governance principles in the country. this will translate into well-functioning public administration, where corruption is reduced considerably and the relations with the citizens are based on confidence and transparent practices. in turn, good governance induces a friendly and incentive-based environment in the economy, which will stimulate business development and wellbeing of individuals. it follows that there is an order of importance within the above group of indicators used to calculate the isc. the essential element that ensures a successful path of transformations is the one related to state administration and institutions, expressed by the cpi in our analysis. reducing and eliminating the corruption in public organisations will ease the relations between authorities and citizens (paying taxes indicator) and will induce fair competition in the economy – thus improving the business environment (bf indicator) and labour market environment (lf indicator). not surprisingly, the most impressive progress of reforms in romania, which boosted the isc, started in 2013; this coincides with the extensive anti-corruption operations of the specialised romanian agency. the eu membership is therefore a guarantee for remediating the legal and institutional dysfunctionalities, which will trigger the improvement of business and employment conditions in the economy. however, the eurosceptical views on the role of eu integration argue that this sequential process of reforms can take place without being part of the european union. this opinion is contradicted by the comparison between an eu insider (romania) and an outsider (albania). in figure 8 we represented the index of structural changes of the two countries. as an outsider, albania has achieved some progress in the field, but this progress is not sustainable in long run. the initial convergent path between the two countries over the period 2006 – 2012 is reverted starting with 2013, when a divergent trend is observed. the highest isc recorded by albania (37.6) is practically at the level of the lowest romanian value. this is mainly because in 2016 the corruption indicator of albania corresponds to the romanian cpi prior to 2008. 52 references avery, g., faber, a., schmidt, a. (2009). enlarging the european union: effects on the new member states and the eu. trans european policy studies, brussels. retrieved from https://www.um.edu.mt/__data/assets/pdf_file/0017/71054/enlarging_the_european_union.pdf bchir, h., fontagné, l., zanghieri, p. (august, 2003). the impact of eu enlargement on member states: a cge approach. cepii working paper no. 2003-10. retrieved from http://www.cepii.fr/pdf_pub/wp/2003/wp200310.pdf campos, n. f., coricelli, f., moretti, l. (april, 2014): economic growth and political integration: estimating the benefits from membership in the european union using the synthetic counterfactuals method. iza discussion paper no. 8162. retrieved from http://anon-ftp.iza.org/dp8162.pdf european commission (may 2006). the economics of enlargement. economic and financial affairs. retrievedfrom http://ec.europa.eu/economy_finance/international/enlargement/economics/index_en.htm efstathiou, n. (october, 2011). the impact of the european union enlargement on the member countries economic growth. an econometric analysis. erasmus university. euractiv (january, 2010). economic and social impact of enlargement for the european union and france. retrieved from http://www.euractiv.com/section/enlargement/opinion/economic-and-social-impact-ofenlargement-for-the-european-union-and-france/ heritage foundation (2016). index of economic freedom. retrieved from http://www.heritage.org/index/ meunier, b., zaman, c. (december 2016). a proposed index for measuring the implementation of reforms. domestic development strategies journal, vol. 3, issue 185. sedelmaier, u. (june, 2014). europe after the eastern enlargement of the european union: 2004-2014. retrieved from https://eu.boell.org/en/2014/06/10/europe-after-eastern-enlargement-european-union-2004-2014 transparency international (2015). corruption perception index. retrieved from http://www.transparency.org/cpi2015 united nations (2015). human development report. retrieved from http://hdr.undp.org/en/2015-report weise, c., bachtler, j., downes, r., mcmaster, i., toepel, k. (march, 2001). the impact of eu enlargement on cohesion. diw & eprc report. retrieved from http://ec.europa.eu/regional_policy/sources/docgener/studies/pdf/enlarge.pdf world bank (2016). doing business. measuring business regulations. retrieved from http://www.doingbusiness.org/ https://www.um.edu.mt/__data/assets/pdf_file/0017/71054/enlarging_the_european_union.pdf http://www.cepii.fr/pdf_pub/wp/2003/wp2003-10.pdf http://www.cepii.fr/pdf_pub/wp/2003/wp2003-10.pdf http://anon-ftp.iza.org/dp8162.pdf http://ec.europa.eu/economy_finance/international/enlargement/economics/index_en.htm http://www.euractiv.com/section/enlargement/opinion/economic-and-social-impact-of-enlargement-for-the-european-union-and-france/ http://www.euractiv.com/section/enlargement/opinion/economic-and-social-impact-of-enlargement-for-the-european-union-and-france/ https://eu.boell.org/en/2014/06/10/europe-after-eastern-enlargement-european-union-2004-2014 http://www.transparency.org/cpi2015 http://hdr.undp.org/en/2015-report http://ec.europa.eu/regional_policy/sources/docgener/studies/pdf/enlarge.pdf http://www.doingbusiness.org/ 53 medimond template agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 14 (2020) consideration over a happy organization gheorghina liliana bîrlădeanu1 1 faculty of juridical and administrative sciences, agora university of oradea e-mail gheorghina_birladeanu@yahoo.com abstract ”the happy organization” is based upon a strategy of happiness that brings real joy to the employees having the purpose to obtain productivity, innovation and profit growth. happiness at work has not been just a simple “buzz” for a long time, it has rapidly transformed in strategies and objectives implemented in the day -to-day managerial plans of the top management in general and of the human resource manager in particular. keywords: happy organization, the management of happiness, the strategy of happiness, “the humanization” of the managerial strategies, intelligent and emphatic management, a family type organizational climate 1 introduction taking into consideration the full and effervescent life, but also the current pandemic, we are more and more preoccupied with happiness. from an organizational perspective, we have become increasingly conscious of the importance of happy employees because happiness determines them to be more productive, more satisfied and more attached. for that purpose, it is necessary to make more efforts to satisfy our employees. of course that the road from a smile to organizational happiness is a difficult and complex one, requiring empathy and a well-defined strategy. the state of happiness, balance and well-being in an organization proves to be a “must have” for the long term success of any organization. the studies show that the employees motivated and satisfied with their jobs are more productive and creative. they are also more involved in the organizational activities. that is why we ask ourselves a lot of questions: ”how do you build a happiness strategy in an organization?”, ”how can a performance culture produce satisfaction and involvement?”, ”what are the steps of creating a positive work environment?”, ”what does a human resource manager need to do in order to have a friendly work atmosphere in the organization, but also stringent enough to determine performance and involvement?”, ”how do you form an organizational culture that promotes worthwhile work?”, ”what is the role of the employer branding segment?”, ”which are the levers used by the organization to raise the employees` engagement and wellbeing level?”. 2 section pursuing happiness at any cost is a delicate process that requires professional managerial competences, since, in any organization, the border between happiness and unhappiness is extremely thin. the manager`s art consists in the ability to know how not to pass this border and what represents the basis of the wellbeing of an organization, taking into consideration: leadership, management systems, human relationships or the human quality of those representing the organization. what do we understand by happiness at the workplace? in this respect, we need to be aware that happiness is a positive state generated by three very important vectors: mailto:gheorghina_birladeanu@yahoo.com ➢ involvement – a concept which means that the focus is set on developing the employees` potential so as to protect them from the effects of possible stress factors and to raise productivity. ➢ satisfaction – it is a positive state that results from the employee`s attitude at work. ➢ commitment – we are discussing three types of organizational commitment: the affective one that can predict the employees` performance, the continuity commitment and the normative one that can predict the probability for an employee to leave the company.1 according to a research from warwick university, happiness raises productivity with up to 12%. laura kubzanki, associated professor at harvard school of public health demonstrates the fact that happiness reduces stress and illness risk. in the same context of benefits, we mention goodthink inc. research, which shows that happy employees are very good team people. the results of iopener institute researches prove that happy employees distinguish themselves by a medium engagement duration four times higher and a retention level much bigger. the ”happiness is contagious” study made by harvard universities from california demonstrate that happiness is contagious because they emanate in the working environment the manifestations of joy, offering the team well-being. moreover, it has been proved by research studies made iopener institute for people of performance that happy employees reach their goals at work by 31% more than other, thereby meaning that also the organizational goal is achieved. in this context, it is extremely necessary for every manager interested in his own company success to race the engines to their full potential in the process of raising the employees` satisfaction by initiating and developing a variety of actions under the form of theme parties, team activities, different trainings and diverse office benefits. but we cannot say that these are the only measures meant to produce employees` happiness. achieving the employees` happiness and implicitly that of the organization, compels the managers to realize and apply a strategy of happiness that is characterized by a high level of complexity and requires three steps: ➢ realizing an organizational diagnosis that can identify the positive elements in order to be fructified exponentially. for measuring the various indicators, this stage will use a multitude of scientific instruments and different observation methods. ➢ implementing the strategy represents what we have set as goals and what we distribute through the different programs that we have established for this stage. these programs will be selected as a follow-up to the diagnosis. thus, we emphasize some of these, which are eventually potential ways of producing organizational happiness: training, teambuilding and coaching programs. ➢ in order to convince ourselves of the profitability of the chosen programs and also of the success of the organizational actions, we need to move on to the third stage which means the assessment and sustainability of the program. this last stage contains two inseparable steps, the assessment which will accentuate the efficiency and effectiveness of the strategy, and the sustainability which will lay stress on maintaining in the organization the already created attitudes. these attitudes that are the targets of the organizational happiness strategy have as founding elements: „the humanization” of the managerial strategies, the implementation of an intelligent and emphatic management, the formation of a family type organizational climate, the manager`s and the employees` human-emphatic personality and behavior. 1 https://www.todaysoftmag.ro/article/1479/cu-un-zambet-nu-se-face-primavara-stiinta-fericirii-in-organizatii https://www.todaysoftmag.ro/article/1479/cu-un-zambet-nu-se-face-primavara-stiinta-fericirii-in-organizatii 3 conclusions we conclude by saying that a scientific founded strategy on the basis of a real diagnosis and of an implemented complex program can bring to the company and to its employees great quantitative and qualitative benefits by the materialization of some pragmatic actions, moving on from its abstract statute of organizational happiness to concrete and measurable actions. we reiterate the importance of the personnel`s quality and of the manager`s personality, these being the foremost ingredients in the management of happiness. references [1] cole,g.a. , the personnel management, bucharest: codecs., 2000. [2] mihuţ, i., general elements of management theory and practice, in the manger`s guide, mago publishing house, sibiu, 1997 [3] ştefăroi, p., the happiness theory in social assistance, lumen publishing house, iaşi, 2009. [4] ştefăroi, p., the particularity of the efficient management in the field of social assistance, social assistance magazine, no. 3, polirom publishing house, 2007 [5] https://www.todaysoftmag.ro/article/1479/cu-un-zambet-nu-se-face-primavara-stiinta-fericirii-inorganizatii https://www.todaysoftmag.ro/article/1479/cu-un-zambet-nu-se-face-primavara-stiinta-fericirii-in-organizatii https://www.todaysoftmag.ro/article/1479/cu-un-zambet-nu-se-face-primavara-stiinta-fericirii-in-organizatii medimond template agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol 11 (2017) the adaptation of management consultant profession from international trends to romanian market conditions felix-angel popescu 1 , laurențiu petrila 2 1 doctoral school of economics, university of oradea, university street, no. 1, oradea, romania 2 doctoral school “european paradigm”, babeș bolyai university, emanuel de martone street, no.1, cluj-napoca, romania e-mails felixangelpopescu@gmail.com, lauren.petrila@gmail.com abstract as a point of reference on the romanian market for management consulting services, it can be stated that its evolution over the last years has suffered a positive impact, in principle, due to the relative overcoming of the period of economic recession. of course, this does not mean that the situation of client companies is extremely favorable, because it is precisely this period of return and re-adjustment to market requirements that has led to cost cutting measures, including management consulting costs. keywords: management, consulting, profession, market, romania. 1 introduction in order to understand such a general concept like management consulting, a broader definition given by specialists assimilates it to “an added value, an optimizing factor of the resources of organizations in the public and private environment, an instrument of human and material resource efficiency, adapting technological processes to market conditions and needs” [1]. although it may sound like an eulogy, rather than a definition, other specialists think bigger when it comes to acknowledging the benefits of management consultancy by saying that a company is similar to the human body. “when a dysfunction occurs, it can be repaired following treatment. similarly, in a company, many types of problems can arise: many companies are quite healthy although a little physical exercise and a change in diet would make them stronger” [1]. the two definitions denote an evolution on the perception of consulting services, from simple research projects, in the past, to increasingly complex organizational transformation processes from a personal point of view, from here a question can be raised: does economic growth generate the gradual development of the consulting services, or the benefits of the consulting services determine the economic growth?, question that we have tried to answer in a previous paper [4], in relation to the structural and cohesion funds consultancy sector in romania. if we look in the past, we would find that in the early 1900’s, management was strongly related to technologies, in other words, the us initiators of this science like f. taylor, h. gantt, a. little, h. emerson [2] called it management engineering, only years later being transformed into a more commercial meaning, that of management consulting. there was also a generational shift in the existence of management consulting market, because during that period most of the companies were working with the industrial and the governmental sector, like the company of a. little or e. booz [2]. then there started to appear companies mainly focused on strategic management, like those of j. mckinsey or boston consulting group [2]. but why are we talking only on the us side? because, in the american leadership psychology, the gesture to appeal to competences from outside the organization was seen as a normal solution to solve the respective problem. mailto:felixangelpopescu@gmail.com mailto:lauren.petrila@gmail.com 2 the introverted leaders were found in europe, where it was not acceptable to call for help from outside the organization and even worse, to pay for it. in france or germany, there was a higher self-esteem among the business sector and it was promoted the idea that european leaders were better trained than the fellow americans. indeed, if we analyze the creation of the global market for management consulting services, it can be observed that international trade expansion has left aside this kind of vanities and has permitted american management consulting companies to go deep into the european market, most of them gaining good reputation until present. 2 the birth of management consultancy in romania, during the transition from the state centralized economy to the market economy 2.1 the introduction of management consultancy standards and the development of regulations regarding the management consultant profession in romania in romania of the mid 1900s, the state centralized economy did not have anything to do with the concept of management consulting, so the united nations tried to implement this concept by establishing a center for professional development [1] in bucharest, with the aim of bringing in foreign lecturers. the late 1900s caused the fall of the communist regime and the institute, even if it changed its name into romanian institute of management [1], it gradually lost its market and staff, facing direct competition from numerous american consulting and training companies installing on the romanian liberalized market. following its accession to the european union in 2007, romania adopted the liberal professions code, according to the directive of the european commission on the recognition of professional qualifications (2005/36/ec) [3]. even if romanians were getting used to the idea that liberal professions were provided on the basis of a relevant professional qualification by those who provide intellectual and / or creative services, in the interests of clients, it was difficult to understand why management consulting was a liberal profession self-regulated through industry bodies, and not by laws. from this point of view, the transition from a state-centralized economy to the market economy gave some headaches in understanding the new forms of legal organization and functioning in romania, and it became much easier for larger companies which had their own procedures for attesting the consultants or were part of professional associations in which the ability of members to provide consulting services was verified and attested to expand in the field of consultancy. at the opposite pole there were the small companies, recently established, which were not part of professional associations and did not know how management consulting should look like. the counter-offensive came along with the establishment of the romanian association of management consultants at beginning of the 1990s, which has strived, or better said, tried to make efforts to define the profession of management consultant and to inform the market and clients about the ways of working with a management consultant. the first normal steps resulted in the successful registration of the occupations of management consultant and ict consultant in the romanian classification of occupations (caen code 7022) [6]. the liberalization of the romanian market meant that more and more management consulting companies started to accommodate in, so it was necessary to implement a procedure of professional attestation according to european standards, which would assess the ethics, the logistics and the know-howof the candidate company [6]. however, these procedures were not mandatory and newcomers did not have to obey all the rules, if they did not want to. in order to professionalize the market, there was borrowed again the american perception on management and was wide spread through all europe the international certification specific to the profession of consultant and trainer in management, that was the cmc, meaning certified 3 management consultant [6], which was worldwide accepted. but the european union wanted more, so they issued an own european standard for management consulting service, through the european committee for standardization. as if it was not sufficient enough, each member state approved its own standard for management consulting, so romania’s liberalized market looked a bit odd, because at the end it has made a shift from a state-centralized economy to a european super state centralized economy. 2.2 the characteristics of romanian management consultancy market, between big international players and local newcomers in the romanian market of management consulting services, the big players started to have a high degree of competitiveness, because, as we said before, they were subsidiaries of large consulting companies in the international environment, they had an extended portfolio of external clients and their employees had a reputation in the consulting profession. but this fact it should not be seen as a negative fact, because most of the international consultancy firms contributed to the early stages of romania’s negotiations and compliances for the accession to the european union. even after this major step, these companies continued to carry out multiple activities, especially in international assistance projects. as it has succeeded to the european market, the first management consulting companies in romania were subsidiaries of american companies such as mckinsey, roland berger, or at kearney [7]. at present, exact figures of the total number of management consulting companies in romania is not known, because most of them have multiple caen codes. in the current period of stabilization of the annual growth of the market of management consulting services in romania, the external companies of profile have the opportunity to develop, as close strategies for entering this market, the opening of a commercial office in romania, the implementation of direct exports, the development of a chain of smaller companies by regions, as well as another form not yet fully exploited: the association or partnership with foreign consulting firms. this model is also applicable in reverse sense, taking into account the case of local consulting firms with smaller financial possibilities, who try to implement strategies of direct / indirect exports of consulting services outside romania. there are also contradictory discussions about the fact that management consulting services would be substitutable. indeed, each consulting firm has a different approach, offers different solutions as a method of application and logic, some services being of higher quality than others. but, even in a narrow field as management consulting, the sub-domains are different, ranging from management, accounting, taxation, insurance, to customs consultancy, therefore they cannot be substituted for each other, but they can be mutually complementary. at the same time, in the field of management consulting, most specialized companies offer services in approximately the same structural branches of a firm (management; financial; human resources; strategies; operations). a threat with substitutes would be the possibility for some companies to set up their own internal consulting departments or their own consultant employees, in this case not needing the services of the consulting companies from the external environment. another case of substitutes is represented by the increasingly common practice of some accountants or lawyers, who, in addition to their specialized services, usually take over the consulting part in management, human resources, financial, fiscal, etc. another case of substitutes is represented by the departments or offices / consultancy divisions within some public administration institutions or banks, which offer clients competitive services. competitive rivalry in the field of management consulting services should not be viewed as an unwanted thing, as an obstacle or as a fact that impedes the development of this sector of activity, but on the contrary, as long as the multinational consulting companies decide to open their offices or consultants on the romanian market, the quality of these services will increase considerably, because these services involve an increasing rate of updating knowledge in 4 management, a vast and continuously developing experience in management processes and strategies and a continuous need for market research. indeed, the profits of the companies may fluctuate, but the demand for consultancy services will not show a high degree of affect, as the romanian managerial culture is still in a stage of development and needs continuous support, with fundamental areas not yet fully exploited (agriculture, health, industry, icts). 2.3 doing business as a management consultant in romania: high consulting fees versus high expectations of clients for romanian clients, it was hard to understand, at the beginning, that management consultancy is a service with results that are more difficult to quantify and sometimes even materialize on paper, especially in the long term. according to some specialists [5], there was also a big gap in the mindset between the providers and beneficiaries of these kind of services, because for the client the fee was interpreted as a global cost, but the consultant does not fully benefit from it, due to the fact that there are other associated costs of the company. to clear up this misunderstanding, in each agreement, regulation or deontological code of the professional associations in a certain branch, it is mentioned that: “the liberal service provider can fix his desired fee and this must be made known to the client, clearly explaining the weight and the size of the component cost elements” [1]. in romania, the most common fee systems are: days-consultant (man-days) and success fee [5]. the man-days pricing system starts from the premise that any consulting activity can be broken down into days worked for the benefit of the client, and the fee is determined by multiplying the number of days worked with the daily fee [1]. the success-fee system tries to correlate the results obtained in the consulting mission with the consultant's fee, but presents some implementation and uses abnormalities [5], in the sense that the effects of a consulting service do not appear immediately after the completion of a consulting mission (or during the course of the mission). romanian consulting firms have not taken any american or european organization model, some of them having permanent consultants in management, other working mostly with collaborators. the same can be said about the specialization of the consultants, most of them having training in the economic field or technical training, and the others in approximate proportions equally, having training either in the legal field or in the field of social sciences. 3 conclusions in the period before the economic recession, management consulting services went through a profitable period on the romanian market, determined by the expansion of large corporations, which could not produce the management competence within the company as quickly as they developed. according to some specialists [7], this type of clients used appealed to management consultants in order to complete their management teams on different projects where they did not have sufficient or specialized resources. in other cases, clients just wanted to confirm certain managerial decisions that had to be implemented without further testing. however, with the economic downturn, the global consulting market contracted and the growth rates for the successive years were very low, therefore, the competition remained high, directly influenced by the contraction of the labor market and the changes in the consumer behavior, in the sense that client companies have not experienced such spectacular growth rates, so they started to cut any unnecessary expenses. limiting the budgets has inevitably led to a reduction of demand for management consulting services. it is necessary to understand that, although the recession has passed, the economic situation of the businesses sector is difficult. romania faces many challenges: each macro-sector of the economy urgently demands the definition and pursuit of clear objectives, and maybe this is the point where management consulting companies should bring decisive options and the ability to plan in the medium and long term, by capitalizing on strengths and opportunities. 5 references [1] finantare.ro, managementul firmelor de consultanță, bucurești, 2009. http://www.finantare.ro/biblioteca/2011/studiu-managementul-firmelor-de-consultanta-finantarero.pdf [2] d.r. mihai, strategii de marketing utilizate pe piața brașoveană a serviciilor de consultanță pentru management, brașov, 2007. https://www.scribd.com/doc/47415897/3 [3] g. pleșoianu, profilul profesional al consultanților în management, ghid practic pentru profesia de consultant în management, bucurești, 2004. http://www.svasta.ro/_upload/biblioteca/documents/ghid_consultant_prof.pdf [4] f.a. popescu, c.b. benea, do european funds consultancy market’ extensions determine romanian economic growth or vice versa?, emerging markets economics and business, no. 5, pp. 110-113, 2017. http://steconomiceuoradea.ro/wp/wp-content/uploads/2014/01/volum_conferinta_doctoranzi_2017.pdf [5] m. svasta, sisteme de onorarii și tarife în consultanță, ghid practic pentru profesia de consultant în management, bucurești, 2004. http://www.svasta.ro/_upload/biblioteca/documents/ghid_consultant_prof.pdf [6] m. svasta, sisteme de atestare/certificare în profesie, ghid practic pentru profesia de consultant în management, bucurești, 2004. http://www.svasta.ro/_upload/biblioteca/documents/ghid_consultant_prof.pdf [7] d. șchipor, tendințe în consultanța de management. http://cursautorizat.ro/blog/management/tendinte-in-consultanta-de-management-2 http://www.finantare.ro/biblioteca/2011/studiu-managementul-firmelor-de-consultanta-finantarero.pdf https://www.scribd.com/doc/47415897/3 http://www.svasta.ro/_upload/biblioteca/documents/ghid_consultant_prof.pdf http://steconomiceuoradea.ro/wp/wp-content/uploads/2014/01/volum_conferinta_doctoranzi_2017.pdf http://www.svasta.ro/_upload/biblioteca/documents/ghid_consultant_prof.pdf http://www.svasta.ro/_upload/biblioteca/documents/ghid_consultant_prof.pdf http://cursautorizat.ro/blog/management/tendinte-in-consultanta-de-management-2 18 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 16 (2022) between covering the basic needs and self-fulfilment jobs – why we need a better eu strategy for employment ana-maria coatu1, 1 faculty of european studies, babeș-bolyai university, cluj-napoca, romania e-mail ana.coatu@ubbcluj.ro abstract: this article tries to present two distinct concepts in relation to labour: basic-needs jobs and self-fulfilment jobs. those two concepts should be taken into account when designing and envisioning eu work strategies. keywords: employment strategies, basic-needs job, self-fulfilment job 1. introduction labour together with capital and resources constitute the primary factors of production. of these, the labour force has the greatest dynamism, on which the accumulation of capital depends most, given that resources are limited. at the level of a country, the level of training of the labour force represents the mirror of economic and social development, respectively it contributes to the economic competitiveness of the country on the international level. thus, investment in the training level of human resources contributes to increasing economic competitiveness from the smallest sme to the largest multinational. in this context, the professional training of young people is the first and most important step toward access to the labour market. the development of practical skills among young people, starting with the preparation of students in order to facilitate the transition from school to the labour market is the basis for having a balanced society, with a low unemployment rate and with a high added value regarding the services and goods that are produced. to be competitive a nation must have highly skilled labour rather than cheap labour. beyond the fact that an unemployment rate as low as possible represents a desire at the level of any nation, access to the labour market represents a desire at an individual level starting from a certain age. at the individual level, access to the labour market does not only provide an income, that is, the person in question can satisfy his primary needs, but can also ensure the need for self-realization. on the opposite pole, the lack of a job can have negative consequences on a psychological and even physical level for the person concerned. thus, facilitating the access of young people to the labour market should be a priority at the government level, as the young people of today are the adults of tomorrow who contribute to the development of society and the retirees of the day after tomorrow who must be supported to enjoy a decent living towards the end of life. restricted/difficult access to the labour market can lead to alienation of the young person from his family or community, which is often associated with drug use, alcohol abuse and the adoption of violent, desperate behaviour [3]. furthermore, the lack of a job can have a negative impact on the level of the young person, to the level of the whole society: low socio-economic and cultural participation, non-involvement in the decision-making process at the political level, there is a risk of drug abuse, alcohol, violence, become on social assistance, may live in squalid conditions, may affect the ability to start a family, as well as future earnings. a young person who is long-term unemployed or who fails to get a job that matches their skills or to keep it for a longer period of time can subsequently become a burden on society [3]. mailto:ana.coatu@ubbcluj.ro 19 2. between basic needs and self-fulfilment jobs a job paid accordingly to professional education and experience is the first step towards financial independence, which is the basis of the transition to adult life and to a fulfilled life, with both material and spiritual satisfaction. also, a young person who has a job that brings him satisfaction can contribute to the society of which he is a part, from participating in the decision-making process to involvement in socio-cultural life and, above all, at an economic level through taxes and the taxes he pays, as well as by the fact that he brings money to the local or national budget, especially in the conditions in which the state has spent on his education and training in many of the eu countries, such as romania. employment and training are interdependent and represent the foundation on which a young person, a family, a community, a society, or a nation develops. therefore, the employment of young people is a complex field and of utmost importance for the development of society and the individual. we believe that having a job, an occupation is located both at the base of maslow's pyramid by providing primary needs: food, a roof, etc., but also at its peak by covering the need for selffulfilment. according to maslow's theory, it makes sense for an employee to place an initial emphasis on satisfying the basic-needs of ensuring security and physiology. a person just starting their job will typically be particularly concerned about physiological demands like appropriate pay and regular income as well as security needs like benefits and a secure workplace. everyone wants to work in a stable atmosphere and earn a respectable wage to support their families. the employees who do not have their basic needs satisfied will choose their jobs based on factors like pay, stability, and safety. additionally, when their lowest-level needs are not supplied or are in danger, employees will resort to meeting those needs (such as during an economic downturn) [2]. what no strategy or plan of action takes into account is the fact that for a young person once he has secured his primary needs, the need for self-actualization, for self-fulfilment, becomes more important, consequently prompting him to seek another job that satisfies this need. thus, at the level of the europe 2020 strategy, we believe that it was not enough to set a target regarding employment, but, above all, regarding the quality of employment. in fact, it is the same mistake that happened with the previous european strategy, the lisbon agenda. we consider that is necessary to establish a delimitation between having a job that pays the bills and a job that is fulfilling. the first type of job we will name basic-needs job and the second one is a self-fulfilment job. by basic-needs job, we mean a job that ensures the fulfilment of primary needs: food, a rooftop etc. and which is usually present early in a person's career. a self-fulfilment job is defined as an occupation that satisfies the highest need in the hierarchy of needs, namely, selfactualization, self-fulfilment, and self-esteem, and occurs later in a person's career, after reaching a certain social status and after having ensured a greater degree of financial independence. however, we consider that the two types of employment can be interspersed during a person's career: at first, he is an employee who covers his basic needs, then he identifies a job that he feels fulfils him, that it offers him certain professional satisfactions (selffulfilment job), but then, due to an economic crisis, for example, he ends up again in the initial situation where he survives from day to day. basic-needs employment, in our view, refers to the situation in which an employee, perhaps because of the economic situation, perhaps because of the low level of education or because they are at the beginning of their professional career or, most of the time, also because of low aspirations career, he manages to cover some of his basic, security and physiological needs, as they are presented in maslow's hierarchy of needs [4]. 20 employment for self-fulfilment, in addition to covering basic needs through the salary, gives to the employee a certain social status as a professional in a certain field, and a certain degree of financial independence the employee manages to save, the salary covers his basic needs, but above all, through this workplace, the employee feels that the daily activities bring him satisfaction, the successes at the workplace are part of his person, define him, and now he can, including, contribute to the development of the community from which is a part (through donations, volunteering or even through the work they do). the employment for self-fulfilment, proposed by us through this article, becomes the aggregator of these desired and the foundation by which the european commission can recommend to member countries to develop measures to encourage the quality, not just the quantity of job creation and development. among the targeted education measures, we propose the development of mandatory career counselling and guidance programs at pre-university and university education levels. a young high school student should be guided in choosing a career path, to understand the advantages and risks of a certain trade/profession, the connection and evolution between the demand and supply of the workforce in that field, as well as the sacrifices they would resort to in order to he gets where he wants to go. a young student should be able to discern between the need to obtain a qualification/ diploma in the field in which he wants to work, the multitude or, on the contrary, the limited fields in which he can work and the need to equip himself not only with fundamental knowledge through studies university but also the compulsion to acquire practical skills through internships or volunteering programs to carry out consistently and with dedication. the key concepts for envisioning better work strategies in the european union are human capital, career counselling, self-fulfilment jobs, personal needs, professional potential, work experience, better matching of skills and competencies, and the need to meet the skills and interests of the employees. the new eu work strategy should focus on the development of abilities and skills of the youth that will enable them to find better jobs, jobs that contribute to their filing of self-fulfilment. a report by eurofound emphasizes that the role of the workplace lies not only in ensuring decent living conditions but above all in offering citizens the right mechanisms to achieve their potential and goals in life. a job is not only a source of income to survive, but offers a certain social status and a role in society to the one who holds it. thus, people who have a job are more satisfied with their lives, resulting in employment being a milestone for development and wellbeing [1]. and in our research conducted to write this article, we have come to the conclusion that what is missing from the theoretical and conceptual research on employment policies, is a breakdown by types of employment beyond a dimensioning of employment by seasonal activities, part-time or full-time, etc. the practical applicability of the two concepts defined earlier lies in the fact that once named and characterized, they can represent the foundation that shows the direction of employment measures. thus, for those who are in the category of the active population, but not employed, the measures should be of a nature to stimulate basicneeds employment, and for those who have a job, measures should be thought through so that they acquire a certain sense of personal accomplishment, that is, measures should be created to stimulate employment for self-fulfilment. it is true that when a nation struggles to provide minimum decent working conditions or when there is fairly high unemployment, the goal of government can only be to provide as many jobs as possible for as many people as possible, to ensure a decent living and to be/ become responsible taxpayers. 3. conclusions the distinction between a basic-needs job and a self-fulfilment job is a complex matter. there are different aspects of them, such as: 21  the situation when a country has a shortage of personnel;  the situation of over-qualified personnel and low-paid jobs;  the situation of inexperienced and unskilled workers at the beginning of their careers who lack formal education as well. and this list can continue. these are just some of the aspects that a new eu work strategy should take into account when defining work measures, directions and priorities. in this article, we have presented some considerations regarding the concepts that we have proposed to the scientific community and that we have tried to define and justify as best we could. references [1] eurofound, the gender employment gap: challenges and solutions, publications office of the european union, luxembourg. research report, 2016, pp. 62-67 [2] how to apply maslow’s theory to the workplace. lower level needs https://managementisajourney.com/motivation-applying-maslows-hierarchy-of-needs-theory/#maslowhow [3] mascherini, massimiliano; ludwinek, anna; ledermaier, stefanie, social inclusion of young people, eurofound, 2015 [4] poston, bob, an exercise in personal exploration: maslow`s hierarchy of needs, 2009 http://www.ast.org/pdf/308.pdf https://managementisajourney.com/motivation-applying-maslows-hierarchy-of-needs-theory/#maslow-how https://managementisajourney.com/motivation-applying-maslows-hierarchy-of-needs-theory/#maslow-how http://www.ast.org/pdf/308.pdf tratamentul contabil al mărfurilor aflate la terţi agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 12 (2018) accounting treatment of operations in public catering services răzvan vonea1 1 agora university of oradea, str. p-ța tineretului, no. 8, oradea, romania e-mail vonea_razvan@yahoo.com abstract the existing article proposes to bring to light the organization and management approach in conducting the accounting in the food service businesses. i first introduced a short abstract presentation of the food service structure types in the romanian legislation. i also established an intrinsic relationship between the hotel and hospitality industries as components of the touristic phenomenon exponentially developed worldwide in the last decades. i proposed some accounting cases concerning the accounting entries of different operations referring to the food service business. keywords: food service, restaurant, inventory items, retail price, menus, server / waiter / waitress, raw materials, individual producers / manufacturers 1.introduction tourism, as an important component of the tertiary sector, has established itself exponentially in social and economic life, through a significant expansion especially in the second half of the last century. the source of this relevant progress is the general economic growth, associated with the increase in leisure time and paid leave, increased long-term income, but especially the expansion of transport factors that have made travel more frequent, fast, comfortable and accessible. more and more countries are beginning to enjoy the economic benefits generated by tourism: new jobs are being created, new untapped resources are being found, the balance of external payments is being balanced, infrastructure is improving a favorable macroeconomic situation. as for cultural values, through tourism states share their national identity, creating added value to their international image. in the period between 1950-1977, the world population increased 2.5 times, and the number of arrivals in international tourism multiplied more than 20 times compared to 1950, when there were only 25 million arrivals, it follows a growth rate 10 times faster. the growth trend of international tourism from 1950 to the present is maintained, but there is also a marked slowdown as follows: the average growth rate over the four decades continues to decline from 11.7% in 1950-1959 to 8.3% in 1960-1969 to 6.1% in 1970-1979, to reach 4.0% in 1980-19891. given this global trend, accommodation and catering services are the basic services of a tourist program. the interdependent relationship between public catering and tourism is obvious, as they are concentrated in an independent sector of economic activity, called the hotel industry. according to the methodological norms and classification criteria, the following types of tourist reception structures with public catering functions can operate in romania2: 1. restaurant profile ✓ classic; ✓ specialized: fishing, hunting, rotisserie, zahana, dietetic, lacto-vegetarian, family / pension;with specific: winery, with local specifics, with national specifics; ✓ with artistic program; ✓ brasserie or bistro; ✓ brewery; ✓ summer garden; 1 stănciulescu, g., tehnica operaţiunilor de turism, editura all, bucureşti, 1998, p. 2 2 ordinul ant nr. 65/2013, publicat în mo partea i, nr. 353 bis/14.06.2013 mailto:vonea_razvan@yahoo.com 2 ✓ terrace; 2. bar profile ✓ nightclub; ✓ day bar; ✓ cafe-bar or cafe; ✓ club or disco-bar; ✓ bufet-bar; 3. fast-food profile ✓ self-service restaurant; ✓ express buffet; ✓ pizzeria; ✓ snack-bar; 4. cake shop 5. pastry, pie, simigerie regardless of the form in which these structures with public catering functions are organized, this is in fact also a form of retail trade, characterized by the intervention of the human factor engaged in the preparation of the purchased materials. the organization and management of the accounting of public catering units must take into account certain inherent aspects of the specifics of this activity, such as: a. the preparation of the menus is done, in general, without permanent storage of materials and materials; b. changing / updating / adding new menus or the structure of the dishes made; c. the demand for public alimentation products is variable and varies according to different parameters: seasonality, schedule, days of the week, periods of celebration, holidays and vacations, etc.; d. the need to schedule as accurately as possible the quantity of products to be prepared and prepared for the next day; e. the need to respect the validity period of the public alimentation products prepared and not sold on the same day, because their commercialization term is limited, according to the sanitary legislation; f. the determination of the production costs of the public alimentation products carries a special regime, including the acquisition cost of the purchased materials and other expenses related to the food preparation, their preparation, according to some recipes approved at unit level. 2. case studies 2.1. case study no. 1: niculina restaurant sends an employee to the agri-food market in order to buy vegetables from individual producers. for this purpose, the company grants him an advance for travel in the amount of 300 lei, cash, according to the payment order no. 26 / 15.1.2020. it is bought from individual producers: potatoes, celery, carrots, parsley, horseradish, worth 284 lei, according to the marketing book no. 224 / 01.15.2020. the equivalent value of the vegetables purchased in cash is paid according to the payment order no. 28 / 15.1.2020. the remaining unspent cash difference is deposited at the cashier. a. granting the advance for travel to the agri-food market: 542 „cash advances” = 5311 „cash in ron” 300 according to the payment order no. 26/15.01.2020 b. purchase of goods for processing at the restaurant: 371 „goods” = 462 „various creditors” 284 according to the marketing book no. 224/15.01.2020 3 c. payment of the value of the goods purchased to the individual producer: 462 „various creditors” = 5311 „cash in ron” 142 according to the payment order no. 28/15.01.2020 d. payment of the value of the goods purchased to the individual producer: 5311 „cash in ron” = 542 „cash advances” 16 according to the payment order no. 29/15.01.2020 observation: we opted for the registration of the purchased goods in order to process them in the public catering process, treating them as goods, the accounting records being kept at the acquisition cost, the discharge being also carried out. sales in public catering through the cash register are reflected in the selling price that generates income from sales of goods. 2.2. case study no. 2 raluca restaurant buys from the supplier deep plates, flat plates, cutlery for its own kitchen, in a total value of 700 lei, 19% vat, according to the fiscal invoice no. 1414 / 15.01.2020. the payment of the debt to the supplier is made by promissory note. the dishes thus purchased are put into use. a. purchase of dishes for the restaurant kitchen: % = 401 „providers” 833 303 „inventory items” 700 4426 „deductible vat” 133 according to the invoice no. 1414/15.01.2020 b. purchase of dishes for the restaurant kitchen: 401 „providers” = 403 „payment effects” 833 according to the promissory note no. 125 c. off-balance sheet recording of inventory items: d 8035 „stocks of the nature of inventory items 700 given in use” according to the inventory item record sheet d. commissioning of purchased inventory items: 603 „expenses with materials of = 303 „materials of the nature 700 the nature of inventory objects” of inventory objects” according to the consumption receipt no. 30/15.01.2020 2.3. case study no. 3 at the end of a day, the diana restaurant records sales from serving meals in a total value of 1570 lei, of which 355 lei collected through pos, and the rest in cash. at the end of the day, the waiters hand over the amount of 1215 lei from the sale of the goods. the management of sold goods is downloaded, at a purchase cost of 720 lei. during the day, cracks of plates, glasses, ashtrays are registered, valued at 25 lei, amount recovered from the waiters. a. recording sales from catering: 4111 „clients” = % 1570 707 „income from sale of goods” 1495,24 4427 „collected vat” 74,76 according to the fiscal report z no. 155/20.01.2020 4 b. cash collection of sales / delivery by the waiters of the cash collected: 5311 „cash in ron” = 4111 „clients” 1215 according to the fiscal report z no. 155/20.01.2020, monetary no. 190/20.01.2020 c. pos collection of sales: 5121 „bank accounts in ron” = 4111 „clients” 355 according to settlement characteristics:  the amounts collected by the waiters through the credit card representing the equivalent value of the customers' consumption appear in the daily fiscal report of the restaurant;  the amounts collected from customers through credit cards are not entered in the cash register;  no invoice is issued for the amounts collected by credit cards. d. discharge with the goods sold: 607 „expenditure on goods” = 371 „goods” 720 according to the accounting note no. 20/20.01.2020 and recipes in the specific program observation: the discharge is made at the cost of purchasing the goods, through computer software in which all the entries of goods are entered (purchases of goods from individual suppliers or producers) and based on the existing recipes in these software the discharge is performed at acquisition cost. e. record breaks at the end of the day: 5311 „cash in ron” = 4281 „other staff debts” 25 according to the collection order no. 15/20.01.2020 observation: in order to have analytical records on each waiter, account 4281 can be developed on analytical accounts, on each waiter. 3. conclusions we conclude the specifics of public catering accounting by the fact that the goods purchased within these units can be treated as goods, being goods that are resold after a prior processing; the processing can consist either in alcoholic beverages that are sold in the form of coffee, cocktails, other specific alcoholic and non-alcoholic beverage preparations, or in the kitchen where the purchased goods are processed and become culinary preparations. references [1] deaconu, s. c., particularităţi ale contabilităţii entităţilor, editura c.h. beck, bucureşti, 2012; [2] draica, c., ghid practic de turism intern şi internaţional, editura all beck, bucureşti, 1999; [3] robu, m., contabilitate în comerţ şi turism, editura universităţii suceava, 1999; [4] stănciulescu, g., tehnica operaţiunilor de turism, editura all, bucureşti, 1998; [5] omfp nr. 1802/29.12.2014 pentru aprobarea reglementărilor contabile privind situațiile financiare anuale individuale și situațiile financiare anuale consolidate; [6] ordin ant nr. 65/2013; [7] legea nr. 227/2015 privind codul fiscal cu modificările şi completările ulterioare. 22 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 16 (2022) the role of learning orientation in the context of sustainable human resources development valentina-simona pașcalău1, ramona-mihaela urziceanu2 1 doctoral school of economics and business administration, west university of timișoara, romania e-mail valentina.pascalau73@e-uvt.ro 2 faculty of economic sciences, agora university of oradea, oradea, romania e-mail ramona.urziceanu@gmail.com abstract the belief that learning and innovation are important to flourish in competitive and dynamic situations has sparked an increase in interest in the learning process within the organization during the past two decades. the actions that the entire company engages in to generate and apply knowledge to gain a competitive advantage are included in a firm's learning orientation. keywords: learning orientation, human resource, sustainable human resource development, 1. introduction the firm's learning orientation affects the sort of information gathered as well as how it is assessed, understood, and disseminated (stelmaszczyk, 2020). the company's orientation towards learning is closely related to the sustainable development of human resources, respectively to the permanent education of adults. adult education is, in its content, development through activity, through action, through experimentation, where exercise occupies a prominent place. hence the idea to learn by doing present in modern works on the sustainable development of human resources. in this context, knowledge, skills, and new skills are, to a large extent, the result of the production of the subject of education (the adult) and not simple records of external events. here the very important substitution operation is present in relation to the expository method, for example. thus, expression is substituted for impression, the production of reception, the externalization of ideation and the invention of understanding. impression, reception, ideation and understanding are also present, but they are surpassed and therefore assimilated to production and innovation, expression and externalization. 2. the role of learning orientation according to argyris and schon (1996), fiol and lyles (1985), nonaka and takeuchi (1995), organizational learning is the process through which additional information and knowledge are received by comprehending some approaches and practices for enhancing performance. the development of managerial skills and technological expertise required to compete in a global market is thus made possible by organizational learning. as a result, managers can update their knowledge base faster than their rivals, maintaining a long-term competitive advantage while responding to uncertainties and external developments (harrison and leitch 2005, santos-vijande et al. 2012). learning orientation has an important role in the field of human resources because it facilitates the acquisition and use of knowledge (bature et al. 2018). motivation is considered one of the most important factors that underlie the achievement of a goal, and learning orientation, as an impetus and sustained involvement in the accomplishment mailto:valentina.pascalau73@e-uvt.ro mailto:ramona.urziceanu@gmail.com 23 of tasks, is the result of a complex of factors, including social and cultural factors, beliefs and personal values and contextual factors, specific to a learning situation (liao et al. 2017). social and cultural factors exist at the level of norms, values and learning styles that exist in the cultural endowment of a company. the differences between cultures are found at the level of: the types of interaction they encourage in the learning activity (cooperation and competition), the partnerships for survival (in some, survival refers to the acquisition of well-founded knowledge, in others to the development of knowledge) and the learning resources are ensured through use of organizational tools in these companies (baker et al. 2022).intellectual factors influence the learning orientation, whether it is the acquisition of competence in the field, or just the achievement of a specific performances. according to vega martinez et al. (2020) among these factors are: the type of learning tasks (applicative tasks and those related to current activities are more attractive than decontextualized ones and facilitate the orientation towards the acquisition of skills and not only towards obtaining a particular performance), the authority relationship in the company (autonomy in learning determines an intrinsic motivation and a positive perception of one's own learning skills), the formal and informal use of rewards (rewarding competence has a strong motivational role in the long term), the evaluation modality (the competence orientation within formative assessments determines an orientation of superior learning versus performance orientation), the time allocated to a learning period (too short a period of time tends to demotivate employees), the way of grouping employees (a rigid grouping of skills can have serious consequences in terms of performance and learning orientation it has). it is important for organizations and especially the hr department to understand the different types of learning orientations in order to create effective training strategies that take into account the individual needs of employees. by understanding the different types of learning orientations, organizations can create individualized training programs that will help employees learn more active and effectively, leading to improved organizational performance. work used to be the most obvious and important place where learning occurred. but, technical-scientific and technological development has made education through professional experience ineffective. nowadays, a long period of formal training is required to be able to practice a job at a high level, while the job opportunities for the unskilled are fewer and fewer. proponents of the sustainable development of human resources affirm the need to develop a program that cultivates personal initiative in view of permanent development and self-improvement. there are a number of very important additional factors, among which we mention: the provision of self-assessment tools; self-assessment possibilities; establishing an organizational climate favorable to creativity; knowledge of work incentive projects that promote solutions applicable directly in production to certain problems; interaction in the peer group, in order to promote the exchange of ideas and information. 3. conclusions and proposals in conclusion, learning orientation, lifelong education or sustainable human resource development should create the framework to provide the necessary inspiration, stimulate creativity, guide people to critical thinking, to cooperation, in order to solve complex problems, real. therefore, for a sustainable development we need education, first of all to educate ourselves and then those around us, there are always new things that deserve to be explored and, why not, efficiently exploited. 24 also, for sustainable human resource development, organizations should become more adept at generative learning, be able to predict environmental and market changes, and respond appropriately when necessary. innovation and performance within a company largely depends on its orientation to learning. to understand and interpret new market information and technical advances from the external environment, organizations need competent people. employees of an organization must be able to process information quickly as well as learn new things faster than their competitors. references [1] argyris, c., schon, d. a. ,(1996) , organizational learning ii, addison-wesley creative education, vol. 36 issue: 1, pp. 107-109. [2] baker, w.e., mukherjee, d., & perin g., m. (2022). learning orientation and competitive advantage: a critical synthesis and future directions. journal of business research, 144, 863–873. [3] bature, s. w., sallehuddin, r. m., & hin, c. w. (2018). learning orientation, access to debt finance, organizational capability and performance of small and medium enterprises: a proposed model. academy of accounting & financial studies journal, 22(3), 1–11. [4] fiol, c.m. & lyles, m.a. (1985). organizational learning. academy of management review, 10, 803–813. [5] harrison, r.t. &leitch, c.m. ,(2000), learning and organization in the knowledge–based information economy: initial findings from a participatory action research case study, british journal of management, 11(2), pp. 103 – 119. [6] liao, s., chen, c. c., hu, d., chung, y. c., & liu, c. l. (2017). assessing the influence of leadership style, organizational learning and organizational innovation. leadership & organization develop¬ment journal, 38(5), 590–609. [7] nonaka, i. &takeuchi, h., (1995), the knowledge-creating company how japanese companies create the dynamics of innovation, oxford university press, new york. [8] santos-vijande, m. l., lopez-sanchez, j. a., & trespalacios, j. a., (2012), how organizational learning affects a firm's flexibility, competitive strategy, and performance, journal of business research, 65(8), 1079– 108 [9] stelmaszczyk, m. (2020). how absorptive capacity and organisational learning orientation interact to enable innovation capability? an empirical examination. entrepreneurial business and economics review, 8 (1), 7-32. [10] vega martinez, j. e., martinez serna, m. c., & montoya, n. p. (2020). dimensions of learning orientation and its impact on organizational performance and competitiveness in sme's. journal of business economics and management, 21 (2), 395-420. agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 102-107 102 the vuca concept in the digital sphere s.-v. pașcalău simona-valentina pașcalău faculty of economic sciences, agora university of oradea, romania e-mail: psimona0509@gmail.com ___________________________________________________________________________ abstract. the article's main goal is to explain the idea of vuca in detail and show how it may affect digital marketing efforts. the article's goal is to give those interested skills and strategies to deal with the difficulties and uncertainties in a constantly evolving digital world by examining the idea of vuca in the context of digital marketing. it will examine how decision-making in digital marketing can be influenced by elements including volatility, uncertainty, complexity, and ambiguity and how these factors can be effectively controlled. the article's main objective is to inform about the significance and influence of the vuca concept in the digital sphere and to offer helpful advice for adjusting to and thriving in a digital marketing environment. keywords: volatility, uncertainty, complexity, ambiguity, digital marketing, strategies introduction systematic cost reduction, creating an agile operating model, mastering collaboration, developing future-ready capabilities, being aware of the use of digitalization, measuring impact and sustainable value, and the courage to innovate and transform in the right way are the characteristics that sustainable business should embody. these necessities fluctuate across various industries and sizes of businesses. the frameworks, information, presumptions, interests, and expectations used by managers in big, medium, and small businesses to make choices are all evolving quickly. managers must make judgments with more ambiguity due to the vuca reality. businesses must learn to navigate and manage their plans in a vuca-influenced environment if they want to first survive and then develop. businesses will survive and thrive in the face of a variety of growing unfavorable and intensely competitive business conditions if they recognize and take advantage of the opportunities and possibilities for change in vuca market conditions. therefore, it gets difficult for the top executives of organizations to consider fresher concepts for sustainability and expansion in the unusual circumstance. vuca is an acronym that stands for volatility, uncertainty, complexity and ambiguity. the term was originally used in the military context to describe the rapidly changing and uncertain combat environment, but was later adopted in business and leadership to illustrate today's global business environment ( whiteman, 1998) . these four factors create a powerful cocktail that can lead to market volatility and unpredictable results. it is a measure of how risky a financial market is and how quickly it can change. each of these factors can create a significant change in the price of an asset. for example, volatility refers to how much a security's price fluctuates throughout the day. uncertainty refers to the lack of clarity about future events and how they might affect the price mailto:psimona0509@gmail.com simona-valentina pașcalău 103 of an asset. complexity measures how many possible outcomes there are for a given situation, and ambiguity is the presence of many different interpretations of a situation (gerras, 2010). here is a more detailed explanation of each component of the vuca acronym: volatility: refers to the rapid pace of change and instability that characterizes today's business environment. factors such as economic fluctuations, technological innovations, political and social changes can generate volatility in an unpredictable and rapid manner. uncertainty: this refers to the lack of accurate information and knowledge to make correct and predictable decisions. the vuca business environment is often characterized by ambiguity, uncertainty and a multitude of unknown factors that can affect the results and direction of organizations. complexity: describes the interconnectedness and diversity of factors and relationships that influence the business environment. organizations face complex systems of interactions, unpredictability and multiple challenges such as technological change, regulation, cultural diversity and global competition. ambiguity: this refers to the lack of clarity and interpretation in the business environment. information may be incomplete, contradictory or difficult to understand, making decisionmaking more difficult. the consequences of actions can be uncertain and the results can be interpreted in many ways. the abbreviation vuca stands for a volatile, unpredictable, complex, and ambiguous environment in the area of digital marketing. the phrase was first employed in a military context before being modified to reflect the commercial climate and the quick changes occurring in the digital economy (bennett & lemoine, 2014). therefore, in digital marketing the acronym vuca is interpreted as (hall & rowland, 2016): volatility: the digital environment is quite unstable and changes very quickly. rapid changes in consumer preferences, trends and technologies require continuous adaptation of the marketing strategy. uncertainty: the outcomes and effects of campaigns are frequently highly unpredictable in digital marketing. search engines and social networking sites' algorithms and platforms are subject to unforeseen changes, and it can be challenging to forecast customer behavior. complexity: there are many different channels, technology, and techniques used in digital marketing. it can be difficult for marketers to manage the complexity of this digital environment and incorporate these into a coherent plan. ambiguity: information in digital marketing is frequently ambiguous or inconsistent. as there are many variables and circumstances that might affect results, interpreting data and assessing the efficiency of campaigns can be quite ambiguous. organizations and executives must learn specialized skills to deal with the vuca environment's rapid changes and unpredictability. these abilities include flexibility, agility, ongoing education, strategic thinking, and the capacity for making choices in the face of ambiguity (xing et al., 2020). in general, in digital marketing the concept of vuca emphasizes the need for adaptability and the ability to act quickly in response to changes in the sector. to react to new digital trends and opportunities, companies need to be proactive in managing uncertainty and develop flexible marketing strategies to adapt to new digital trends and opportunities (tsui & dragicevic, 2018). the vuca concept in the digital sphere 104 future research on vuca in other knowledge areas regarding the vuca concept, there may be new research opportunities related to the different fields of knowledge, such as: management, strategic management, human resources, management managing circumstances where uncertainty and turbulence are key components requires the development of specific talents. the characteristics of a leader must be redefined. given the difficulty of developing a future perspective based on present information, skills such as vision, which have been crucial until now, are less useful in the context of vuca. according to schoemaker et al. (2018), adaptability is a crucial component of research. the emergence of adaptive leadership has been a recurring theme in the research. strategic management the investigation and exploitation of techniques must be well balanced in the ambidexterity literature. in the face of an uncertain world, aspects of adaptation and foresight take on significantly greater significance (o'reilly & tushman, 2008). the speed of response should be seen as a key component, with a direct impact on the organizational development and human resources (hr) of the company. due to the more relative nature of the value of information learned from the environment, higher doses of intuition are required (robinson et al., 2017). in addition to adaptation and flexibility, appropriate risk management at organizational, group and individual levels must be taken into account (getele et al., 2019). to address them as fast as possible and lessen their consequences, it is important to identify the predecessors of a vuca element within an organization (codreanu, 2016; heinonen et al., 2017). organizational development is one of the aspects of this vuca reality to which the management of the firm must give the most attention because it is essential to the proper evolution of the business. human resources issues like the selection of staff are particularly pertinent at the moment because of the features of the contemporary environment. their requirements must be viewed through a vuca lens since being able to adjust to environmental changes is crucial. although factors like dedication and the capacity for teamwork must always be taken into consideration, given the unique features of the setting, they now take on a key role. to be able to give firm managers sound decision-making tools, the management of the flow of knowledge between departments must be effective and transparent. new skills are required in this emerging reality, and the hr department must put them into practice based on effectiveness and adaptability. the environment's features and the field's growth and effectiveness are closely related, therefore it is important to model a work team's dynamics appropriately to foresee needs (mathieu et al., 2014). similar to how new jobs necessitate new profiles, human resource departments have difficulties in this area (reichel & mayrhofer, 2009). given that they are essential resources for developing dynamic capabilities, they also involve the development of individual skills as a component of change within the organization (kamprath & mietzner, 2015). as a result, there is particular interest in the creation of suitable technologies to aid management teams in tackling vuca difficulties. organisational development precision and agility are required to react quickly in a chaotic and changing environment. it is crucial to properly manage the company's own expertise and transfer it to all relevant departments.the hr division must play a major role in helping the organization develop these competencies.it is crucial that the organization's simona-valentina pașcalău 105 demands are communicated, as well as its capacity to respond appropriately to the environment. all of this has to have the management team for the company's active support. education and learning an unfamiliar setting necessitates learning new information, and executive training is a sector that is continuously changing. to manage such an environment, where unpredictability and instability play a particularly prominent role, it is necessary to have specialized abilities. given this reality, new teaching concepts are emerging to close these gaps. these concepts include the curriculum development of the new generation of tmt components and the adaptation of vuca teaching to give educational institutions specialized tools to help them tackle the contemporary problems. creativity and innovation, with an emphasis on both leadership and management, stand out among the emerging leadership talents as essential components. conclusions from this vantage point, a wide range of pertinent topics could be the subject of study in the near future. these include innovation and entrepreneurship, which have long been influenced by this shifting environment and are directly related to innovation and performance improvement in businesses operating in unstable environments (yasir et al., 2017). last but not least, management and leadership find training to be a very fascinating discipline (orphanos & orr, 2014). we can also make observations about other fields of knowledge that, despite their importance, have received little to no research, such as the changes in b2b and market relations that are occurring as a result of the introduction of new technologies and their implications for e-commerce (iyer et al., 2009). a key component of effective business management is the creation of control and management systems for customer connections (bonnemaizon et al., 2007). public administrations and their performance in the vuca environment, as well as the development of citizen engagement in a more dynamic environment and its ramifications (stivers et al., 2018), as well as the field of complexity management constitute a distinct field. the company environment, in particular, and reality in general are both determined by the vuca context. it is notably gaining ground in the fields of strategic management, leadership, human resources, and education and learning. businesses need to respond to this new reality with stronger guarantees. as a result, this gives a chance for the scientific community to gain a deeper understanding of the direction that business management is taking. this literature analysis has revealed the need to reconsider several aspects of leadership and innovation in its numerous parts, which has ramifications for managers. leadership in a vuca environment must be supported by the organization's excellent adaptability. in this perspective, hr departments should emphasize promoting the ongoing acquisition of new skills related to environmental adaptation and resource flexibility. structures that are far more adaptable and flexible should also be implemented to promote organizational learning. the vuca concept in the digital sphere 106 references 1. bennett, n., & lemoine, g. j. 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(2015). the impact of sectoral changes on individual competences: a reflectivescenario-based approach in the creative industries. technological forecasting and social change, 95, 252–275 10. mathieu, j. e. et al., (2014). a review and integration of teamcomposition models: moving toward a dynamic and temporal framework. journal of management, 40(1),130-160. 11. o’reilly, c. a., & tushman, m. l. (2008). ambidexterity as a dynamic capability: resolving the innovator’s dilemma. research in organizational behavior, 28, 185–206. 12. orphanos, s., & orr, m. t. (2014). learning leadership matters:the influence of innovative school leadership preparation on teachers’ experiences and outcomes. educational management administration &leadership, 42(5), 680–700 . 13. reichel, a., & mayrhofer, w. (2009). the end of personnel? managing human resources in turbulent environments. management revu, 20(1), 5–14. 14. robinson et al., (2017) . more dynamic than you think: hidden aspects of decisionmaking. administrative sciences, 7(3), 23. 15. schoemaker, p. j. h., heaton, s., & teece, d. (2018). innovation, dynamic capabilities, and leadership. california management review, 61(1), 15–42. 16. stivers et al., (2018). the question of participation: toward authentic public participation in public administration. democracy, bureaucracy, and the study of administration, 58(4),301–323 . 17. tsui, e., & dragicevic, n. (2018). use of scenario development and personal learning environment and networks(ple&n) to support curriculum co-creation. management and marketing, 13(2), 848–858. simona-valentina pașcalău 107 18. whiteman, w. e. (1998). training and educating army officers for the 21st cenctury: implications for the united states military academy. usawc strategy research project, 32. 19. xing et al., (2020). entrepreneurial team and strategic agility: a conceptual framework and research agenda. human resource management review, 30(1), 100696. 20. yasir et al., (2017). entrepreneurial knowledge and start-up behavior in a turbulent environment. journal of management development, 36(9), 1149–1159. situatii financiare consolidate agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol 11 (2017) consolidated financial statements elements of the management decision to invest cristina ioana antik 1 1 agora university of oradea, tineretului square str., no. 8, oradea, romania e-mail antikcristina@yahoo.com abstract the objective of the consolidated financial statements is to present the financial position, performance and evolution of the financial position in relation to the units included in the group of companies, as if it were a single company. the subject of consolidation is the companies within the group, and the object of consolidation is their annual financial statements. consolidation of financial statements is a technique of engineering financial accounting, which aims to produce information necessary for external users. it is also a management tool, as it allows to clarify the complex relations between subsidiaries and the parent company and to compare the results obtained with the set objectives. keywords: consolidated, financial, statements, management, decision, investment. 1 introduction in the economic life of different countries there are both economic agents who carry out their activity as independent legal entities and groups of companies linked to each other from an economic and financial point of view, under the control or influence of one of them. groups of societies are an increasingly important reality in the contemporary world. the group of companies represents the ensemble made up of two or more companies, each with its own legal personality, but which are subject to a unitary economic direction assumed by one or more of them. the companies within the group, having legal personality, each prepare consolidated financial statements according to the specific regulations established by each country. the information provided by the individual annual financial statements of the component companies of the group is insufficient and irrelevant, as they do not allow a correct assessment of the economic-financial situation of the group. the individual financial statements do not reflect the joint activity of the various group companies. the consolidated financial statements of the group are not equal to the sum of the annual financial statements of the group companies, as there may be internal transactions between the group companies. these operations artificially increase the values of individual accounts. the elimination of these operations is not limited to the simple addition of individual accounts. the need for consolidated financial statements is obvious, they give a more comprehensive picture of the real situation of a group, an image that can not give all the balance sheets of the component companies, they allow the global expression of the financial situation and the result of the group. the consolidated financial statements ensure the aggregation of assets, liabilities and equity, as well as income and expenses to provide a global and accurate picture of the group of companies. for a group of companies, whether operating at national, regional or global level, benefiting from the information provided through the consolidated financial statements is a real and solid basis for substantiating investment decisions, strategic decisions and, last but not least, executive management decisions. an investment decision based on mailto:antikcristina@yahoo.com 2 viable, comparable, consolidated and real accounting information is subject to a high degree of success. 2 the purpose and content of the consolidated financial statements in a modern accounting framework, the purpose of the consolidated financial statements is to provide a structured financial representation of the financial position and transactions of the group. consolidated financial statements must provide information about the financial position, performance and cash flows of an enterprise, information that must be useful to a wide range of users in making their economic decisions [1]. to achieve this goal, the consolidated financial statements must provide information to enable users to make forecasts of future cash flows, in particular regarding their maturity and probability. in this regard, the information aims to: group-controlled assets, ie resources generating future cash flows; group debts, ie external liabilities that must be at the origin of payments; equity, as residual interest of the owners in the assets controlled by the group; the result of the group and, in a broader sense, its economic performance, rendered by reflecting the evolution of equity, evolution from which are excluded the effects of operations performed directly with the owners; past cash flows, which can be the basis for determining future cash flows. this information must enable account users to specify the ability of the undertaking concerned to pay dividends, interest and, in general, to pay its debts on time. in accordance with ias 1 presentation of financial statements, a complete set of financial statements includes the following components: 1. balance sheet 2. income statement 3. a situation showing: a. either all changes in equity (all changes in equity); b. either changes in equity, except for those arising from capital transactions with owners and distributions in their favor (changes in equity than those arising from capital transactions with owners and distributions to owners); c. cash flow statement; d. accounting policies and explanatory notes. according to omfp 3055/2009, the consolidated financial statements include the consolidated balance sheet, the consolidated profit and loss account and the explanatory notes to the consolidated financial statements. these documents constitute a unitary whole [2]. the consolidated financial statements provide a true and fair view of the assets, liabilities, financial position and profit or loss of the companies included in these financial statements as a whole. beyond these financial statements, companies are encouraged to provide critical management views, by describing and explaining the main features of financial performance and financial position, as well as the main uncertainties they face. such a report must include: the main factors and influences that determine performance, including the environmental changes in which the entity operates, its response to such changes and effects, its investment policy to maintain and increase the performance from which, distinctly, the dividend policy should be presented; the sources of financing used by the entity, its borrowing rate policy and its risk management policies; 3 the solidity of the entity and its resources, elements whose value expression is not reflected in the balance sheet, in accordance with the international accounting reference. 2.1 the consolidated balance sheet in accordance with the international standard ias 1, the structure and content of the balance sheet must distinguish between current and non-current items. when such a distinction is not made, assets and liabilities are, in principle, classified according to their liquidity and their exigibility. regardless of the presentation, the group mentions, in the consolidated financial statements, the under-one-year portion of assets and liabilities for all items that are likely to contain both short-term and long-term items. overall, this standard (ias 1) refers to the items that must be disclosed in the balance sheet: property, plant and equipment; intangible assets; financial assets (excluding equity investments, customer and operating receivables, cash and cash equivalents; equity investments; inventories; customers and other operating receivables; cash and cash equivalents; suppliers and other operating liabilities; tax liabilities and assets, provisions, noncurrent interest-bearing liabilities, minority interests, issued capital and reserves. according to omfp 1802/2014, the assets and liabilities of the entities included in the consolidation are fully incorporated in the consolidated balance sheet, by summing up similar elements [2]. 2.1.1 current and non-current assets current balance sheet assets include: items intended to be made or held for sale or consumption within the normal operating cycle of the enterprise; or items intended mainly for trading on different markets; or items held in a short-term perspective, the entity (group) expecting to achieve them within a maximum of one year from the end of the year; or liquidity or liquidity equivalents, if their use is not restricted. the other assets are considered non-current items. they include both tangible and intangible assets, as well as long-term operating and financial assets. current assets refer, in particular, to inventories and receivables, which are sold, consumed or realized in the normal operating cycle, even when they are not expected to be realized in the next 12 months after the end of the year. both omfp 3055/2009 for the approval of the accounting regulations compliant with european directives and order 2239/2011 which were subsequently repealed by order 1802/2014 (the latter coming into force on january 2015) [2] show that stocks can be presented as a single item in the consolidated annual financial statements, if there are special circumstances that could lead to unjustified expenses. securities traded on the markets are current assets, if they are expected to be realized in the next 12 months following the end of the year, otherwise they are considered non-current assets. order 1802/2014 specifies that the book values of the shares in the capital of the entities included in the consolidation are offset by the proportion they represent in the capital and reserves of these entities, as follows: a) offsets are made on the basis of the book values of the identifiable assets and liabilities at the acquisition date of the shares or, if the acquisition takes place in two or more stages, at the date when the entity became a subsidiary. the acquisition date is the date on which control over the net assets or operations of the acquired entity is effectively transferred to the acquirer. 4 b) in the conditions in which the values provided in letter a) cannot be established, the compensation is made on the basis of the accounting values existing on the date when the entities concerned are included in the consolidation for the first time. the differences resulting from such offsets are presented as a separate item in the consolidated balance sheet, as follows: the positive difference is presented under the item "positive goodwill"; the negative difference is presented in the item "negative goodwill". these elements, the methods used and any significant changes from the previous financial year must be explained in the explanatory notes to the consolidated annual financial statements. the amount attributable to the shares in the subsidiaries included in the consolidation, held by persons other than the entities included in the consolidation, is presented separately in the consolidated balance sheet, under the item "minority interests". minority interests must be presented in the consolidated balance sheet in equity, separately from the parent company's equity. 2.1.2 current and non-current debts a debt is a current element of the external liability when it is to be repaid: either within the normal operating cycle; either at a maturity within the next 12 months following the end of the financial year. some current liabilities, such as trade payables, those related to employee relations or other operating costs, are part of the working capital requirement used in the normal operating cycle. such items, as in the case of assets, are classified in the current category, even if they must be repaid over a period of more than one year. there are also cases where some current debts are not repaid within the normal operating cycle, but must be settled within the next 12 months, following the year-end date. for example, the short-term part of mediumand long-term loans, dividends paid, taxes on benefits payable, other non-commercial creditors. interest-bearing debts, which generate a long-term financing of working capital requirements, are non-current elements of debts, for their part due at a date of more than one year. an enterprise must classify its long-term interest-bearing liabilities as non-current liabilities, even if they must be settled within the next 12 months following the end of the financial year, if [3]: these are debts that, at the time of their contracting, were long-term debts; the entity in question intends to refinance these debts through a long-term debt; this intention is confirmed by the existence of a refinancing or rescheduling contract, concluded before the financial statements were approved. an analysis of the consolidated balance sheet allows us to make the following assessments: within the balance sheet items of assets, respectively equity and debts, the following items specific to the consolidated accounts are presented: goodwill (positive acquisition difference), equity investments, minority interests; the consolidated equity consists of: the share capital of the parent company, the consolidated reserves (the reserves of the parent company to which is added its share of the reserves obtained by the consolidated companies after the acquisition of the securities) and the accumulated accumulated profits or losses ( the accumulated profits or losses of the parent company to which is added its share of the profits or losses accumulated by the consolidated companies after the acquisition of the securities); the differences generated by the conversion of the accounts of the foreign subsidiaries based on the closing rate method must be included in the category of consolidated equity; the balance sheet is presented after the distribution of the result. 5 2.2 the consolidated profit and loss account in accordance with ias 1, the income statement must disclose at least the following items: income; financial expenses; the share in the result of the affiliated entities and of the joint ventures put in equivalence; the pre tax gain or loss recognized on the sale of assets or the settlement of obligations relating to discontinued operations; income tax; gain or loss after tax, found on discontinued operations; the result of the exercise. also, some items will be presented in the profit and loss account as profit or loss allocations. these are the profit or loss attributable to minority interests and the profit or loss attributable to the capital holders of the parent company. a group must present in its profit and loss account or in the explanatory notes a classification of expenses by nature or by function. however, ias1 encourages entities to use such an analysis directly in the income statement. the analysis by function of expenses, called the sales cost method, requires the allocation of expenses on three functions, as part of the cost of sales, distribution or administration activities. this classification may be of more interest to the recipients of the accounts than the classification by nature, giving them more relevant information, but sometimes involves arbitrary choices in the distribution of expenditure. in its application, professional judgment has an important role. the analysis by nature is simpler than the analysis by function, because it does not require an allocation of expenses according to the nature of the different functions of the enterprise. 2.3 the consolidated statement of changes in equity the statement of changes in consolidated equity explains the changes in consolidated equity from one year to the next. consolidated equity may change due to: increasing the capital of the consolidating enterprise; distributions made by the consolidating enterprise during the year; the incidence of the exchange rate variation, in case of consolidation of foreign enterprises; incidence of revaluations; the incidence of restructurings and certain internal disposals of assets; changes in the percentage of interest in consolidated enterprises, following the change of its capital; changes in accounting methods. 2.4 incidences of the conversion of foreign companies’ accounts on equity in order to consolidate foreign companies, their financial statements may be converted based on the use of the historical cost method or the closing rate method. the use of the historical exchange rate method does not cause a change in equity, because they are converted based on historical cost and the incidence of exchange rate changes is recorded in the income statement. in the case of the closing exchange rate method, equity is also converted on the basis of the historical exchange rate. but, due to the conversion of the other balance sheet items based on the closing rate, in the balance sheet of the foreign company is presented the balance sheet item of capital “conversion differences”. when the securities of the consolidated company are eliminated, the translation differences are divided between the group and the minority. in this situation, the conversion difference that belongs to the group changes from one year to another depending on the evolution of the exchange rate. 6 2.5 consolidated cash flow statement the cash flow statement is an essential component of the financial statements presented by large enterprises. the format of the cash flow statement in the international accounting framework is based on the ias 7 standard “cash flow statement”. the current success of the cash flow statement is closely linked to the development of the valuation of economic activities through financial markets. as it provides investors with useful information for making decisions, the picture of cash flows contributes to the efficiency of markets. also, the success of value-based management can only increase the importance of the cash flow statement. the table of cash flows shows such flows, known as receipts and payments, during the period. in other words, it shows where the liquidity came from and how it was spent, thus explaining the causes of their variation. in the vision of the accounting norm ias 7 “statement of cash flows”, cash is assimilated with cash and cash equivalents. liquidity includes cash and demand deposits. liquidity equivalents are short-term investments that are highly liquid, easily convertible into a predetermined amount of liquidity and whose value is not likely to change significantly. the purpose of holding cash equivalents is to meet short-term treasury commitments. it follows that their maturity is usually less than 3 months. the securities representing the participations are excluded from the cash equivalents, except for the preferred shares acquired shortly before their maturity and which have a fixed redemption date. the expression cash flows refers to the set of cash inflows and outflows and cash equivalents. cash flows do not include movements between items that constitute liquidity or cash equivalents, because they are part of the management of the company's treasury. the statement of cash flows must show the cash flows for the year, broken down into operating, investing and financing activities. 2.5.1 cash flows generated by operating activity these refer to: proceeds from the sale of goods and services; receipts from royalties, fees, commissions and other income; payments on debts to suppliers of goods and services; payments in favor of employees; payments and refunds of income taxes, provided that they cannot be specifically associated with financing and investment activities, etc. 2.5.2 cash flows generated by investment activity these refer to: payments made for the acquisition of tangible and intangible assets, as well as other longterm assets; proceeds from the sale of tangible and intangible assets and other long-term assets; payments made for the acquisition of equity securities and debt securities issued by or from other undertakings, as well as payments made for the acquisition of securities in joint ventures; receipts relating to the sale of equity securities and debt securities issued by or from other undertakings, as well as receipts relating to the sale of securities held in joint ventures; cash advances and loans to third parties; receipts from the repayment of cash advances and loans to third parties. 2.5.3 cash flows generated by financing activity these refer to: receipts from the issue of shares and other equity instruments; payments made to shareholders for the acquisition or redemption of the company's shares; 7 proceeds from the issuance of bonds, bank loans, treasury bills, mortgages and other shortterm or long-term loans; liquidity repayment of borrowed amounts; payments made by the lessee to reduce the debt balance related to a lease-financing contract. 3 conclusions the need for consolidated financial statements is obvious, they give a more comprehensive picture of the real situation of a group, an image that can not give all the balance sheets of the component companies, they allow the global expression of the financial situation and the result of the group. the main factor in generating this need is presented by the existence on foreign capital markets of multinational companies and groups. in order to be able to manifest themselves as actors of the international capital markets, the groups of companies must first of all have comparable information, but also sufficient, or relevant, regarding the existing investment opportunities. the existence of consolidated information at the level of a group of companies, especially in the conditions in which it operates beyond the borders of the national economy, represents a mandatory condition for the success and economic performance of the group [4]. the objective of the consolidated financial statements is to present the financial position, performance and evolution of the financial position in relation to the units included in the group of companies, as if it were a single company. the existence of consolidated financial statements at the level of the group of companies has quickly covered the distance between necessity and reality, due to the needs manifested by economic reality, but also due to significant efforts to increase the competitive advantages of different economic entities [5]. within any company, but especially within a group of companies, the foundation of managerial decisions and, in particular, of investment decisions on real economic and financial bases has become a necessity, as a result of the risks that may arise and cause a failure of actions taken, but also due to the significant costs involved in adopting and implementing an inappropriate decision. benefiting from the information provided through the consolidated financial statements is a real and solid basis for substantiating investment decisions, strategic decisions and, last but not least, executive management decisions. an investment decision based on viable, comparable, consolidated and real accounting information is subject to a high degree of success. consolidation of accounts is an important condition for rendering a true and fair view of the balance sheet, performance and financial position of an enterprise in accordance with the normative framework of international accounting standards. the harmonization of the accounting regulations in our country with the international ones will bring to the forefront this issue, in the not too distant future. consolidation of accounts, especially using a regulatory framework, leads to clarification of the financial position and performance of a group of enterprises. it is thus eliminated that the public is misled by multiplying turnover as a result of reciprocal transactions, or by confining all risks and indebtedness to a single enterprise in the group for a more favorable presentation of the others. references [1] dorina nicoleta lezeu, analiza situațiilor financiare ale întreprinderii, editura economică, 2004; [2] omfp 3055/2009 pentru aprobarea reglementarilor contabile conforme cu directivele europene modificat prin ordinul 2239/2011 și care ulterilor au au fost abrogate de ordinul 1802/2014 (acesta din urmă întrând în vigoare începând cu luna ianuarie 2015) https://contabilul.manager.ro/a/14125/noi-reglementari-contabile-de-la-1-ianuarie-2015-s-a-publicat-ordinul-18022014.html https://contabilul.manager.ro/a/14125/noi-reglementari-contabile-de-la-1-ianuarie-2015-s-a-publicat-ordinul-18022014.html 8 [3] l.eros-stark, m.pantea, analiza situației financiare a firmei. elemente de teorie, studiu de caz, editura economică, bucurești, 2001 [4] https://www.academia.edu/31080775/capitolul_i_aspecte_generale_privind_grupuril e_de_societ%c4%82i_%c5%9ei_situaiile_financiare_consolidate_1._noiunea_d e_grup_de_societ%c4%82i [5] https://lege5.ro/gratuit/gqytambrgm/situatii-financiare-anuale-consolidate-si-rapoarte-consolidatereglementare?dp=gy4tanjyha4ti https://www.academia.edu/31080775/capitolul_i_aspecte_generale_privind_grupurile_de_societ%c4%82i_%c5%9ei_situaiile_financiare_consolidate_1._noiunea_de_grup_de_societ%c4%82i https://www.academia.edu/31080775/capitolul_i_aspecte_generale_privind_grupurile_de_societ%c4%82i_%c5%9ei_situaiile_financiare_consolidate_1._noiunea_de_grup_de_societ%c4%82i https://www.academia.edu/31080775/capitolul_i_aspecte_generale_privind_grupurile_de_societ%c4%82i_%c5%9ei_situaiile_financiare_consolidate_1._noiunea_de_grup_de_societ%c4%82i https://lege5.ro/gratuit/gqytambrgm/situatii-financiare-anuale-consolidate-si-rapoarte-consolidate-reglementare?dp=gy4tanjyha4ti https://lege5.ro/gratuit/gqytambrgm/situatii-financiare-anuale-consolidate-si-rapoarte-consolidate-reglementare?dp=gy4tanjyha4ti agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol 10 (2016) 35 the need to harmonize the laws of the european union regarding the succesion law laura-dumitrana rath – boşca 1 , loredana mirela barmoş 2 , ioana andreea (mihale) stănescu 3 abstract: the inheritance implies a balance between the will of the one who plans the anticipated transmission of his assets and the ones waiting for it. the creditors are equally put into equation in the transmission of the succession. the relations between these three categories of interest are regulated differently regarding the laws of succession of the states that favor either the interests of the interested in planning his succession or trying a "equilibrium" dampening discretion of the author of the inheritance, trying to protect his close family members (reserved to). 4 key words: inheritance, european union, harmonize, inheritance certificate, europe introduction in the past decades the technical scientific progress and continuous discovery of modern means of communication and the more refined information systems led to the rapprochement between people and people, states and countries, people and states. the european union law only regulates certain relations in civil law, family law, inheritance law, labor law, etc. the legal relations parties with foreign elements can be state, individuals or legal entities. the legal relations with one or more foreign elements are related to several legal systems. the science of law, the foreign element has been defined as "a circumstance in effect of which is legally tied to several countries, and consequently, several systems of law or laws belonging to different states." the objects, the content and the subject form the structure of the legal report and foreign element can be an attribute of each. for example, in a closed marriage between two people of different nationalities, the question, before the officer of civil status, will be on the law applied to the conditions of fund and form of the marriage in cause. in a legal report of the succession law which includes foreign elements we will encounter the same problem, the law applicability. 1 faculty of juridical and administration sciences, social sciences department, coordinating teacher agora university of oradea, oradea, romania, *correspondence: asis.univ.drd laura-dumitrana rath boşca, agora university of oradea, 8 piaţa tineretului st., oradea, romania e-mail: dumitra1970@yahoo.com 2 faculty of juridical and administration sciences, student, agora university of oradea, oradea, romania, 8 piaţa tineretului st., oradea, romania e-mail: loredanabarmos@gmail.com 3 faculty of juridical and administration sciences, student, agora university of oradea, oradea, romania, 8 piaţa tineretului st., oradea, romania e-mail: ionystanescu@gmail.com 4 dan andrei popescu, ghid de drept internațional privat în materia succesiunilor, magic print publishing house, onești, 2014, pag.6 mailto:loredanabarmos@gmail.com 36 although some skeptic people see the "new europe" as an experiment of transnational governing, those who believe that we are heading towards an impending globalization and believe in the european dream, which is characterized by a definite diversity in all aspects of social, cultural, economic, legal, etc., give hope to the generation´s growing interest for global and locally connection. the european union in the harmonization of national laws the european union was created by several sovereign states that have decided to choose a common destiny and in order to achieve agreements and joint actions in specific areas. these specific areas are areas where it is preferable for the member states to work and decide together not individual for their interest and common good. if when the european community began to be build namely the 1950 the harmonization of civil law was not among the objectives, the continuous development of relations and rapports between states and between nationals of the member states, free movement of people, goods, capital and services show increasingly clear need for harmonization of civil law in general, and especially in what concerns the inheritance law. today the european union is not technically a uniform system regarding inheritance law. this is a very difficult thing taking into account the specifics and peculiarities of the historical traditions evolution of each member state and their own moral, family and religious rules. the law of succession is regulated differently in each member state, from the classes of heirs, surviving spouse share, reserve succession and other major issues. this is one of the oldest and most conservative parts of civil law, reflecting the nation's way of being itself. but we will certainly always remember death and its effects, but it also marks the new beginning for us. the inheritance law is not confined only to an amount of technical rules, "accounting", aimed to distribute a heritage that risks of remains without an owner, but its principles designed to establish rules on transfer, transmission and share of the heritage, coming to legitimize posterity of the dead. this is concerned with maintaining and enhancing the harmony of this poster, which must mean dropping reasonableness and family ethics. the inheritance law is therefore closely linked to the idea of fairness and morality. but they are reported both in the author of the heritage and, equally, to those who make up the family. in addition, both equity and morality of an attitude are concepts that evolve over time and cannot be dissociated from the spirit of the age in which the succession is opened. 5 the laws of succession in the member states are characterized by their diversity. the unification efforts in this area are as sensitive as it seems insurmountable. the succession law is an important branch because it reflects the profound traditions of a country and mark the end of the author´s heritage and a new beginning for those who will inherit. it is an inexhaustible source of study because the national solutions of the member states present a great variety. until recently, the european union considered that the succession law is a branch of law that must be left to member states for separate regulations, but the events and diversity, multiplicity of legal relations of inheritance law, and taking into account the free movement of persons, goods, capital and services and all the problems that arise from this, it is clear the need for cooperation and the development of cross-border relations between the member states, to build both bridges between legal systems and possible regulation uniform. it may be noted that in the current european context, on different levels, efforts are made to modernize the law of succession. however, an only juxtaposition between the laws of england and germany is sufficient to see that the structures based on other traditions associated with different social, cultural or economic determinants are so far apart that it is difficult to reach a common and uniform settlement for the succession law within the european union. despite this, and the position that for a short period of time was believed that the problems of succession law is outside the competence of the european union, the vision of a uniform european law in matters of succession law always seemed tempting. therefore, legislators irrespective of the possibilities of eu 5 dan andrei popescu, ghid de drept internațional privat în materia succesiunilor, magic print publishing house, onești, 2014, pag. 5 37 legislative and theoretical arguments of recent years have changed the laws concerning the pro-european spirit of succession law. the european integration has been one of the most important factors shaping the new regulation. although so far there have been no serious efforts to harmonize european succession law, the concept of europeanization of this law is still alive. 6 one question that is impossible to predict today would be whether other amendments to the law of succession should move towards integration, or whether they should be limited to a simple implementation of national needs. in any case, it should be noted that the possible drafting of a new law in matters of succession should be based on a deep discussion about the state law. the influence of tradition stopped the circulation of national models beyond the state and the implicitly succession law harmonization at eu level. it is premature to talk about a unified european law of succession, common in all member states of the european union. although one of the most important objectives of the european community was, and still is, to promote a common market, and not to promote the unification laws of succession. 7 it is worth mentioning that there is still no international convention to standardize the law of succession. even in europe, in an era where a lot of discussion about the europeanization of the private law, there is no concrete project regarding succession. 8 but it was explicitly mentioned that the initiative does not refer to family law and succession law. 9 some harmonization attempts have been made at eu level since 1989, but this request was left aside considering that there are other more important areas of civil and criminal law to be harmonized. in 1994 it was raised the issue of harmonization by designing a european civil code, but unfortunately neither this date has been successful. it was not until july 11, 2001 when a first concrete step in the harmonization of certain civil matters and contracts is realized. the second practical step has been made in the action plan of the european commission "a coherent european contract law" on 12 february 2003, when the commission presented the findings at the earlier positions taken. 10 as can be assumed, the idea of a european civil code at least on a philosophical level seems fair and acceptable. while adjusting the succession law principles and concepts in a model is a very difficult process, such regulation is why the european union should adopt measures to harmonize legislation in this area. so in the absence of uniform rules and national disparities persist, they are a source of significant problems in legal relations with foreign elements, both for people who want to regulate in advance the situation of succession and potential beneficiaries, as for third parties holders or purchasers of the succession property. 11 the european council meeting in brussels adopted the "hague program" in 2004 12 , which show the necessity to adopt of a unification instrument of the law relating to succession law in the european union, and the creation of a european certificate of succession. this program does not regulate matters of succession law but the free movement of people within the eu and the opportunity to demonstrate, through the european certificate of succession, which is the heritage status of the deceased. august 17, 2015, is the date when the european regulation no 650/2010 regarding jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments of acceptance and not least the creation of a european certificate of succession governing this area of eu law came into force. this regulation introduces some significant changes in harmonizing the rules on succession law in all eu countries. it sets a new tool for documenting the succession rights of europeans. 13 6 b. ancel, le droit européen des successions. commentaire du règlement no 650/2012 du 4 juillet 2012, eds. a. bonomi, p. wautelet, brussels 2013, pp. 8 7 walter pintens, familia și succesiunea de drept în uniunea europeană. enciclopedia internațională de legi. vol. 1., 1997, p. 11 8 http://legeaz.net/dictionar-juridic/drept-succesoral-comparat 9 idem 10 idem 11 idem 12 dan andrei popescu, ghid de drept internațional privat în materia succesiunilor, magic print publishing house, onești, 2014, pag. 8 13 eleanor c. ritaine, national succession laws in comparative perspective, 14 era forum publishing house, 2013, pag.131-154. 38 the purpose of such regulation should be a fair, but above all effective regulation of succession cases that affect various countries of the european union. it replaces the existing national regulations under international law of succession, which is a major achievement of eu legislation in this area. this act has caused a lot of controversy even before it entered into force. it questioned the competence of the european union to harmonize legislation in this area. another controversy is the application field of the regulation and its legal implications. as a result of increasing migration within the eu and, more growth by acquisition of european assets outside their country of origin, were the starting points in the standardization of rules that apply to cross-border successions. therefore, regulation no 650/2012 is a response to the idea of unifying the succession law in europe. the divergences in national laws of countries belonging to the eu accounted for a long time a significant problem. to determine the law (the law of the countries) applicable to a succession or body should resolve the dispute but it is not always an easy task. this issue has become an increasing challenge for both law enforcement authorities and for doctrine. in the european union there are increasing cross-border succession cases. for this reason, it has been recognized that the rules of succession law could be the subject of many questions. the unification of succession law rules took place so far primarily to the international conventions (international treaties), but this was not enough. as the eu has set itself the objective to ensure the free movement of people (art. 3 par. 2 teu), it was necessary to adopt some actions in the private law area, with cross-border implications. 14 the regulation is therefore a comprehensive legal instrument governing international succession law of the european union. the european certificate of succession is the uniform document which may be issued by notaries or other competent authorities in successions with foreign elements and is governed by article 62, art. 63 and (67) of regulation (eu) no. 650/2012. if the heirs apply for a legacy with foreign elements, so the clerk may issue a certificate of inheritance under law no. 36/1995 and a european certificate of succession under regulation (eu) no. 650/2012. 15 the european legislature adopted an extensive conception notion of succession, which should include in its scope "all aspects of civil law relating to assets of a deceased person", that means "all forms of transfer of assets, rights and obligations of the concerned death, be it a voluntary transfer under a disposition of property upon death or a transfer form intestate succession.” so the scope of the regulation is expanded to include all matters that traditionally the law of the states circumscribes the scope of succession. 16 the recital (67) of regulation (eu) no. 650/2012 shows that: "for a succession of foreign elements into the union to be resolved in a quick, simple and effective way, the heirs, legatees, executors or administrators of the estate should be able to prove easily the status and / or rights and powers in another member state, for instance in a member state where the property of the succession is located. to enable this, this regulation should introduce a uniform certificate, the european certificate of succession (hereinafter referred to as "the certificate") to be issued for use in another member state. to respect the principle of subsidiarity, the certificate should not substitute internal documents which may exist for similar purposes in the member states. " article 62 of regulation (eu) no. 650/2012 provides: "the creation of a european certificate of succession (1) this regulation creates a european certificate of succession (hereinafter referred to as "certificate"), which is issued for use in another member state and shall produce the effects listed in article 69. (2) use the certificate is not mandatory. 14 jonathan harris, «the proposed eu regulation on succession and wills: prospects and challenges», 22 trust law international (2008), pp. 181-188 15 laura dumitrana rath-boşca, certificat european de moştenitor – vol. studii şi cercetări juridice europene, universul juridic publishing house, bucharest, 2016, pg.35 16 op.cit. dan andrei popescu pag. 9 39 (3) the certificate does not replace the internal documents used for similar purposes in the member states. however, a certificate issued for use in another member state produces effects listed in article 69 in the member state whose authorities have issued it in accordance with this chapter. article 63 of regulation (eu) no. 650/2012 states that: the purpose of the certificate (1) certificate is for use by heirs, the legatees having direct rights to the inheritance and the executors or administrators of the estate who must prove in another member state status or to exercise that right of inheritance or legatee and / or duties of an executor or administrator of the estate. (2) the certificate can be used, in particular, to demonstrate one or more of the following: (a) status and / or rights of each heir or, where applicable, each legatee mentioned in the certificate and respective shares of the estate; (b) the attribution of a specific asset or specific assets forming part of the estate heir / heirs, as appropriate, legatee mentioned (legatees mentioned) in the certificate; (c) the power of the person mentioned in the certificate to execute the will or administer the estate. " from the foregoing it appears that "the certificate of inheritance is issued in inheritance proceedings in which the heirs, legatees having direct rights for the succession, executors and administrators of the estate must prove their status or to exercise their corresponding rights in another state member.” 17 when the last habitual residence of the inheritance author or some goods that make up the estate are located in another state a european certificate of succession is issued. we can also encounter a situation where the element of foreignness to appear after the opening of succession proceedings, unless it has not been known that the deceased has assets in another european state, it leads to the issuing of a european certificate of death after initially it had been issued a national certificate of death. the general rule in this jurisdiction is written in art. 4 of the regulation. according to the article, the courts "in the member state in which the deceased was habitually resident at the time of death shall have jurisdiction to rule on the succession as a whole." 18 conclusion "the succession institution is an important component in the economic development and strengthens family relationships, society as a whole. beginning with the object, passing over the incipient and empirical rules and regulations, continuing with a developed and refined european or national law system, the "heritage" or "succession" has undergone various approaches both in terminology, and in philosophy, determined elements of economic development, legislative or policy that company ” 19 currently, it is possible to identify some general areas in which practical solutions in many european countries do not differ from each other because they are based on the guiding ideas that any potential legislative divergence is not a reason to consider uniform law impossible in the future. given that the core values and principles divergent legislative concepts are the same, finding common principles (denominators) should allow, in the future, making a detailed discussion on specific solutions and unified law of successions in the european union. bibliography 17 ioana olaru dreptul european al succesiunilor internaționale, uniunea națională a notarilor publici din românia, bucharest, notarom, 2014 18 dan andrei popescu, ghid de drept internațional privat în materia succesiunilor, magic print publishing house, onești, 2014, pag.29 19 liviu-bogdan ciucă, legal developments on inharitance, from rules under the primitive community to the european rules on inharitance, publicat în volumul „sgem conference on political scients, law, finance, economics and tourism” conference proceedings, vol. i, în cadrul international multidisciplinary scientific conferences on social scients and arts, albena, bulgaria, 2014 40 a. sources 1. anderson, miriam , arroyo i amayuelas, esther , the law of succesion: testamentary freedom, european perspective, european law publishing, amsterdam, 2012 2. b. ancel, le droit européen des successions. commentaire du règlement no 650/2012 du 4 juillet 2012, eds. a. bonomi, p. wautelet, brussels 2013, pp. 8 3. christian hertel, „european certificate of succession – content, issue and effects”, 15 era forum publishing house (2014), pp. 393-407 4. dan andrei popescu, ghid de drept internațional privat în materia succesiunilor, magic print publishing house, onești, 2014 5. eleanor c. ritaine, national succession laws in comparative perspective, 14 era forum publishing house, 2013 6. garb, louis, wood, john, international succesion, third edition, oxford university press, 2010, great britain 7. hayton, d, the significance of the hague conventions on trusts and on succession: a common law perspective; e pluribus unum. liber amicorum georges a.l. droz, nijhoff publishers, the hague/boston/london 1996. 8. ioana olaru dreptul european al succesiunilor internaționale, uniunea națională a notarilor publici din românia, bucurești, notarom, 2014 9. jeremy rifkin: visul european, bucharest, polirom publishing house, p. 294, 2006 10. laura dumitrana rath-boşca, certificat european de moştenitor – vol. studii şi cercetări juridice europene, universul juridic publishing house, bucharest, 2016, pg.35 11. liviu-bogdan ciucă, legal developments on inharitance, from rules under the primitive community to the european rules on inharitance, publicat în volumul „sgem conference on political scients, law, finance, economics and tourism” conference proceedings, vol. i, în cadrul international multidisciplinary scientific conferences on social scients and arts, albena, bulgaria, 2014 12. paul terner, «perspectives of a european succession law», 14 maastricht journal of european and comparative law, 2007, p. 151 13. sarah geber, die internationale zuständigkeit nach der vo nr. 650/2012, saarbrücken 2014, p. 19. 14. v.d zlătescu., drept privat comparat, oscar prinţ publishing house, bucharest, 1997, p. 249 15. walter pintens, familia și succesiunea de drept în uniunea europeană. enciclopedia internațională de legi. vol. 1., 1997 b. electronic sources 1. http://legeaz.net/dictionar-juridic/drept-succesoral-comparat http://legeaz.net/dictionar-juridic/drept-succesoral-comparat agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol 11 (2017) evolution and ethics of digital technology in marketing valentina-simona pașcalău 1 1 agora university of oradea, str. p-ța tineretului, nr. 8, oradea, romania e-mail simona.pascalau@univagora.ro abstract the purpose of this paper is to identify the implications of ethics in the evolution of technology. this article aims to define and analyze concepts such as: big data, artificial intelligence and bioinformatics. also, this article presents the applicability of artificial intelligence and discover the future trend of jobs in the coming years, the importance of adapting to changes and learning more skills that help to support future jobs. keywords: digital, technology, marketing. 1. introduction technology in digital marketing, the expansion of the internet and high-speed broadband connections, the development of social media platforms and the widespread adoption by users of smart mobile devices have led to the development of digital marketing, social media marketing and mobile marketing. the digital transformation of marketing is reflected in how companies and consumers have adopted new technologies, as well as how technology has facilitated new market behaviors, new ways of interaction and new consumer experiences (lamberton c., stephen a.t., 2016). the adoption of digital technologies transforms the business models, the products, the price models, the ways of distribution, networking and communication with customers. ethics in the evolution of technology refers to the application of ethical thinking regarding the practical concerns of technology. the main reason why the ethics of technology is growing is reflected in the new technologies that give us more power to act, and that means we have to make certain choices that we didn't have to make before. if in the past, our actions were involuntarily limited by our vulnerability, at present, we must learn how to be voluntarily constrained by our reason, more precisely, by our ethics. (weckert j., douglas a., 1997) ethics in the evolution of technology addresses issues that may arise in areas such as information technology, biotechnology, artificial intelligence, cybersecurity and other emerging disciplines. the question that is emphasized is how can you turn a threat into an opportunity? under the conditions in which the technological trends will have the greatest impact in the next 10-15 years. 2. big data analytics big data analysis is a fairly complex process that examines sets of big data in order to discover information, such as market trends, certain unknown correlations, and customer preferences, in order to help organizations make informed business decisions. ( kitchin r., 2014 ) mailto:simona.pascalau@univagora.ro https://dl.acm.org/author_page.cfm?id=81100338941&coll=dl&dl=acm&trk=0 2 focused on specialized analysis systems and software, as well as high-power computing systems, big data analysis offers certain business benefits, including: more efficient marketing, new revenue opportunities, competitive advantages over rivals, and improved operational efficiency. the term big data refers to the extraction, manipulation and analysis of data sets that are too large for ordinary processing. because of this, special software is used and, in many cases, also dedicated computers and hardware. generally, at these data the analysis is done statistically. based on the analysis of the respective data, predictions of certain groups of people or other entities are usually made, based on their behavior in various situations and using advanced analytical techniques. thus, tendencies, needs and behavioral evolutions of these entities can be identified. (reichman o.j., jones m.b. and schildhauer m.p., 2011) 2.1. ethics in big data big data ethics, also known as simple data ethics, refers to the systemization, defense and recommendation of the concepts of right and wrong behavior in relation to data, especially personal data. (reynolds g.w. , 2002). fig. 1 – big data ethics source : www.ibmbigdatahub.com the ability to analyze big data gives the analytical world new opportunities to predict behavior. access to new forms of data (social media, text analysis and internet data) outside the organization's environment, when analyzed together with internal data, offers the ability to research, predict trends and ask questions that have not been before. . data scientists can make analyzes so advanced that they can invade a person's privacy without violating data protection laws. laws and regulations (gdpr) guide organizations, especially regarding privacy and data usage, so that recent advances in analytics and big data technologies have widened the gap between what is legally allowed and what is possible, replacing the balance of power between individuals and data collectors. technology knows and remembers more about us and our preferences than we do, so we can say that big data can be manipulative and unethical. as an organization seeks to apply big data analytics to improve the way it works, we have no way of knowing whether the use of this technology is ethical, however, it is stated that it is advisable to have skills in the collection and marketing business. https://www.google.com/search?client=firefox-b-d&sa=x&biw=1360&bih=632&sxsrf=acybgnraaagxd8ckar4-o1wq0ajr065amg:1572975544755&q=ethics+in+information+technology+george+walter+reynolds&stick=h4siaaaaaaaaaa3iwqrcmawa0jmgih48ewgevusfiexnrldjwrs2kkbl_by_1me7vfvuv0xgy_uzhg83po8bzhju2otrph2s73eusdg0mlezmmjq3duc6g91iwvrv4hl8rdnzqiumpkhycq8a5moezq3gskozcvf6x-ufukddaaaaa&ved=2ahukewjyndfeztplahuptiskhdl9b1eqmxmoatafegqidxah http://www.ibmbigdatahub.com/ 3 online marketing intermediaries provide information about the destination sites, being a means of connecting internet users with product information. the internet is not a threat, on the contrary, we can discuss strategic directions for using the internet:  market penetration strategy: the internet is used to create sales for current parts.  market creation strategy: the internet is used to generate sales for us, to make geographic markets, to capitalize on the advantage of advertising to achieve the international level at a low cost, without the need for support or sales infrastructure for other parts.  product application strategy: develop new intelligent digital care products for the internet.  diversification strategy: the internet supports the sale of products that are cared for and developed and sold to us. this determines surveillance capitalism, which means looking for human experience as a free raw material for translating into behavioral data, but it has given rise to a concept called dataism, which is considered to be a techno-religion that treats everything in terms of data processing. and whose supreme value is the free flow of information. dataism is a term that has been used to describe the mindset or philosophy created by the emerging significance of big data. it was first used by david brooks in the new york times in 2013. ethical considerations of dataism: 1. can big data make choices on our behalf? 2. will it become a tool of subjugation and manipulation by global elites? 3. will it produce a useless generation? 3. artificial intelligence artificial intelligence technologies, such as machine learning, are the basis of advanced analysis tools that many large organizations rely on for competitive advantage. as ai (artificial intelligence) becomes ubiquitous, a wider range of organizations will have access to artificial intelligence tools to help make business decisions. (smith b., shum h., 2018). it is claimed that ai aggregates information to multiple users and has the ability to do predictable things. ai is an area of computer science that emphasizes the creation of intelligent machines that function and react as humans. two important approaches of ai: logical and rule-based approach and big data and machine learning based on patterns / algorithms. artificial intelligence has to do with the aggregation of marks for a long time, in essence, it takes human intelligence, transposed into human behavior, and transmits it to a computer that takes this information. artificial intelligence is a field of technological endeavors that people explore to make a better sense of the world and, in making the best decisions, in a way, ai has a fundamentally ethical aspect. therefore, we must give efficiency to morality, but because something is more efficient it does not mean that it is morally better, although often efficiency is a dramatic benefit to humanity. 3.1. applicability of artificial intelligence artificial intelligence has become an essential part of the technology industry and research associated with artificial intelligence is highly technical and specialized. https://en.wikipedia.org/wiki/philosophy https://en.wikipedia.org/wiki/big_data https://en.wikipedia.org/wiki/david_brooks_(cultural_commentator) https://en.wikipedia.org/wiki/the_new_york_times 4 this concept is a branch of computer science that aims to create intelligent machines, dealing with the simulation of intelligent behavior in computers or the capability of a machine to imitate intelligent human behavior. also, artificial intelligence is an area of computer science that deals with giving machines the ability to seem like they have human intelligence or the power of a machine to copy intelligent human behavior. artificial intelligence can replace certain jobs such as: computer programmers, call center operators, driver, teacher, doctor, etc. previous studies have identified the effects of automation, such that: • low-skilled jobs will decrease by 30% • qualified jobs are the trades that follow a routine process and are repetitive. usually, it does not require a higher academic level. • medium skilled jobs will improve by 8% • medium skilled jobs are jobs that require a small amount of knowledge in managing people in the process where teams deal with more difficult problems • highly skilled jobs will increase by 56% • highly skilled jobs are jobs that require creative and critical thinking, analytical and problem solving skills. as far as artificial intelligence is concerned, we must also present some negative aspects, such as: "the system" will develop "a consciousness" and will rebel against people, people will lose the freedom to choose and we will have the dictatorship of the algorithm "and mass manipulation" , people will not be able to learn digital skills fast enough, they may misinterpret human instructions due to lack of context, people will lose the ability to hide their true emotions and feelings. 4. bioinformatics: modernization of elites bioinformatics is an interdisciplinary science that deals with the development of software methods and tools that help to understand data of biological importance. (luscombe n.m., greenbaum d., gerstein m., 2000) therefore, bioinformatics is a branch of biological science that deals with the study of methods of storage, retrieval and analysis of large sets of biological data. according to wikipedia, “bioinformatics uses many fields of computer science, mathematics and engineering to process biological data. complex machines are used to read biological data at a much faster rate than before. databases and information systems are used for the storage and organization of biological data. biological data analysis can involve algorithms in the field of artificial intelligence, soft computing, data extraction, image processing and simulation. algorithms in turn depend on theoretical foundations such as discrete mathematics, control theory, system theory, information theory and statistics. software tools and technologies commonly used in the field include java, c #, xml, perl, c, c ++, python, r, sql, cuda, matlab, and spreadsheet applications.” also, bioinformatics is considered an area of science in which biology, computer science and information technology are merged into one discipline. the ultimate goal of this science is to allow both the discovery of new knowledge in biology and to create a global perspective from which the unifying principles of biology can be distinguished. we observe three important directions of research in bioinformatics:  the development of new algorithms and statistics with the help of which can be extracted, from a large number of data, those elements that have common features. 5  analysis and interpretation of different types of data related to nucleotide and amino acid sequences, protein structure.  development and implementation of tools that allow efficient access and manipulation of different types of information. (luscombe n.m., greenbaum d., gerstein m. ,2000) the emergence and development of bioinformatics were determined by certain opportunities and challenges. currently, the new high-efficiency technologies bring unprecedented opportunities for scientific research, allowing us access to new data and studying genetic differences in different people, as well as discovering genetic mutations that are responsible for some diseases. the huge amount of data requires efficient methods, and exponential growth requires scalable methods. bioinformatics is a mixture of molecular biology and data science and deals with the application of calculation methods to analyze biological data collections, such as genetic sequences, cell populations or protein samples. bioinformatics has two main roles: firstly, it is a powerful technology for searching, managing and analyzing big data in scientific research. secondly, as a methodology, it is a holistic system based on data, an approach that generates new assumptions, finds new patterns and new functional elements. this complements the traditional methods of experimental biology. so we see that there are three major approaches to bioinformatics: data analysis, software development and modeling. in conclusion, bioinformatics aims to apply information technology to advanced biological problems, such as transcriptomics and proteomics, involving huge amounts of data, so that we can talk about: human improvement as a loaded term that has eugenics, human improvement will be practiced with recklessness and selfishness , with a short-term outlook (first in the chinese military), most of the investments by the big technology billionaires have concerned brain technologies and anti-aging. 5. conclusions the convergence of new big data management programs has produced a unique moment in the history of data analysis. this trend means that we have the capabilities to analyze data sets very quickly and cost-effectively for the first time in history, and it is a real leap forward and a clear opportunity to make huge profits in terms of productivity, efficiency, revenue and profitability. big data and business analytics solutions are now a core technology and, together with ai and automation, are the basis on which the digital transformation process is built.artificial intelligence and technology are an important component of life that always interests us and surprise us with new ideas, topics, innovations, products.the importance of ethics among information technology professionals is responsible for ensuring that computer technology is not used in the wrong ways that can harm people, the environment and society.ethics in the evolution of technology has principles that can be used to govern technology, including factors such as risk management and individual rights. finally, we present some optimistic recommendations: adopt and invest in technology, manage and lead network organizations, invest in education, adopt and invest in humanity. references [1] brooks, d., (2013), opinion. the philosophy of data , the new york times [2] kitchin, r., (2014), the data revolution: big data, open data, data infrastructures and their consequences, sage publications [3] lamberton, c., stephen, a.t. (2016), a thematic exploration of digital, social media, and mobile marketing: research evolution from 2000 to 2015 and an agenda for future inquiry, journal of marketing https://www.nytimes.com/2013/02/05/opinion/brooks-the-philosophy-of-data.html https://books.google.com/?id=rnjsawaaqbaj&printsec=frontcover&dq=rob+kitchin+the+data+revolution#v=onepage&q=rob%20kitchin%20the%20data%20revolution&f=false https://books.google.com/?id=rnjsawaaqbaj&printsec=frontcover&dq=rob+kitchin+the+data+revolution#v=onepage&q=rob%20kitchin%20the%20data%20revolution&f=false 6 [4] luscombe, n.m., greenbaum, d., gerstein, m. (2000) , what is bioinformatics? an introduction and overview. yearbook of medical informatics [5] reichman, o. j. , jones, m.b. and schildhauer m.p., (2011), challenges and opportunities of open data in ecology, science 331 [6] reynolds, g.w. (2002), ethics in information technology , isbn-13: 978-1337405874 [7] smith, b., shum, h. (2018). the future computed: artificial intelligence and its role in society [8] weckert , j., douglas, a. , (1997) , computer and information ethics , contributions to the study of computer science (book 4) [9] www.ibmbigdatahub.com [10] https://www.scu.edu/ethics/focus-areas/technology-ethics [11] www.wikipedia .org https://www.google.com/search?client=firefox-b-d&sa=x&biw=1360&bih=632&sxsrf=acybgnraaagxd8ckar4-o1wq0ajr065amg:1572975544755&q=ethics+in+information+technology+george+walter+reynolds&stick=h4siaaaaaaaaaa3iwqrcmawa0jmgih48ewgevusfiexnrldjwrs2kkbl_by_1me7vfvuv0xgy_uzhg83po8bzhju2otrph2s73eusdg0mlezmmjq3duc6g91iwvrv4hl8rdnzqiumpkhycq8a5moezq3gskozcvf6x-ufukddaaaaa&ved=2ahukewjyndfeztplahuptiskhdl9b1eqmxmoatafegqidxah https://dl.acm.org/author_page.cfm?id=81100338941&coll=dl&dl=acm&trk=0 http://www.ibmbigdatahub.com/ https://www.scu.edu/ethics/focus-areas/technology-ethics medimond template agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 13 (2019) emotional intelligence – the road to excellency in management gheorghina liliana bîrlădeanu 1 agora university agora, tineretului square 8, oradea, romania e-mail: gheorghina_birladeanu@yahoo.com abstract the current management implies a continual adaptation to the economical, political and social dynamics and evolution. upon this context there is a need for leaders with extremely well developed communication abilities, empathic and men of vision, who can direct by using a positive motivation. it is, thus, understood that the foremost element is the emotional intelligence. taking into consideration the possibility of developing these values through the means of education so that to obtain a high quality management and an efficient communication, we consider this to be the way to excellency in management. keywords: emotional intelligence, excellency in management, efficient communication, positive motivation. 1. introduction i have started from daniel goleman`s idea who, in his book “the emotional intelligence”, said that within each of us there is an iq and an emotional intelligence at certain levels. but they offer an inside look regarding each of these aspects, taking separately everyone`s qualities. up to a certain point, every human possesses a cognitive intelligence and an emotional one, therefore, these two portraits melt together. however, from the two of them, the emotional intelligence brings out more qualities which determine us to truly be humans. [2, p. 67] the emotional intelligence can be obtained along time, through patience, introspection processes and conscious exercises of identifying your own emotions and of those whom we interact with. we will see that there are certain dimensions of management where emotional intelligence is indispensable and where leaders can use and develop specific techniques in order to potentiate this important ability. 2. theoretical concepts management implies communication, self-control and self-assessment. a productive and efficient communication entails being aware of your own emotions as a preceding factor in developing communication because it helps us identify the interlocutors` emotional reactions, no matter of the área where they come from. hence, we will obtain a facile management of all of these by building open and efficient communication ellements. essentially, it refers to identifying the factors that produce us major upsets, stress and situations when we have impulsive reactions. this is the first step from the tackling communication process and it requires a well-balanced approach, defined by a high self-control, that will eventually be marked by more and more efficient interactions. regarding conflicts, it is known that managers have the obligation to mediate them. this issue implies a great involvement on the part of leaders to decipher the emotions of those involved mailto:gheorghina_birladeanu@yahoo.com 2 and maximum objectiveness to stifle the conflict or to diminish it, but also in order to build up and keep moral verticality within the framework of the organisation. most of the times the conflicts arisen in the working place have an informal charácter without being founded on a rational basis that would relate to actual problems. the uppishness, the prejudgements and the deceived expectations are the most common causes of conflicts. these represent emotional motifs. it is important for the managers to not let themselves get overwhelmed in the case of a strong emotional burden. it is in indispensable to any efficient leader to be open to their colleagues` emotional reactions on condition that they approached them as supplementary information that can help them in an efficient decisional process, without letting themselves be influenced by these. when it comes to building strong, resistant teams, the emotional side is also a significant one. the way the team members communicate and the efficient relations that they develop depend on the compatibility that exists among them and on the powerful emotional component. many times, the affinities and the antipathies arosen almost intuitively, without preliminary organised analysis and evaluation processes, are much stronger than those developed along time. therefore, a good manager also needs to pay attention to the compatibilities developed on an emotional level, as well as to the profesional abilities and experiences that the organisation members have as a whole. handling emotions well contributes to improving the ability of taking decisions in an extremely short time, in crowded situations, in stressed contexts and in conflict situations. in order to unravel these situations with utmost objectivity one needs the capacity to control emotions. the emotional intelligence is the one that supports us when taking the best decisions, tonig our own emotions with the ones of those who are affected by the respective decisions. these aspects also lend us a major support in negotiations. in this área, a decisive role is held by the capacity to control our own emotions and to interpret the ones of our partners of negotiation. the leaders who possess a developed emotional intelligence have the capacity to identify their emotions, to decipher them and handle them in a way that is beneficial to the decisional processes. being aware of your own emotions means knowing how to react in certain situations and why to react that way, it means knowing your weaknesses, your limits, what motivates you and what makes you react impulsively. noone reacts well to change. whether we talk about a new colleague, a new office or a different software used during the day-to-day activity, most of the people have the impulse to reject the elements that modifiy more or less their daily routine. resting upon the information that we have collected and on the observations that we have made, the emotional intelligence helps us realize what we need to change, who we address when we plan to make a change, how we address according to the others and which is the most opportune moment for implementing the change. as it has been previously stated, emotional intelligence can be developed if it is invested with constant attention. for that purpose, the following techniques might be useful: “the imaginary friend, the diary”, self-control, personal agenda. in this manner, any manager understands what has helped him or what has prevented him from obtaing the reuslts he wanted. the way we express our emotions in the managerial activity is also externalized in gestures, pantomime and in other elements of nonverbal communication. an open manifestation of emotions may bring us success or may negatively affect the processes of taking decisions and the quality of interactions with subordinates or with different categories of stakeholders. for these reasons, handling emotions represents a major vector towards managerial excellency for a performant principal. 3 psychologists recommend the managers to keep their temper in the situations when it is diffcult to control emotions. this means retracting to a more quiescent place where they can thoughtfully analyze all the ugly feelings and words that invade them, filtering them through a short evaluation and interpretation process. after this stage, they should decide on what they consider appropriate or inappropriate to be said. thus, they will discharge of all the negative feelings, without affecting the ones around them. [3, p. 170–180] it is a known fact that a good manager is an excellent communicator. one of the parameters that establish the efficiency of a group or of an organisation refers to the communication system which also makes engaging indviduals in competition possible. [1, p. 44] the leaders who possess a superior emotional intelligence know how to identify other people`s emotions, know what to say to put in comfort, to encourage and to motivate the team. only by developing and maintaining efficient relationships, they will gain other people`s trust and they will succeed in being heard and respected. besides authority, a leader is also the member of a collective and that is why he needs to prove well developed social abilities so that he can motivate his colleagues to determine them to follow him trustingly even in the more difficult situations. empathy is also one of the most efficient exercises to develop communication abilities. the capacity to put yourself in other people`s position is vital both when it concerns interpersonal communication but also when building up a team because, by dealing things empathetically, one cand obtain a distinct perspective over things and can relive the interlocutor`s emotions. these help improving the feedback given to work colleagues and can influence certain decisions that need to be taken or the moment for communicating them. 3. conclusions in conclusion, in order to attain managerial excellency it is very important that managers spend time observing those around them, identifying the motivations that bring them positive emotions and the things that provoke them anxieties and create a stressed atmosphere at work. apart from all of these, the discussions play a significant role and also a close involvement in order to take the most optimum decisions. last but not least, it is advisable to listen to their worries and complaints, to take into consideration the elements that bring them satisfactions and to try to connect to their daily problems. references [1] gh., l., bîrlădeanu, the impact of the relation between organisational culture and global communication over organisational management, agora university publishing house, 2009. [2] d. goleman, emotional intelligence, translated by irina-margareta nistor, curtea veche publishg house, bucurești,2001. [3] levinson, d. j. (1959). role, personality, and social structure in the organizational setting. the journal of abnormal and social psychology, 58. agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 12 (2018) natural resources: an incentive or an obstacle to economic growth? rica ivan1, călin tănase ladar2 1 faculty of electrical engineering and information technology, university of oradea, str. universității, nr. 1, oradea, romania 2 faculty of environment protection, university of oradea, str. universității, nr. 1, oradea, romania e-mails rika_ivan2005@yahoo.com, ladarcalin@yahoo.com abstract this paper refers to the consequences of the presence of natural resources for countries endowed with such resources and the impact of such resources on their economy. it briefly describes the experience of some of these countries, presenting the success of those who benefited from these resources and the monetary, fiscal and exchange rate related aspects thereof. the concept of annuity initially refers to the remuneration related to ownership rights upon a limited resource. the paper provides an overview of situations that can influence the relation between natural resources, economic growth and some of the related key factors. keywords: economic growth, natural resources, budget revenues, royalties, governance. 1. introduction natural resources are paramount for economic growth. looking at the global context, there is no economic activity that can be carried out in the absence of raw materials. thus, the question that raises is to what extent the depletion of natural resources will slow economic growth? there are situations where some economies endowed with natural resources have experienced a rapid development pace (the united states); on the other hand, other countries like japan have developed while lacking resources. there are also many economies that have experienced a deterioration of their economic situation, such as venezuela. in this latter case, the specialists in this area talk about a “curse of natural resources”. the term “dutch disease” refers to the curse determined by the discovery of natural resources by a national economy. thus, in 1959, a rich gas field was discovered in the province of groningen, in the northern part of the netherlands, to which other reserves have been added discovered later in the rest of the country and in the north sea. the expression “dutch disease” appeared in the ’70s and refers to the fact that the country's macroeconomic performance is low despite (or even due to) obtaining royalties from energy resources. following the world economic crisis of 1973, because of the oil shock, the performance of the dutch economy deteriorated. in fact, economic growth was slowing down and unemployment was rising. the increase in exports of primary products is associated with a growing trade surplus, which in turn determines an appreciation of the national currency in the real exchange rate. this appreciation of a currency exchange rate acts against the competitiveness of the rest of the national economy sectors, which may, in some circumstances, lead to a deterioration in the macroeconomic performance of the economy. according to the recent theory of economic growth, the interaction of several sources of development plays an important role in achieving economic growth by a national economy. thus, the transformation of capital provided by natural resources into social and human capital to stimulate economic growth implies the presence of some quality institutions and governance. among the many ways to promote the efficiency of economic and social development, one of the finest is the accumulation of human capital through quality education, training and health systems. mailto:rika_ivan2005@yahoo.com mailto:ladarcalin@yahoo.com 2 capital is present in many different aspects and shapes, some tangible and others not, but in all its forms it must gradually accumulate through painful investments that are detrimental to immediate consumption. creating a strong capital base, expressed in a strengthened national wealth, requires many investments based on fair and sustainable decisions made in different areas. it is important to distinguish between two concepts, namely the abundance of natural resources and dependence on these resources. abundance characterizes the amount of natural capital in a country: ores, oil, forests, arable land, etc. dependency means the degree to which a particular country depends on these natural resources to support its economic activities. some countries benefit from abundant natural resources such as australia, canada and the united states, but do not owe their exclusive economic growth to such resources. other countries, which have abundant resources, such as the opec countries, are almost entirely dependent on them. other countries like chad and mali, which have little resources, depend on the revenue from selling exporting these resources because they do not produce anything else. other countries, which have few natural resources, do not depend on them, as is the case with jordan and panama. 2. the economic problems faced by countries rich in natural resources there are several ways of dealing with the management of natural resources that countries rich in such resources may adopt, namely: fiscal policy; monetary, financial and foreign exchange policy, underlining the important role of institutions and governance; the need to diversify their economy to get rid of the excessive dependence on a few resources. in the case of a developing country, abundant resources can be an asset, but it may be difficult to implement an effective fiscal policy. the authorities of the resource-rich countries face several problems, such as: their resources are generally non-renewable but exhaustible (nonsustainable), and exports are influenced by this shortcoming; the prices of exported raw materials are fluctuating and thus the budget income and revenues on which the authorities rely are subject to high fluctuations; countries have a limited capacity to produce long-term income forecasts and to set and implement efficient public investment projects. it is difficult to estimate how long a country's natural resources can bring revenue to the expected level. this estimate may be difficult because new deposits may be discovered, and technical progress may change the market value of natural resources by facilitating extraction or by increasing the quota that can be exploited. however, it is important to estimate the useful life of resources (e.g. more than 30 years) as their exhaustion should be a key parameter for tax policy evolution (siddharth tiwari et al., 2012). although the issue of sustainability is a concern for all countries, adjusting fiscal policy in the absence of resources is a less imminent concern when the depletion of these resources is still far away. the main concern is to manage revenue volatility linked to fluctuations in resource prices on the market. this is the case of saudi arabia and russia, which are countries with immense oil reserves and where the horizon of resource depletion is not foreseeable in the near future. on the other hand, countries such as cameroon and yemen, where oil reserves are limited and therefore have a shorter time horizon, should pay attention to how they will replace the revenue obtained from these resources to finance their public spending at least at the same level as today. the primary purpose of fiscal policy should be to obtain sufficient revenue to minimize revenue fluctuations. when a country' revenues are diminishing, the simplest solution, but also the least effective and damaging to a country's economy, is inflation. another way to prevent a country's income from falling is to levy new taxes and duties, but which reduce the incomes of households and businesses. in the case of the application of customs duties in order to cover the decrease of the incomes of a country, the trade relations can be diminished and, implicitly, there is a medium and long term economic downturn perspective. 3 in the case of direct taxes, employment and goods production are discouraged. sales taxes in particular affect low-income households, which spend most of their income to meet their basic needs and while their savings are little. countries with significant amounts of natural resources could increase their public revenues by increasing taxes on resources exploitation, relying on the argument that it is easier to tax the land than mobile production factors. applying royalties by the public authorities of a country for the permission to manage a stateowned resource is a better solution for obtaining public revenues. these revenues should be used to finance social productivity or to reduce other less efficient sources of income that could be a burden on the shoulders of domestic households or businesses. a sound budget governance requires attention to be paid both to the cost-sharing efficiency and to the mobilization of the revenue needed to finance such costs. managing the fluctuation of natural resource prices must be the core objective of countries where resource depletion is near and which rely on income from these resources. the leaders and decision-makers can adopt rules that take into account the fluctuation of resource prices from one year to the next. these rules set out indicators to determine the maximum limits of annual expenditure by reference to the average income that can be obtained. estimates of structural revenues are based on both a pricing and a production planning formula, taking into account past, current and future prices. pricing patterns vary from one country to another (philip daniel et al., 2013). mongolia, for example, uses a moving average of mineral resource prices over a period of 16 years (the prices of the last twelve years and forecasts for the current year and the next three years). past prices are weighted, thus ensuring the stability of the forecasts, while allowing for the gradual incorporation of future prices. mexico uses a 10 years weighted average of oil prices (with a weight of 25%), short-term contracts (with a 50% share but multiplied by a "prudent factor") and the medium term contract prices (with a weight of 25%). thus, a prudent fiscal policy implies that, when resource revenue is greater than estimated, the surplus has to be saved and not spent (“windfall gains”). similarly, the government can resort to previous financial savings when budget revenues are lower than expected. the budgetary frameworks of norway, east timor and papua new guinea are based on this method, which allows governments to adjust their spending to fluctuations in world commodity prices. in order to keep the budgetary framework under control, there is the solution to put aside resource incomes and to spend only the earnings generated by these economies (so-called annuities). by this method in norway, the state budget increases annually by about 4%, an amount derived from the revenues from oil exploitation. this method has been successful in norway, but it is not necessarily suitable for developing countries that need multi-level development. apart from the annuity method, another development method is the use of oil revenues to build production capacities in other areas, to improve the health and education systems for the benefit of its citizens, that is, human capital. in countries where infrastructure is lacking and human capital needs are high, the rate of return on productive public spending is likely to be much higher than the rate of return on financial assets. if revenues from the exploitation of natural resources are used to implement quality public projects, the latter can support economic growth and can therefore lead to an increase of income other than from natural resources. instead, poorly targeted spending can lead to the loss of the country's wellbeing and the welfare of future generations, thus hindering the country overall development. the efficiency of public investment depends on the ability to select, implement and evaluate projects that is the institutional stakeholders activating within an economy. thus, it is important to have efficient public finance management mechanisms that provide the most accurate forecasts of natural resource revenues, and which can lead to the adequate development of medium-term budgets. these mechanisms must manage cash flows and debt, be transparent in 4 obtaining and using revenue from resources (economic accounting, reporting and control). this process involves indicators to monitor the use of natural resources related wealth. two of these indicators are the investments quota in total public expenditure and the share of public investment relative to income from natural resources. the main priority for a developing country rich in natural resources should be budget transparency and good governance. public authorities have at their disposal different tax instruments and leverage to obtain income from their natural resources, namely: establishment of royalties, levy of specific taxes on the exploitation of natural resources, the participation of the state in the ownership of some national companies established for the exploitation of resources etc. there are various factors within the reach of authorities, which can influence the amount of income from the exploitation of natural resources, such as: the date/timeframe the government wants to collect revenue; the decision to obtain a higher share of income if prices rise; the ability to enforce and manage the taxes, etc. situations may vary from one country to another, but a policy combining charging royalties and a specific tax on high profits (additional to the traditional corporate tax) is advantageous for a developing country. this combination creates the opportunity to receive revenue from the very beginning of operation and to obtain additional public revenue in case of increased profit due to higher prices and/or lower costs. as mentioned above, when revenues from the exploitation of natural resources are higher than estimated than expected, this additional revenue should be saved. these savings could fuel special funds, known as sovereign wealth funds or stabilization funds. these funds must operate in addition to the other taxes and duties and should be integrated into the national budget cycle to allow countries to allocate resources efficiently when they set their priorities for spending. therefore, resource funds should not be invested with independent spending power. countries rich in natural resources can increase their public spending based on increased income from natural resources, provided that such revenue is efficiently and transparently used, and without jeopardising macroeconomic stability. 3. financial, monetary and exchange rates policies the management of natural resources is a challenge for financial and monetary policy. the most important problem is probably the so-called “dutch disease” caused by the discovery of natural gas deposits in the north sea and which has raised concerns about the deindustrialisation of the netherlands. the disturbances created by the overvaluation of the currency as a consequence of the increase in exports of natural resources could lead to the development of an economic sector to the detriment of others. there is also the risk of underdevelopment of high technology sectors and an increase in the share of extractive industries based on low qualification of employees. over-valuation of the exchange rate hit in export-oriented industries and stimulate increasing imports. the “dutch disease” can be determined by a massive flow of foreign direct investment into an economy. in the case of a developing country, the mass influx of foreign capital results in an appreciation or depreciation of the local currency, depending on the use of this new capital to funding or accumulating capital in certain economic sectors. a solution for healthy economic growth is diversification. diversification stimulates economic growth by focusing not only on economic activity linked to primary production, but also on secondary and tertiary production activities, thus facilitating the transfer of labour from lowpaid and low-skilled jobs in agriculture or mining, to better paid jobs which requiring more qualified staff. among the oil-exporting countries that have succeeded in diversifying their economies we mention malaysia, indonesia, chile and the united arab emirates. on the other hand, among the countries that failed to apply diversification there is nigeria, which should be envied in terms of oil resources in comparison with other oil producing countries, being the first oil producer in sub-saharan africa and the fifth opec producer after saudi arabia, 5 venezuela, iran and the united arab emirates. petrodollars account for 83% of federal revenue and over 95% of export earnings (imf, 2015). at present, this country’s economic structure is not diversified and it is largely dependent on the oil sector. venezuela is another country suffering from “dutch disease”, being the country with the largest proven oil reserves in the world. despite the wealth of oil deposits, the country does not have its own refinery and imports its fuel. a 96% of revenue comes from this resource, and more than 70% of consumer goods are imported, mainly food. mixed modern economies rely on a wide range of industries, businesses and services to provide citizens with a steady increase in their living standards. therefore, these economies must find ways to diversify at the expense of dominant agriculture or extractive industries that tend to hinder or delay the development of modern industries and services. another possibility is to invest part of the royalty earned from the extraction of natural resources on the international financial markets. the goal is not to increase too much the demand in the short term through voluntary sterilization, especially if the absorption capacity of the economy is limited even if the need for public investment is high (marie-pierre arzelier, 2016). this accumulation of savings in sovereign wealth funds is a widely used technique by countries such as saudi arabia, norway and kuwait. public authorities need a lot of will to resist the temptation to let the currency appreciate beyond the appropriate level, taking into account the popular political benefits of a strong exchange rate of their currency for households and businesses that depend on imported products. this is a powerful reason for the existence of independent but responsible central banks, protected by law from political pressures. there are oil producing countries that have succeeded in implementing an economic diversification strategy, using the establishment of a free trade area to promote foreign trade activities. an example of this is the experience in the united arab emirates. free trade areas offer many benefits to existing companies, including repatriation of capital and profits; exemption from corporation tax; elimination of customs duties on imported equipment. there are international institutions who have been involved in policy making for resource-rich developing countries i.e. the world bank has adopted a “value-chain approach” for natural resources management (nrm), with the main goal of prescribing an integrated strategy, to set-up feasible policies in order to convert the income from the exploitation of natural resources into results leading to sustainable development. the value chain includes a number of key factors of the nrm, namely: (1) sector organization and the award of contracts and licenses; (2) regulation and monitoring of operations; (3) collection of taxes and royalties; (4) revenue distribution and public investment management; and (5) implementation of a sustainable development policy system (naazneen h. barma et al., 2012). 4. state of play of natural resources management in romania according to a study conducted by deloitte (2018), the average royalty rate in romania in the oil and gas sector reached 17.4% in 2016 and dropped to 13.9% due to the tax on construction, while the average in the european states plummet to 8.8%. higher levels of royalties than in romania were recorded only in the netherlands, austria and hungary. from 2018 in romania, the formula to be used in the calculation of gross natural gas extraction will take into account the average price of the previous month. there are draft laws currently under debate on differentiating the tax regime applicable to onshore and offshore activities. worldwide there are three main types of agreements on the exploitation of hydrocarbon resources, namely: technical agreements, oil production sharing agreements and concession contracts. the conclusion of concession contracts applies in europe, including romania. concessions in romania last for a long time i.e. up to 30 years, with the possibility of extending up to 15 years. the beneficiary of the concession has full rights over oil and gas from the 6 deposits. in the energy sector romania needs a massive level of investment and technological upgrading. for romania, the fastest way to finance the energy sector is to create and maintain a favourable fiscal framework, based on a balanced return on investment and government tax collection. romania has certain strengths amid the change of the petroleum tax regime (mariana papatulică, 2014): the recently discovered offshore reserves at the black sea and the potential reserves of shale gas; the gradual liberalization of the domestic gas price; the presence of institutional framework and legislation adapted to resources management requirements at european level; completing interconnections through pipelines with western europe and neighbouring countries in the near future. romania has some weak points, such as: lack of national capital for investment; lack of consultation in the field of exploitation projects and negotiations conducted in this area; the fact that the tax regime concerning the renegotiation of hydrocarbons is in place at a time when there is no clear information about the actual amount of gas discovered either in the black sea or in the shale deposits. conclusions many developing countries rich in natural resources have failed in the adoption of a diversification policy and remain totally dependent on their extractive industry. on the other hand, other countries such as indonesia, malaysia, and the united arab emirates have managed to escape the trap of having rich natural resource by diversifying the structures of their economies and implementing funds that are key to achieving economic growth and development of these countries. natural resources cannot per se be a curse for the countries they own, and it is only the management policy of these resources and related revenues that can influence positively or negatively their economy. the impact of natural resources varies according to the country’s regulatory bodies and institutional arrangements, the way the capital thus obtained is used, and the adoption of healthy not predatory economic behaviours. references [1] boschini d., pettersson j., roine j. (2003). resource curse or not: a question of appropriability. sse/efi working paper series in economics and finance, no 534. [2] torvik r. (2009). why do some resource-abundant countries succeed while others do not? oxford review of economic policy, volume 25, number 2, 2009, pp.241-256. [3] melhum h., moene k., torvik r. (2005), cursed by resources or institutions? world economy, aug.2005 [4] thorvaldur gylfason (2010) la possession de ressources naturelles est-ellevraiment un privilège? ressources naturelles, finances et développement, banque centrale d’algérie, nov. 2010 [5] siddharth tiwari, carlo cottarelli, olivier blanchard, antoinette m. sayeh, and josé viñals (2012) macroeconomic policy frameworks for resource-rich developing countries—background paper 1, august 24, 2012, imf [6] naazneen h. barma, kai kaiser, tuan minh le, lorena viñuela (2012), rents to riches? the political economy of natural resource–led development, the world bank [7] philip daniel, sanjeev gupta, todd mattina et alex segura-ubiergo (2013), la rente des ressources naturelles, finances & développement septembre 2013, imf [8] mariana papatulică (2014), international petroleum fiscal regimes: trends in tax-royalty worldwide and in romania, institute for world economy of the romanian academy, vol. 2(1), pages 129-140, may 2014. [9] aggab nadia, ait elhadj fatima (2015), ressources naturelles et risque d’un syndrome hollandais : cas de l’économie algérienne, mémoire de master en sciences économiques du université abderrahmane mira de bejaia [10] marie-pierre arzelier (2016), les modèles de syndrome hollandais. analyse et perspectives de recherché, université de lorraine, iae de metz, presses de l’ifpo, 2016 [11] cepa (2016), romania’s energy crossroads. strategic options for improving energy security, march 2016, center for european policy analysis, washington, dc [12] delloite (2018), o imagine de ansamblu asupra redevențelor și impozitelor similare, aprilie 2018 https://www2.deloitte.com/ro https://www2.deloitte.com/ro medimond template agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 14 (2020) accounting of public institutions component of general accounting and especially of public accounting cristina antik1 1 faculty of juridical and administrative sciences, agora university of oradea e-mail antikcristina@yahoo.com abstract public accounting is the accounting that ensures the highlighting of all collection and payment operations related to public funds. it assesses the obligations of taxpayers, highlights the receipts from these obligations and determines the differences from the unfulfilled obligations, as well as the responsibility of the authorizing officers regarding the making of payments from public funds. its organization is mandatory for all public authorities, territorial communities, national and local public institutions. keywords: public, institutions, accounting, obligations. 1 introduction vincent raude and jean claude pagat1 retain for public accounting several definitions, one usual, another technical and the third administrative. thus, the usual definition formulates it as: “the set of rules applicable to the management of state revenues”, the technical one “rules for presenting public accounts”, and the administrative one considers public tasks and defines it as “public accounting rules are in at the same time rules for presenting the accounts and rules for organizing the services of public accountants”. the shortcomings of these definitions consist in the fact that the usual one refers only to state revenues and does not consider a legal basis, the technical one is too limited, and the administrative one does not refer to authorizing officers. finally, the authors we referred to, propose for public accounting the following definition that would express, in our opinion, its functions most correctly, namely: of public revenue officers and public accountants. " this definition gives the rules of public accounting a legal, technical outline and includes within it the obligations and responsibilities of both public accountants and authorizing officers. 2 rules and norms of public accounting although public sector accounting is organized on the basis of separate plans of accounts, with particularities, both in terms of the structure of accounts and their operation, the basis of public accounting are common rules and regulations with those of general accounting, namely:  the use of models of accounting registers and common forms regarding the financial and accounting activity;  the models of the balance sheets, as well as the general chart of accounts for the public institutions, are established by the same body, respectively by the ministry of public finance; 1 vincent raude şi jean claude pagat – “cours sur les règles de la comptabilitè publique”, école nationale des services du trésor, paris, 1991, pag. 3-6 mailto:antikcristina@yahoo.com in this respect there is a unitary conception in the matter (chart of accounts, balance sheet and other specific forms);  its operation is mandatory according to the same rules and methods as follows: • accounting is conducted in double entry; some exceptions allowed for certain public institutions that have the right to organize one-off accounting (local communal councils) do not invalidate the rule; • chronological and systematic recording in accounting of all collection and payment operations simultaneously, in the debit of some accounts and the credit of others; • establishing the total debit and credit amounts, as well as the final balance of each account; • drawing up, at least monthly, the checking balance, which reflects the equality between the total debit and credit amounts, and the total debit and credit balances of the accounts; • presentation of the final monthly, quarterly, annual execution, of the revenues collected and of the payments made, as well as of the surplus or deficit, compared to the profit and loss account, in the case of financial accounting. as in the case of general (financial) accounting, public accounting must ensure a true picture, regarding the situation of execution of the consolidated general budget, of the information necessary for the own needs of public institutions, as well as regarding their provision to law enforcement bodies. , with prerogatives in the matter. in this respect, public accounting must comply, in good faith, with the generally valid unitary rules and regulations of general accounting, as well as its principles, namely:  the principle of prudence, which does not allow the underestimation of revenues and overestimation of expenditures, both in the process of drawing up budgets and in the execution process especially. this principle in public accounting must be manifested especially in terms of the correct assessment and registration of budgetary rights that public institutions have.  the principle of permanence of the methods, which imposes the continuity of the rules and norms regarding the way of evaluating the revenues and the criteria for establishing the budgetary credits, ensuring the comparability in time of the information regarding the structure of the budgets;  the principle of continuity of activity, which, in the case of public accounting, determines its existence as long as there is a public sector, and it will exist as long as there is a state organization. in this direction we could mention, possibly, about a development of the attributions of the public accounting, with the expansion of the public sector, whose public expenses, of the relation between them and the gross domestic product, have increased in the last century almost five times;  the principle of independence of the exercise, which determines the beginning of the budget execution at a certain date, its conclusion at another precise date and, consequently, of the non-admission that during this period to register incomes and to make expenses belonging to other exercises. we could also call this principle of “adaptability of accounting information to the budget execution system used”, “management” or “exercise”. in this regard, the public sector has adopted the system according to which there is an annual record of budget appropriations, cash payments and receipts to the state budget, the state social insurance budget and local budgets. this system imposes the validity of budget appropriations opened and distributed only within the respective budget year; also, cash payments can be made only within the limit and within the term of validity of the credits. on the revenue side, only those receipts that are collected during the financial-budgetary year are valid, and those collected after december 31 are highlighted for the following financial year;  the principle of non-compensation, which in public accounting finds its widest expression in that no payments can be made directly from receipts, all revenues are recorded in the budget, and for any expenditure that is made there is an obligation of approval. some exceptions to this rule, especially in the case of extra-budgetary and special funds, do not invalidate the general principle;  the principle of intangibility of the opening balance sheet is applied only partially in the situation of public accounting, because, in the case of public funds, the incomes due to the current year, but collected in the next year, are registered as income in the year in which they were collected. also, the funds approved by the annual budgets and not used in that year lose their validity at the end of the year. only in the case of certain budgets, such as those in extrabudgetary means and special funds, which have the right to carry over the execution balance from the previous year, could we talk about a certain intangibility of the opening balance sheet;  also, as in the case of patrimonial units, where the responsibility for organizing and keeping the accounts, in accordance with the law, is the administrator, and in the case of public institutions the responsibility, from this point of view, rests with the authorizing officer (ministers, heads of institutions public, central and local, etc.) compared to the rules enunciated, in connection with the functioning of public accounting in romania, the authors we referred to earlier, vincent raude and jean claude pagat, in the same paper mention the following fundamental principles of french public accounting: “the principle of distinction between opportunity and regularity; of the distinction between authorizing officers and accountants, and of not affecting the receipts and expenses ”. to these three basic principles could be added: "the principle of responsibility (for authorizing officers and accountants) and of unity (regulatory unit, ability to handle accounts, treasury unit)". apart from the beauty of defining the principle of unity, we retain the principle of distinguishing between regularity and opportunity, which in our literature is not addressed. some similarities and parallels between public and general (financial) accounting are also in terms of balance sheet. if in the case of patrimonial units the balance sheet consists of the balance sheet, profit and loss account, and as an annex the management report, in the case of public institutions it consists of: balance sheet, with the necessary adaptations, the execution account, and instead of the profit and loss, and an explanatory report as an annex. regarding the balance sheet, which is not subject to verification and certification by auditors, accounting experts, etc., or in the case of patrimonial units the execution account on the state budget, state social insurance budget and local budgets, must be approved by the same bodies which approved the respective budgets, and in the case of public institutions to be audited. of course, there are similarities between the organization and accounting of public institutions and financial accounting, but also significant differences, namely: the chart of accounts of public institutions contains accounts specific to these units, but there are some accounts, both as name and and as content, which resembles the accounts in the general chart of accounts. for example, the “house” account in the chart of accounts of public institutions with the “house” account in the general chart of accounts. we distinguish some similarities by content and function, especially between the accounts in the general chart of accounts and that of the public institutions, such as: class 2, 21 “property, plant and equipment” in the general chart of accounts, with the accounts in class 0, 01 “fixed assets” in the chart of accounts for public institutions; account 51 “accounts with banks” from the general chart of accounts, with account 10, account 11 “cash”, “available from special purpose funds” from the chart of accounts of budgetary institutions; class 6 “expenditure accounts” from the general chart of accounts, with class 4, account 41 “expenditures of institutions” from the chart of accounts of public institutions, which through their debit or credit register the same economic phenomena, and the balances express the same content. although the chart of accounts of public institutions is common to all public institutions presented by the components of the general consolidated budget, between the accounts reflecting the financing system of public institutions, financed on the one hand by the state budget and local budgets on the other hand, there are important differences. , especially regarding the highlighting of the constitution of the public resources through which they are financed, as well as the conditions that must be fulfilled regarding the ceiling up to which cash payments can be made. also, there are essential differences between the way of closing the accounts of expenses at public institutions financed from budgetary funds and those financed from extra-budgetary means. if, for the former, the expenditure accounts are closed through the financing accounts, in the case of institutions financed from extra-budgetary (self-financed) means their closure is done through profit and loss accounts, through which, moreover, the income accounts are closed, more close to that of financial accounting. an essential difference in the case of accounting of public institutions compared to the financial accounting of economic agents is the fact that the value of fixed assets and inventory items, in the case of public institutions, is recorded directly on expenses when purchasing them. in the case of public institutions we do not encounter the notions of wear and tear and depreciation of fixed assets or inventory items, as in the case of accounting of economic agents. therefore, the actual expenses in the case of public institutions, in most cases, do not correctly reflect the effort of society in connection with the maintenance or operation of a certain social-public indicator, pupil, student, hospital bed, military, etc. also, due to the specifics regarding the financing of public institutions in their accounting, in addition to the notions of actual expenses as in the case of economic agents we also find the notions of cash payments and net cash payments, whose level is determined by financing accounts, which only coincidentally coincide at the end of the budget year with the actual expenditure accounts. at the same time, there are differences between the expenditure accounts mentioned in the chart of accounts of public institutions, on the one hand, and the expenditure accounts in the general chart of accounts and the state treasury, on the other. the accounting of the state treasury reflects the net cash payments, and not the actual expenses, as long as the expense accounts of economic agents and public institutions always reflect only the actual consumptions (salary payments, actual consumptions of materials, etc.) once the budget law has established the volume and structure of public resources to be mobilized, a major component of the process of their formation is that of the means and methods to ensure their collection, but especially their efficient management. in this context, an important role is played by public institutions through which the process of setting up and using the main public resources of the state takes place. in the process of establishing public resources, the public institutions of prime importance, as special authorities of the state, are represented by the ministry of public finance and the ministry of labor and social solidarity, and their territorial bodies. in fact, other ministries and central bodies, as well as their territorial bodies, have a significant role in the process of setting up public resources, especially in terms of setting up financial resources from extra-budgetary means. if in the process of establishing public resources there are two public institutions that play a major role in this process, namely the ministry of public finance and the ministry of labor and social solidarity and their territorial bodies, however, the process of using public funds is carried out equally through all central and local public institutions, which makes their role and importance, and primarily their responsibility, in terms of their high effective use. in exercising the attributions regarding the management of public funds, maintaining a permanent balance between the inflows and outflows of resources is the keystone of the attribute of the competent public institutions of the state, the ministry of public finance, first of all, in establishing and administering public funds. once this "transfer of purchasing power" from individuals and legal entities to state authorities, through mandatory levies from taxes, fees, etc., the second basic component, and just as important of the state function, is management, allocation. these huge financial resources to various beneficiaries public institutions, enterprises, population (directly and indirectly). the way in which, at every stage of its development, the state manages to prioritize, to sort out social and economic needs, depends the further development of the economy, and on this basis of an effective social protection. the centralized financial resources available to the state, through the components of the general consolidated budget, have as main destination the financing of the “public sector”, which, according to prof. gheorghe manolescu2 is defined as follows: “in this sense, it can be admitted that the public sector or the state as an economic agent) includes the set of activities, institutions and bodies characterized by collective or political decision-making processes, within which the election procedures are carried out through the voting mechanism”. the main "consumer" of these public funds is, therefore, the public sector through its institutions. public institutions a category that includes the parliament, the romanian presidency, the government, ministries, the judiciary and other specialized bodies of the central and local public administration, ensure the financial resources necessary to finance expenditures, regarding their maintenance and operation, in the largest partly, at the expense of the state budget and local budgets. in this context, they have the obligation that all payment and collection operations be carried out only through the state treasury, whose activity is carried out under the state guarantee. public institutions therefore represent the public units through which the state exercises and fulfills its functions and services in the economic, social-cultural, defense, public order, administrative, etc. fields. they can be of central importance, such as: the parliament, the romanian presidency, the government, the ministries and other institutions of the autonomous and local central administration. the local public institutions comprising the authorities of the administrative-territorial units, the county, municipal, city and communal councils, the public institutions and the public services with legal personality, regardless of the way of financing their activity. as a financing system, public institutions can be: • financed entirely from budgetary revenues, a situation in which the revenues they realize have the obligation to pay them, in full, to the budget from which they are financed; • financed from extra-budgetary means (own revenues), with supplementation from budgetary funds, in the form of subsidies or budgetary transfers (state budget or local budgets). in this situation, the own revenues generated by the institutions in question are retained for selffinancing, and those not used at the end of the year are distributed for the following year. • financed entirely from extra-budgetary means, situation in which also their balance from the end of the period is carried forward for the next financial year; • financed entirely from special funds. their balance at the end of the period shall also be carried forward to the following financial year; in this context, public institutions have characteristics that distinguish them from patrimonial legal entities, and especially from economic agents as follows: 2 gheorghe manolescu – “buget-abordare economică şi financiară”, editura economică, pag.17 a) there are bodies through which the state exercises its role, attributions and functions in the administrative, social-cultural, defense, public order, national security, justice, social and economic assistance fields; b) there are bodies that generally do not carry out productive activities, through which to realize material goods, they produce social, administrative, justice, public order, defense utilities. only by chance, their subunits can realize and produce utilities and services of an economic nature, a situation in which, however, they are subject to the rules and principles according to which private finances operate on financing, and the correlation of the state budget of economic agents. c) depending on their method of financing entirely from budgetary resources or partially, entirely from budgetary means or special funds their own revenues are paid in full to the budget from which they are financed or carried over to the following year. d) in general, they do not have indicators of profitability and economic efficiency, but indicators of social, educational, cultural efficiency, etc. can be calculated for them. since, however, the value of fixed assets and inventory items is spent on their procurement, the efficiency indicators that are calculated are largely distorted. e) public institutions do not calculate and record the wear of inventory items or the depreciation of fixed assets gradually, but only once, when purchasing them. f) it finances its activity on the basis of revenue and expenditure budgets or only on the basis of expenditure budgets. 2.1 classification of public institutions the text included in the sections or subsections must begin one line after the section or subsection title. do not use hard tabs and limit the use of hard returns to one return at the end of a paragraph. please, do not number manually the sections and subsections; the template will do it automatically. 2.1.1 by their activity importance according to the importance of their activity and their subordination, the public institutions are grouped in: 1) institutions of the central public administration; 2) local public administration institutions. 1) the institutions of the central public administration include: the presidency of romania, the parliament, the government, the ministries and the other specialized central authorities of the central public administration and the territorial institutions under their subordination. 2) the institutions of the local public administration include: the institutions of the local public administration, formed by the territorial administrative units, and include the communes, cities and counties, as well as the public units subordinated to them. the public administration authorities through which local autonomy is achieved in communes and cities are the elected local councils and the mayors elected in accordance with the law. the decentralized public services of the ministries at county level include, for example: general directorates of public finance; county and bucharest school inspectorates; county departments of labor and social solidarity; county sanitary directorates; county council of culture etc. the heads of public, central and local institutions, depending on the rights conferred by law in connection with the approval, distribution and use of budgetary funds, are called authorizing officers. vincent raude and jean claude pagat, in their book, quote g. devaux, who gives the definition of authorizing officer: , finds, liquidates a receivable or to order either the collection of a receivable or the payment of a debt ”. we notice from the definition given by g. devaux that the authorizing officers are not attached to the notion of receipts and expenses, but to the notion of “receivables” and “debts”. the specialized materials and the romanian regulations define the authorizing officer as: “head of a budgetary institution, central or local, who has the right to dispose of the budgetary credits approved by the income and expenditure plan of the institution”. the same rights and obligations, arising from the definition given by the explanatory dictionary, result from the specialized materials and the romanian regulations in the matter, which specify that “the main credit officers of the state budget, state social insurance budget and special funds budgets are the heads of ministers and leaders of the other specialized bodies of the central public administration”. in the case of the local public administration authorities, the main credit officers are the mayors of the local councils, the general mayor of bucharest and the presidents of the county councils. 2.1.2 by romanian regulations ii. in accordance with romanian regulations, public institutions are divided into: 1) hierarchically superior institutions, whose leaders have the quality of main credit officers; 2) subordinated institutions, whose leaders have the quality of secondary and tertiary credit officers. the main authorizing officers receive the financing resources directly from the budget, for their own needs, as well as for those of the subordinated institutions, which they then distribute to them. there are also situations when some public institutions, whose leaders have the quality of secondary authorizing officers, are in a relationship of subordination to the main authorizing officers and hierarchically superior to the tertiary authorizing officers. these authorizing officers do not have a direct relationship with the state budget, but from the credits received from the main authorizing officers they distribute budgetary means to the tertiary authorizing officers under their subordination. the same authors, vincent raude and jean claude pagat, note that authorizing officers are subdivided, as in the case of accountants, into "principal, secondary, proxies and deputies and enforcement agents", but only principal and secondary authorizing officers have the legal status of authorizing officers. another classification, according to the same authors, is that of "elected officers" and "appointed officers", the elected having a political responsibility. compared to the way in which the romanian legislation regulated the status of authorizing officers, especially in terms of their responsibilities and rights, in the french literature we find increased attributions and rights for authorizing officers in france, in terms of collecting budget receivables. among their attributions in the issue of receipts we mention: “they order the execution of receipts, ascertain the rights of the bodies, liquidate the receipts, issue receipts orders intended to ensure the receipts, notify these orders to the accountants in charge of receipts”. to which responsibilities, in the line of revenue collection of french public officials, in our country they have established tasks and responsibilities in this line, less precise, the regulations in the field emphasizing, in particular, their rights and obligations regarding employment and performance. of expenses. thus, the attributions are the following: “the use of budgetary credits; income generation; efficient and effective use of the amounts received from the budget (state, state social insurance, special, local funds); the integrity of the assets entrusted to the unit he leads; organizing and keeping the accounts up to date ”. although the law provides for the main authorizing officer and obligations regarding the realization of revenues, in practice this task is taken over by the tax authorities. central and local public institutions are financed from the budget or from special funds or from extra-budgetary means, based on the budgets of revenues and expenditures drawn up and approved each year according to the legal norms in force. in the case of local budgets, special and extra-budgetary funds include, on the one hand, revenues and, on the other hand, approved budget appropriations per year, quarters, broken down by subdivisions of the budget classification, within which authorizing officers may make payments. in the case of central public institutions, their budgets include only the provisions from the expenditure side, respectively the budgetary credits. 2.1.3 by their legal statute iii. from the point of view of the legal statute, public institutions can be classified into: 1) public institutions with legal personality; 2) public institutions without legal personality. 1) the public institutions with legal personality are those whose leaders have the quality of authorizing officers, quality in which they have the right to decide in hiring and making expenses. 2) public institutions without legal personality are those whose managers do not have the quality of authorizing officers, in which case they can make expenses only within the amounts actually transferred by their authorizing officer in sub-accounts opened in their name. 3 conclusions in conclusion, public accounting, and first of all that of public institutions, is similar in many respects to general accounting, a resemblance determined mainly by the rules and principles of accounting in general, but has many essential differences determined by the specific functioning of public institutions. regarding the way in which they highlight the establishment of public revenues and the execution of expenditures, but especially of their way of closing at the end of the financial-budgetary year. references [1] o. bojianu, contabilitate generala, ed. eficient 1998. [2] n. feleaga, i, ionascu, tratat de contabilitate financiara. vol i-ii, ed. economica [3] i.oprean, intocmirea sau auditarea bilantului contabil, ed. intercredo 1997 [4] m. ristea, c, cucu, c lazarescu, contabilitatea intreprinderii, ed. margaritar 1997 [5] m.ristea, v. raileanu, l. olivuid, i. misulescu, a. stoian, contabilitatea si fiscalitatea intreprinderii, ed. tribuna economica 1995 [6] m. ristea, v. raileanu, l. olivuid, i. misulescu, a. stoian, contabilitatea societatilor comerciale, vol iii, ed. cecar bucuresti 1996 [7] g. vintila, diagnosticul financiar si evaluarea intreprinderilor, ed didactica si pedagogica bucuresti 1998 [8] v. voica, contabilitatea financiara a agentilor economici, editata de centrul de management 1996. 25 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 16 (2022) perspectives of the modification of the tax burden in the hotel and restoration industry, in the context of tax pressure generated by geo no. 16/2022 răzvan-lucian vonea1, 1faculty of economic sciences, agora university of oradea, oradea, romania e-mail vonea_razvan@yahoo.com abstract the proposed article sets out the tax burden on economic entities operating in the hospitality industry in terms of income taxation. we have presented theoretical legislative aspects regarding the specific tax trim, which remains in its full action until the end of the financial year 2022, but also illustrative examples that provide accurate information on the fiscal pressure felt by these economic operators. the prospect of increasing tax pressure in this industry is becoming clearer, following the amendment of the primary legislation in the field of taxation of these economic operators. thus, the idea of applying the tax specific to these activities is abandoned by shifting to another form of income tax. keywords: hospitality industry, specific tax, microenterprise income tax versus corporate tax, tax burden, tax pressure. 1. introduction horeca is a sector of the national economy that expresses an abbreviation for 3 words hotels, restaurants and cafes (catering), being most widely used in europe, namely in scandinavia (sweden, norway, denmark, iceland and finland), the benelux countries (netherlands, belgium and luxembourg) and france. this term is used in the hospitality industry to convey very clearly an activity that simultaneously refers to accommodation and catering (food and drink) services. starting from 2017, according to law no. 170/2016, romanian legal entities paying profit tax that carry out accommodation and catering activities are obliged to pay the specific tax. in this sense, on april 14, 2017, the order of the minister of tourism and the minister of public finances no. 264/464 for the approval of the methodological rules for the application of this law. the purpose of this article is to present this type of tax applied to entities in the horeca sector, whose existence ends on 31.12.2022, according to the provisions of geo no. 16/2022 amending the fiscal code, and replaces it with the profit tax or the income of microenterprises. also, some illustrative examples are presented from which we can draw certain opinions regarding the change in the tax burdens of entities in the hospitality industry. 2. materials and methos studying the fiscal behavior of economic operators operating in the hospitality industry is a concern for us, given the implications it propagates for the romanian citizen's leisure options. a field strongly affected by the pandemic period, the hospitality industry recorded a decrease in turnover in 2020 compared to 2019 by 35% in relative terms, and in value terms from 27.5 billion in 2019 to 17.9 billion in 2020; the number of employees in hotels and restaurants decreased in 2020 compared to 2019 mailto:vonea_razvan@yahoo.com 26 from 186,000 lei to 150,000 employees; the net profit recorded by companies in the horeca industry that are in surplus decreased by 46.5% to 2.49 billion lei in 2020, compared to 4.65 billion lei in 2019. but not only the horeca industry itself is relevant in this analysis; its interconnection with other economic activities gives it a significant contribution to the evolution of some companies that develop businesses in related fields, such as agriculture, local suppliers of ingredients, producers and distributors of raw materials in the kitchen, importers and distributors of food products, dedicated service providers industry, as well as management systems, cleaning, transport, logistics, packaging. taxation constitutes the set of obligations to the tax office, as well as the means of collecting them, the regulations and practices relative to them. the immediate effect of the action of taxation is the encumbrance of the income of the payers, and from this perspective taxation creates constraint, pressure, sacrifice for them. the tax is a form of forced collection at the disposal of the state, without direct consideration and with a non-refundable title, of a part of the income or wealth of natural and/or legal persons, in order to cover some public needs. the documentary material we have referred to is the primary legislation we have regarding the direct taxation of the hospitality industry. this legislative package includes: law no. 170/2016 regarding the specific tax for certain activities; the fiscal code approved by law no. 227/2015; omt no. 264/464/2016 for the approval of the methodological norms for the application of law no. 170/2016 regarding the specific tax of certain activities1; the methods used by us to capture the fiscal pressure created on economic operators in the hospitality industry sector are descriptive and quantitative, relevant in this regard being the indicators of fiscal pressure. we have also used the method of analysis and comparison, given the change in the taxation system in the hospitality industry sector, through which we will analyze and compare the taxes owed today against those that will follow starting from the financial year 2023. the tax legislation that currently governs the taxation of earnings in the hospitality industry is law no. 170/2016 regarding the specific tax. it falls under the scope of the hospitality industry: 1 publicat în m.o. nr. 266 din 14 aprilie 2017; specific tax 01.01.2017 – 31.12.2022 conditions: 1. to have one of the caen codes listed below inscribed in the constitutive act; 2. not to be in liquidation procedures, according to the law caen 27 5510 "hotels and other similar accommodation facilities" 5520 "accommodation facilities for holidays and short periods" 5530 "caravan parks, campsites and camps" 5590 "other accommodation services" 5610 "restaurants" 5621 "food activities (catering) for events" 5629 "other food services" 5630 "bars and other activities serving drinks" the following criteria were taken into account when establishing the taxable matter: a. useful commercial/serving area for caen codes 5610 "restaurants" and 5630 "bars and other restaurant service activities", defined as the sum of the areas of lounges, terraces and summer gardens, according to the classification/authorization certificate; b. the useful area for carrying out the activity specific to caen codes 5621 "food activities (catering) for events", 5629 "other food services n.e.c.", defined as the total built area, according to the classification/authorization certificate. determination of tax for restaurants payers: restaurants, catering, other public food services calculation formula: unde: k = 1400, valoarea impozitului standard (lei); x = variabilă în funcție de rangul localității; y = variabilă în funcție de suprafața utilă comercială de desfășurare a activității; z = coeficient de sezonalitate; q = 0,9 și reprezintă coeficient de ajustare pentru spațiu tehnic. table no. 1. seasonality coefficients and the locality rank variable for a restaurant seasonality coefficient– z bucurești, brașov, cluj-napoca, craiova, iași, constanța, ploiești, sibiu, timișoara 0,45 towns, cities 0,35 tourist resorts of national interest 0,3 villages, communes and tourist resorts of local interest 0,1 variable according to the rank of the locality x bucurești zona a 17,0 zona b 16,0 zona c 15,0 isa/unitate = k x (x + y x q) x z https://www.flickr.com/photos/phil_fry/6897803087/ https://creativecommons.org/licenses/by-nc-nd/3.0/ https://creativecommons.org/licenses/by-nc-nd/3.0/ https://www.sgfoodonfoot.com/2017/05/jade-restaurant-fullerton-hotel.html https://creativecommons.org/licenses/by-nc-nd/3.0/ https://www.vedeteblog.com/2018/11/top-instagram-locuri-de-iesit-din.html https://creativecommons.org/licenses/by-nc-nd/3.0/ https://creativecommons.org/licenses/by-nc-nd/3.0/ 28 zona d 13,5 8 poli (brașov, cluj-napoca, constanța, craiova, iași, ploiești, sibiu, timișoara) zona a 15,0 zona b 14,0 zona c 13,0 zona d 11,5 towns zona a 13,0 zona b 11,0 zona c 9,0 zona d 7,0 cities 5,0 resorts 5,0 commune 3,0 table no. 2. the variable usable area for a restaurant the area between variable depending on the useful area of the location ("y" variable) 0 mp – 30 mp 2,0 31 mp – 50 mp 7,0 51 mp – 70 mp 12,0 71 mp – 90 mp 16,0 91 mp – 120 mp 21,0 121 mp – 160 mp 29,0 161 mp – 200 mp 38,0 201 mp – 240 mp 47,0 241 mp – 300 mp 58,0 301 mp – 400 mp 75,0 401 mp – 500 mp 80,0 501 mp – 600 mp 85,0 601 mp – 700 mp 90,0 701 mp – 800 mp 95,0 peste 801 mp 105,0 determination of tax for bars and other activities serving drinks payers: restaurants, catering, other public food services calculation formula: unde: k = 900, valoarea impozitului standard (lei); x = variabilă în funcție de rangul localității; y = variabilă în funcție de suprafața utilă comercială/de servire/de desfășurare a activității; z = coeficient de sezonalitate; q = 0,9 și reprezintă coeficient de ajustare pentru spațiu. table no. 3. seasonality coefficients and the locality rank variable for a bar seasonality coefficient– z bucurești, brașov, clujnapoca, craiova, iași, constanța, ploiești, sibiu, timișoara 0,45 towns, cities 0,35 tourist resorts of national interest 0,3 villages, communes and tourist resorts of local interest 0,1 the variable depending on the rank of the locality x isa/unitate = k x (x + y x q) x z 29 bucurești zona a 16,0 zona b 15,0 zona c 14,0 zona d 12,5 8 poli (brașov, cluj-napoca, constanța, craiova, iași, ploiești, sibiu, timișoara) zona a 14,0 zona b 13,0 zona c 12,0 zona d 11,0 town zona a 12,5 zona b 10,0 zona c 8,0 zona d 4,0 city 2,0 resorts 2,0 commune 0,4 table no. 4. the useful surface variable for a bar the area between variable depending on the useful area of the location ("y" variable) 0 mp – 30 mp 2,0 31 mp – 50 mp 4,0 51 mp – 70 mp 6,0 71 mp – 90 mp 8,0 91 mp – 120 mp 10,0 121 mp – 160 mp 14,0 161 mp – 200 mp 16,0 201 mp – 240 mp 18,0 241 mp – 300 mp 20,0 301 mp – 400 mp 25,0 401 mp – 500 mp 30,0 501 mp – 600 mp 40,0 601 mp – 700 mp 50,0 701 mp – 800 mp 60,0 801 mp – 900 mp 70,0 901 mp – 1000 mp 80,0 peste 1001 mp 90,0 the annual standard tax per unit is established by law, per type of unit, and is the basis for determining the specific tax owed by these units, according to a calculation formula: standard tax restaurants 1500 lei/year bars 900 lei/year hotels depending on the classification 30 the legislation applicable to this sector starting from 01.01.2023 abolishes the specific tax and gives the possibility to economic operators in the hospitality industry to submit either to the rules of the income tax of micro-enterprises or to the rules of the profit tax. the microenterprise income tax is 1% for microenterprises that have one or more employees. however, economic operators in the hospitality industry do not have to meet the requirement regarding the number of employees, nor the requirement to have a turnover of less than 500,000 euros/year.2. determining the tax on the income of micro-enterprises payers: micro-enterprises, which meet the conditions stipulated by the definition of microenterprises, from art. 47 para. (1) from the fiscal code. tax rate: 1% taxable base: income from any source, except those provided by art. 53, para. (1) of the fiscal code calculation formula: deadline: this tax is calculated and paid quarterly to the state budget, no later than the 25th of the month following each quarter. determination of profit tax payers: taxpayers provided for in art. 13, para. (1) and para. (2) fiscal code. tax rate: 16% taxable base: taxable profit formulă de calcul: unde: vt = venituri totale; ct = cheltuieli totale; cn = cheltuieli nedeductibile; vn = venituri neimpozabiile pri = profit fiscal impozabil ipr = impozit pe profit starting from this fiscal-accounting information, we notice that we are dealing with 2 different economic categories: profit and income. in the accounting sense, revenues are flows generated from the operating and financial activity of a company, and profit denotes a 2 art. 47, alin. (1), lit. c) și alin. (2) din legea nr. 227/2015; iv = vt x 1% profit contabil profit fiscal vt ct vt ct + cn -vn ipr = pri x 16% 31 result that remains after deducting from revenues the costs incurred to obtain those revenues. it follows that starting from 01.01.2023, economic operators in the hospitality industry will have to pay attention to the amount of income or profits, as these become the taxable bases for determining their tax burden. in the specialized literature, the fiscal pressure is calculated as the ratio between the taxes and contributions due and the amount of gdp. regarding our study, we will calculate and analyze the fiscal pressure borne by economic operators in the hospitality industry by referring to the company's turnover, a parameter that most faithfully expresses the volume of the company's activity, in gross form. using this indicator, we will capture how much an enterprise allocates from its turnover to paying tax and we will do this by comparing specific, income and profit tax. 3. results and discussions under the conditions of applying the specific tax, in the case of restaurants, it will have the following values, with an example for a restaurant with an area of 130 square meters: table no. 5. the specific tax for a restaurant restaurant location specific tax for a restaurant commune/village 1400 x (3 + 29x0,9) x 0,1 = 4 074 lei resorts 1400 x (5 + 29x0,9) x 0,3 = 13 062 lei municipality area a 1400 x (13 + 29x0,9) x 0,35 = 19 159 lei brașov area a 1400 x (15 + 29x0,9) x 0,45 = 28 893 lei in the case of a bar, cafe, with an area of 120 square meters, the annual specific tax due is calculated as follows: table no. 6. the specific tax for a bar bar/cafe location specific tax for a bar / cafe commune/village 900 x (0,4 + 10x0,9) x 0,1 = 846 lei resorts 900 x (2 + 10x0,9) x 0,3 = 2970 lei municipality area a 900 x (12,5 + 10x0,9) x 0,35 = 6772 lei brașov area a 900 x (14 + 10x0,9) x 0,45 = 9315 lei let's take as an example a restaurant in zone a which, starting from 01.01.2023, has to choose between the profit tax and the tax on the income of micro-enterprises; case: a restaurant presents the following accounting information for the first quarter of 2023; we will determine how much this restaurant would pay to the state budget if it chose the profit tax system or the income tax system: table no. 7. example of tax calculation at a restaurant, after 01.01.2023 restaurant accounting quantities abbreviations profit tax micro income tax total income vt 100.000 100.000 total expenses ct 40.000 40.000 taxable accounting profit pri 60.000 60.000 tax due id 9.600 1.000 lei fiscal pressure prf 9,6% 1% calcule: 32 pri = vt – ct = 100 000 – 40 000 = 60 000 lei ipr = pri x 16 % = 60 000 x 16% = 9 600 lei iv = vt x 1% = 100 000 x 1% = 1 000 lei id prf = ---x 100 = 9600/100000 = 9,6% mi 4. conclusions based on the research of the documentary material composed primarily of the primary legislation in the field, we found that the taxation of units in the hospitality industry was based on other taxation criteria than income or wealth. compared to other economic operators, whose earnings are taxed according to the amount of income and/or profits, the horeca sector was imposed, in order to determine the tax due, criteria such as: the seasonality of the business, the rank of the locality where it operates, the useful area o f the location. geo no. 16/2022 amending and supplementing the fiscal code eliminates this type of taxation of these companies and leaves them free to choose between: income taxation with 1%, or taxation of profits at 16%. regardless of the form of taxation that these economic operators choose to adopt, the legislator created the prerequisites for respecting the principles of fiscal equity, as they were formulated as maxims by adam smith, in the book wealth of nations; the absolute and relative tax burden of each taxpayer to be established according to his contributory power, which is dependent on the amount of income and taxable assets, as well as the personal situation of the taxable subject. in the case analyzed by us, we can draw the following conclusions: table no. 8. comparison of taxes owed by a restaurant in 2022 and 2023 types of tax calculated tax due specific tax 19159 tax 9600 income tax 1000 in this case, we considered a cost margin (fixed and variable) of the restaurant of about 40%. compared to this average cost margin of a restaurant, we can say that, through the changes made to the fiscal legislation regarding the taxation of restaurants, there has been a fiscal relaxation, reducing the fiscal pressure felt by them in terms of the taxation of earnings. it 33 can be observed that through the specific tax due, it took more into account parameters, such as the rank of the locality, the usable area, seasonality; aspects that from 2023 are removed and give restaurants the possibility to be taxed: profit or turnover. observing not only the percentage rate that is different between the taxation of profits and incomes, but also through detailed analyses, we can state that the turnover tax tends to become more advantageous for the hospitality industry sector as well, in terms of the amount of tax owed, but also in terms of flexibility, ease and way of managing it. of course, apart from the cases in which these types of economic operators obtain accounting and fiscal losses, in which case in the variant of taxation of profits, the fiscal pressure borne by them would become 0. references [1] cătineanu, florian, 1999, finanțe publice – studii de caz, 1999, editura mirton, pg. 37 [2] cristea, dumitru, horea, mutașcu, m., nicolescu, ana, cristina, 2009, elemente de teorie și practică fiscală, timișoara, pg. 13-29; [3] popa, adriana, florina, dobre, f., ciobanu, r., 2022, fiscalitate, editura ceccar, pg. 53-62; [4] smith, adam, 1965, avuția națiunilor, editura academiei române, pg. 39; [5] talpoș, ioan, 1996, finanțele româniei, editura sedona, 1996, pg. 137; [6] vonea, r., 2021, contabilitate financiară i., editura universității agora, oradea; pg. 15-42; [7] vonea, r., 2019, bazele contabilității – curs didactic, editura universității agora, oradea, pg. 15-35; [8] omt nr. 264/464/2016 pentru aprobarea normelor metodologice de aplicare a legii nr. 170/2016 privind impozitul specific unor activități [9] codul fiscal al româniei, aprobat prin legea nr. 227/2015, modificată și completată; [10] oug nr. 16/2022, publicată în mo nr. 716/15.07.2022, de modificare și completare a codului fiscal; [11] legea nr. 170/2016 privind impozitul specific unor activități; [12] legea nr. 31/1990 privind societățile comerciale, republicată; [13] www.termene.ro [14] www.deloitte.com ghid privind industria horeca [15] www.horeca.aristudio.ro http://www.termene.ro/ http://www.deloitte.com/ agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol 10 (2016) 4 the use of structural funds and european investments (esi) in order to develop the member states. examples of good practice in the use of esi funds gabriela bologa 1 , casian butaci 2 abstract multiannual financial framework of the european union (eu) for the period 2014-2020 enables implementation of the new generation of eu spending programs since 1 january 2014. eu member states provide, through the structural funds and european investment funds or esi, financial resources to support them in order to develop continuously. this paper discusses disclosure of such funds and a number of issues that need to be known by potential beneficiaries in the member states. keywords: beneficiary, funding program, expenditures, funds introduction regulation (eu) no. 1303/2013 establishes common rules applicable to the european regional development fund (fedr), european social fund (fse), the cohesion fund (cf), european agricultural fund for rural development (feadr) and the european maritime fund (fepam). these funds operating under a common framework, known as structural funds and european investment funds or esi. it also defines the provisions necessary to ensure the effectiveness of esi funds and coordination among themselves and with other eu instruments. 3 esi general funds esi funds are managed jointly by the commission and member states in accordance with the subsidiarity principle. according to this principle, action at eu level is justified only if it proves to be more effective than action taken at national, regional or local level. to qualify for funding, they were introduced a number of eligibility criteria: 4 • time: there are limits on the period during which operations can be performed and expenses • scope: imposed restrictions on the types of activities that can be funded • the categories of costs: certain categories of costs are excluded • geographical location: operations: only certain areas are eligible • durability of operations: investment must be maintained for a minimum period after the operation încherii later 1 agora university of oradea, tineretului square nr.8, 410526, oradea, romania, gabi_fiat@yahoo.com 2 agora university of oradea, tineretului square nr.8, 410526, oradea, romania, cbutaci@univagora.ro 3 guide for beneficiaries structural funds and european investment of eu instruments and annexes 5 • types of beneficiaries: only certain businesses, organizations and economic actors are eligible for assistance according to the guideline for the beneficiaries of structural funds and european investment instruments and related eu member states should develop strategic plans that include investment priorities for the five funds esi. these are called partnership agreements (ap). details of the objectives they intend to achieve with the resources available are in the operational programs (po) national and/or regional rural development programs (pdr) for the feadr. operational programs are designed to meet the challenges of socio-economic and environmental country or region concerned. member states must allocate funds to areas with the most pressing needs and do not have the opportunity to use all themes and funding models available under regulations. 5 managing national designated by each member state are responsible for managing programs effectively. along with the monitoring committees, which are responsible for: • develop and implement procedures for the selection and eligibility criteria • providing information to potential beneficiaries, such as minimum size of the project and financing plan period • ensuring enrollment projects within the scope of those funds • financial management and control programs applications must be submitted to national or regional management authority responsible for managing the program in question. before you apply for a grant, the potential beneficiaries must verify the investment priorities, eligibility criteria and procedure for submission of applications within their region and country programs. 6 the scope of the esi funds 7 negotiations between member states and european commission are crucial in the financing of the esi funds. priorities are set within national or regional multiannual programs. basically, member states may choose to focus on different activities in different eu regions; therefore, eligibility depends on the scope of the program in each region or country. to reduce the development gap between countries, financing from the cohesion policy is targeted to the poorest regions and member states. european regional development fund (fedr) 8 fedr aims to strengthen economic and social cohesion in the eu by correcting imbalances between its regions. erdf will contribute to all 11 thematic objectives. however, most of its resources will be directed to: • c&d: eur 39.9 billion; • smes: eur 32.8 billion; • economy with low carbon: eur 30.1 billion; • transportation and energy: eur 25.6 billion; 5 http://www.fonduri-structurale.ro/fondurile-esi-pe-scurt 6 http://www.fonduri-structurale.ro/ 7 http://ec.europa.eu/regional_policy/sources/docgener/guides/synergy/synergies_beneficiaries_ro.pdf 8 http://fondurile-euro.ro/fedr/fedr.php 6 fedr will also support cross-border cooperation transnational and interregional cooperation within the european territorial cooperation objective. cohesion fund (fc) the cohesion fund is intended for member states whose national income (vnb) per capita is less than 90% of the eu average. it aims to reduce economic and social disparities and promote sustainable development. the cohesion fund will support only fear objectives 4, 5, 6 and 7. the funding structure envisaged is as follows: • the transport infrastructure and energy: 33 billion; • environment: eur 17.2 billion; • economy with low carbon: eur 7 billion; european social fund (fse) 9 fse is the main instrument through which europe supports the creation of jobs, help people get better jobs and ensure more equitable job opportunities for all eu citizens. fse will focus on a limited number of priorities, to have a real impact in terms of solving the key challenges facing member states, namely: • employment: 30 billion; • education: 26 billion; • social inclusion: eur 21.3 billion; • institutional capacity: eur 3.6 billion; therefore, taking into account the special allocation for the initiative on employment among young people, amounting to eur 3.2 billion, over 86 billion will be invested in europe's population in the next seven years. european agricultural fund for rural development (feadr) 10 eu rural development policy supports the eu's rural areas to meet a wide range of challenges and opportunities they face in the twenty-first century: economic, social and environmental. feadr funding mechanism of the common agricultural policy (pac) which has a budget of 95.57 billion euros. rural development policy focuses on three objectives multidisciplinary, which aligns the europe 2020 strategy and the overall objectives of the pac:  the competitiveness of agriculture;  sustainable management of natural resources and climate action;  balanced territorial development of rural areas. in order to manage effectively the rural development policy through rural development programs (rdp), these three objectives are supported by six key priorities: • knowledge transfer and innovation in agriculture, forestry and rural areas; • increase the competitiveness of all types of agriculture and enhancing farm viability; • promoting food chain organization and risk management in agriculture; • restoring, preserving and enhancing ecosystems that are dependent on agriculture and forestry; •promoting resource efficiency and supporting the shift towards a low-carbon and climate resilient economy in agriculture, food and forestry sectors; 9 http://www.fse-romania.ro/ 10 https://ec.europa.eu/agriculture/rural-development-2014-2020_ro 7 • promoting social inclusion, poverty reduction and economic development in rural areas. european fund for fisheries and maritime affairs (fepam) 11 with a budget of eur 5.7 billion, fepam stimulates sustainable fisheries and sustainable aquaculture. this will improve data collection and control and the implementation of regulations in fishery. the fund will help create jobs and diversification in communities dependent on fisheries and promote the implementation of the integrated maritime policy. financial management of funds esi it is important to note that the esi funds represent over one third of the eu budget, so that the management and control systems established by member state authorities aim to prevent, identify and correct rules that are not respected including fraud. these authorities will monitor fraud risks associated with esi funds. the risk of damaging the reputation of a person associated with fraud and corruption is considered extremely seriously at all levels. examples of good practice in the use of esi funds 12 example. 1. ,, fifteen cornwal " restaurant in cornwall, uk, owned by celebrity chef jamie oliver, has successfully used both fedr and esf funds to start its program for entrepreneurship and training for apprentices. the restaurant has used funding to provide disadvantaged young people aged between 16 and 24 years the chance to form as cooks in an apprenticeship program recognized nationally. renowned restaurant was built, in turn, with financial support from the fedr. since 2006, fifteen cornwal program had over 140 apprentices enrolled, of which 70% are cook and present. the program also invests 1 million gbp annually into the local economy through a policy to use local resources in proportion of 70%. a decisive aspect is to create through this program to 80 jobs, in addition to the 86 already internship ends. example 2. a mix of innovative financing care for older people in rural areas of germany. in the land mecklenburg vorpommern, the local action group (lag), a leader in the region, was asked to help obtain financing for the construction of a specialized treatment for people with dementia. the aim was to provide patients the chance to live with a mate in a safe and comforting area. a former textile factory was transformed into the seat of malchow island caring for people with dementia and the investments made through this project contributed to the preservation of this building with heritage rural value. the community approach was that of developing a project and multidisciplinary combined three different sources of eu financing: feadr, fse and fedr. esi funds and romania romania receives in 2014-2020 a financial allocation of 30.84 billion eur in funds esi adding and national contribution of 5.63 billion euro, romania has a total budget of eur 36.47 billion for investment in various fields. esi funds are allocated as follows: 10.73 billion euro using fedr 8.13 billion euro using feadr 11 https://ec.europa.eu/fisheries/cfp/emff_ro 12 http://ec.europa.eu/regional_policy/sources/docgener/guides/synergy/synergies_beneficiaries_ro.pdf 8 6.93 billion feadr using fc 4.77 billion eur using fse 168 million eur using feapm 106 million eur using yei fig. 1. the distribution of esi funds in romania source: http://www.fonduri-structurale.ro/fondurile-esi-pe-scurt conclusion every esi fund potential recipient must know that these funds are used to support financial instruments that contribute to the implementation of financially investment. financial instruments are aiming to increase the leverage of eu investments by attracting additional resources from public and private investors. it is also important to realize that can be used, according to the legislation in force, several funds of funds category esi, and this can be a real help for local economies. in fact, there are a number of projects that have successfully used various forms of investment and creativity in the various programs funded esi. bibliography regulation(ue) nr. 1303/2013 guide for beneficiaries structural funds and european investment of eu instruments and annexes http://www.fonduri-structurale.ro/ http://www.fonduri-structurale.ro/fondurile-esi-pe-scurt http://www.fonduri-structurale.ro/ http://ec.europa.eu/regional_policy/sources/docgener/guides/synergy/synergies_beneficiaries_ro.pdf http://fondurile-euro.ro/fedr/fedr.php http://www.fse-romania.ro/ https://ec.europa.eu/agriculture/rural-development-2014-2020_ro https://ec.europa.eu/fisheries/cfp/emff_ro http://ec.europa.eu/regional_policy/sources/docgener/guides/synergy/synergies_beneficiaries_ro.pdf http://www.fonduri-structurale.ro/fondurile-esi-pe-scurt https://ec.europa.eu/agriculture/rural-development-2014-2020_ro https://ec.europa.eu/fisheries/cfp/emff_ro agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 24-30 24 marketing innovations in cross-border passenger transportation iryna honcharova¹, tetіana metil², viktor koval³, illia neskhodovskyiº dept. of business and tourism management, izmail state humanities university, ukraine ¹ https://orcid.org/0000-0003-2607-6698, e-mail: cehovich2610@gmail.com ² https://orcid.org/0000-0002-4553-4343 ³ https://orcid.org/0000-0003-2562-4373 º https://orcid.org/0000-0002-3044-2163 ___________________________________________________________________________ abstract. the development of innovations in various areas of economic activity has its own characteristics. there are a number of unique features for the development of passenger transport routes, which should be considered in more detail than in the planning of freight transport, and characterize this type of activity as particularly unique and requires a specialized approach in marketing innovations in this area. the presented article outlines the basic principles and concepts of the approach both when working with the material and technical base and when working with personnel in the course of planning and implementing innovations in passenger transportation. particular attention is paid to the system of motivation for the implementation of the innovation process since the result of the introduction of innovation depends on the degree of motivation of potential subjects of the innovation process. also, options for communication are considered both directly with potential consumers of the service created in the process of innovative activity and with local authorities in those regions where it is planned to carry out the innovative activity. keywords: marketing innovations, passenger transportation, carbon footprint reduction, motivation, innovation roadmap. introduction modern aspirations to reduce the carbon footprint can be viewed from the point of view of the transportation of passengers from two fundamentally different positions. the first position includes technological changes in terms of personal transport, which is still progressing rather slowly due to the high cost of development results, which makes them inaccessible to the vast majority of the population. the second position is to offer a convenient way of transportation for passengers in order to reduce the use of personal vehicles. for the success of the second position, it is necessary to revise existing routes and develop new ones, including cross-border ones, in order to maximize the convenience of passengers' movement while causing minimal harm to the environment (honcharova & metil, 2022). passenger convenience will come from the fact that the time spent driving a private car can be used much more rationally in the era of virtual production and communication, that is, instead of wasting time on amateur driving, people can spend it studying correspondence, performing certain types of work, that can be done electronically and other things that cannot be done while driving a personal car. https://orcid.org/0000-0003-2607-6698 mailto:cehovich2610@gmail.com https://orcid.org/0000-0002-4553-4343 https://orcid.org/0000-0003-2562-4373 iryna honcharova, tetіana metil, viktor koval, illia neskhodovskyi 25 the reduction of the carbon footprint will be facilitated by the fact that passenger transport is much easier to convert to environmentally friendly technologies than private transport (koval et al., 2022). however, at the same time, the comfort of passengers should not suffer, that is, it is necessary to radically change the approach to the choice of rolling stock for the implementation of all passenger traffic in general and cross-border in particular. i. literature review the problem of optimizing and bringing the passenger transportation system in line with modern requirements has now faded into the background, however, authors such as comfort (2020) and munby (2014) are of the opinion that an efficiently functioning passenger transportation system is of high social importance. these authors are of the opinion that there is a need for deep innovation in this industry. in turn, such authors as dias (2018), kunret (2018), and pfohl (2022) note that in the computer era, planning and implementation of various types of transportation, including passenger transportation, should be taken in a new way. as kunret (2018) emphasizes, the main stabilizing factor at present is complete and reliable information, which is promptly communicated to all participants in the transport and logistics process (kunert, 2018). in turn, pfohl (2022) provides clear economic requirements for the passenger route as an object of logistics infrastructure. in general, all authors consider passenger transportation mainly from an economic point of view. ii. results ii.1. motivation to development of innovations the main motivation for the development of innovative activity is the increase in the economic efficiency of enterprises. passenger traffic is characterized to some extent by seasonality, variability in passenger traffic, different density of potential passenger traffic for different areas and many other features that should be taken into account when developing specific routes and considered along with such facts as the presence of border checkpoints along the route (fragerberg, et al., 2006). despite the presence of a number of factors that negatively affect the potential route, the benefits of developing a new route for both the transport company and the population living in the territories that will be served by this route should also be taken into account (comfort, 2020). the diagram in figure 1 shows the implications for an area for which a new passenger route is proposed as an innovation. figure 1. consequences for the area after the opening of a new passenger route. (compiled by the author) new passenger transportation route economic consequences social consequences access to new job markets new markets for households and farmers access to goods and services degree of feeling of personal freedom interper-sonal communication marketing innovations in cross-border passenger transportation 26 if we consider in more detail the consequences for the region after the introduction of a new route for passenger transportation, then the motivation for introducing innovations in passenger transportation in general and in particular through the development and implementation of a new route will be more widely revealed. as can be seen from figure 1, all impacts can be divided into two main categories: economic and social. the economic consequences include the opening of new markets for the population. the main thing will be the opening of a new labor market, since in practice there are quite often disproportions in the professional composition between the unemployed and the available vacancies. new passenger routes can help smooth them out through labor redistribution opportunities. it may also open new markets for households and farmers, which will raise the level of well-being of the backbone of any economy the household (karlsson, et al., 2009). thus, the possibility of reducing unemployment, increasing tax inflows from employees, households and farmers is a motive for local authorities to look for opportunities to open new passenger routes (koval, et al., 2023). access to goods and services is not only an economic, but also a social consequence of the introduction of a new passenger route, since from an economic point of view, an increase in trade serves to form a more sustainable economy in the region, and from a social point of view, it makes it possible to improve the quality of life of the population, since access to a wider range of goods and services may also mean access to a greater number of medical services provided by private and public companies, that is, it improves the quality of life of the population in various areas of physiological existence (nagaraj, 2021). ii.2. plan for innovation in passenger transportation when drawing up a marketing plan for any innovation, the stages of innovation should be clearly defined, for which an innovation roadmap is drawn up. figure 2 presents a roadmap for innovation in the passenger transportation industry. figure 2. innovation roadmap: "new passenger route". (compiled by the author) iii. market demand study when studying the market in order to create a new route for passenger transportation, special attention should be paid to a survey of potential consumers of the proposed service. in order to obtain objective and reliable information, it is necessary to conduct full-scale surveys of residents in all settlements according to the proposed route patterns (tobelmann, 2011). in modern conditions, it is possible to conduct a survey of potential consumers using electronic means, limiting the possibility of submitting a response from each device only once (boland, 2014). if it is necessary to conduct a study in areas where internet technologies are poorly developed, it is possible to contact the local authorities for help in conducting a survey of residents. market demand study supply opportunity research comparison of demand and economic efficiency plan to match supply with demand new passenger route iryna honcharova, tetіana metil, viktor koval, illia neskhodovskyi 27 as an example, let's consider data on non-regular transportation carried out by bolgradtrans jsc for the period 2020-2022. figures 5-8 show graphs of passenger traffic for the main traffic routes in romania and bulgaria. figure 3. passenger traffic to galati, romania figure 4. passenger traffic to constanta, romania figure 5. passenger traffic to bucharest, romania figure 6. passenger traffic to varna, bulgaria figure 7. passenger traffic to balchik, bulgaria figure 8. passenger traffic to sofia, bulgaria (fig.3-8 compiled by the author) iii.1. supply opportunity research the study of the capabilities of carriers operating in the region is carried out in terms of the availability of rolling stock, the quality of rolling stock and the formation of a professional staff of drivers for passenger transportation. as mentioned earlier, one of the missions of opening new passenger routes is to reduce the carbon footprint. to achieve this 1240 2460 3880 0 1000 2000 3000 4000 5000 2020 2021 2022 galati, romania 650 1400 2105 0 500 1000 1500 2000 2500 2020 2021 2022 constanta, romania 400 980 1850 0 500 1000 1500 2000 2020 2021 2022 bucharest and otopeni (international airports), romania 1100 1300 1650 0 500 1000 1500 2000 2020 2021 2022 varna and kovarna, bulgaria 1420 1760 1840 0 500 1000 1500 2000 2020 2021 2022 sofia, bulgaria 800 750 1250 0 500 1000 1500 2020 2021 2022 balchik and general toshevo, bulgaria marketing innovations in cross-border passenger transportation 28 goal, it is necessary to clearly follow the policy of improving the quality of rolling stock for passenger transportation (comfort, 2020). therefore, when considering new possibilities for the implementation of transportation, it is necessary to consider the rolling stock both in terms of the comfort of transporting passengers and in terms of safety for the environment (trachenko et al., 2021). when planning cross-border passenger routes, it is necessary to take into account the requirements for the rolling stock of all states through whose territory the route will pass. if we consider the personnel potential, then for the selection of drivers for passenger routes, it is necessary to consider candidates who are not inclined to create conflict situations, who have positive thinking and, in the case of cross-border transportation, speak the necessary languages to communicate with employees of bus stations and passengers. iii.2. comparison of demand and economic efficiency to study the effectiveness of a potential passenger route, it is necessary to carry out a number of calculations. initially, for each section between two settlements, it is necessary to determine the number of potential passengers (pp) for a certain unit of time, for example, per month, and then determine the number of possible seats (ps) provided by carriers. then you can calculate the density of demand (in %) using the formula 1. 𝐷𝐷 = 𝑃𝑃 𝑃𝑆 ∗ 100% (1) in the case when the density of demand is below 50%, the route will be economically inefficient, however, to serve potential customers, it can be laid so that passengers can use it, but with a transfer. if the resulting potential demand is between 50% and 75%, further research is needed to determine the frequency of the route, as some routes are more popular on weekdays and some are more popular on weekends. when obtaining a demand density above 75%, it is necessary to plan a systematic movement along this route (munby & watson, 2014). iii.3. plan to match supply with demand if quantitative indicators were more significant to determine the economic efficiency of the passenger transportation route, then to bring the supply in line with demand, the quality factors of the services provided are much more significant. the quality of the services provided in the implementation of passenger transportation currently means not only the comfort of the cabin of a passenger bus, but also comfort at stops, and, most importantly, the presence of an electronic notification system about the movement of the bus along the route (frey & osterloh, 2013). it is especially important to have an electronic notification system when planning a cross-border route, since the imperfection of the system of border and customs control does not allow drivers of such routes to strictly adhere to the time frames of movement along the route. the solution to the problem of long-term border and customs control can be the creation of a passenger database, in which information about passengers will be entered at bus stations or by the driver by scanning biometric passports when boarding a bus on a cross-border route. if we consider the electronic notification system about the movement of the bus along the route, then it can be an integral part of the mobile application, the functionality of which iryna honcharova, tetіana metil, viktor koval, illia neskhodovskyi 29 will include both obtaining information about the available seats on the route of interest to the passenger, the level of comfort of the bus provided, the availability and location of empty seats. in addition, the fare payment service should be available through the application, in the case of a cross-border route in any of the currencies of those countries through which the route passes, and through the application the opportunity should be provided at the bus station to enter the relevant data of the international passport into this application (machado & davim, 2022). conclusions innovation is the basis for progressive growth in all areas of society. it is impossible to consider separately the economic and social effect of the introduction of innovations, since they are closely interconnected and form the quality of life of end consumers of goods and services. when forming innovations in the transport sector, especially in the field of passenger cross-border transportation, there are a number of problems, the solution of which requires an integrated approach both from the side of business and from the side of the authorities, many state structures. the ultimate goal of the formation of innovations in passenger transportation, especially in cross-border ones, is both to increase the degree of freedom of movement of citizens, and the possibility of intercultural and intersocial exchanges, which will give a positive dual effect for the mutual development of participants in such contacts. another positive effect of introducing innovations in passenger cross-border transportation is the reduction of the carbon footprint, which is one of the main tasks of modern society. references 1. boland, l. a., 2014. the methodology of economic model building (routledge revivals): methodology after samuelson. s.l.:routledge. 2. comfort, p., 2020. public transportation. s.l.:amazon digital services llc kdp print us. 3. dias, a., salmelin, b., pereira, d. & dias, m. s., 2018. modeling innovation sustainability and technologies: economic and policy perspectives. s.l.:springer. 4. fragerberg, j., mowery, d. c. & nelson, r. r., 2006. the oxford handbook of innovation. s.l.:oup oxford. 5. frey, b. s. & osterloh, m., 2013. successful management by motivation: balancing intrinsic and extrinsic incentives. s.l.:springer science & business media. 6. honcharova, i. & metil, t., 2022. finding areas of innovative activity of the enterprise. s.l., управління та адміністрування в умовах протидії гібридним загрозам національній безпеці: матеріали ііі міжнародної науково-практичної конференції (м. київ, 22 листопада 2022 року).. 6. karlsson, c., johansson, b. & stough, r., 2009. entrepreneurship and innovations in functional regions. s.l.:edward elgar. 8. koval, v. et al., 2022. model analysis of eco-innovation for national decarbonisation transition in integrated european energy system. energies, 9(15). 9. koval, v., honcharova, i., metil, t. & stepanova, n., 2023. conceptual approaches to creating innovations in the field of crossborder transport. in: innovative management of marketing innovations in cross-border passenger transportation 30 business integration and education in transnational economic systems. riga: isma university riga (latvia), pp. 170-180. 10. kunert, c., 2018. design for stability in transport logistics definition, concepts and evaluation. s.l.:kit scientific publishing. 11.machado, c. & davim, j., 2022. organizational innovation in the digital age. s.l.:springer nature. 12. munby, d. & watson, a., 2014. road passenger transport: road goods transport. s.l.:elsevier science. 13. nagaraj, s., 2021. insights, innovation, and analytics for optimal customer engagement. s.l.:igi global. 14. pfohl, h.-c., 2022. logistics systems: business fundamentals. s.l.:springer nature. 15. tobelmann, m., 2011. public policies on sustainable logistics and the impact on thirdparty logistics provider. s.l.:grin verlag. 16. trachenko, l. et al., 2021. optimization modeling of business processes of engineering service enterprises in the national economy. naukovyi visnyk natsionalnoho hirnychoho universytetu, issue 4. medimond template 13 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 15 (2021) application of b2c digital marketing valentina simona pașcalău1 1 doctoral school of economics and business administration, west university of timișoara, romania e-mail valentina.pascalau73@e-uvt.ro abstract the purpose of this paper is to understand the application of digital b2c marketing. companies market directly to end customers or decision-makers through b2c marketing. most b2c customers base their decisions on how they feel about a product or service, not on facts or how useful it is. b2c marketers can take advantage of this by developing customized content that appeals to the emotions of their target audience. keywords: b2c online markets, company perspective, consumer perspective, online shopping behavior 1 introduction the widespread adoption of digital technologies by consumers and businesses has resulted in significant changes in marketing practices. the expansion of customers' knowledge levels as a result of increased access to information and the digital transformation of business and exchange activities, necessitates the creation of new application of b2c digital marketing. to begin with, b2c stands for business to consumer and b2c marketing is defined as the promotion of a company's products and services to potential customers. with that in mind, it's no surprise that businesses employ b2c digital marketing to reach out to the customer. because b2c digital marketing is heavily reliant on technology, firms now have access to a wide range of channels through which to reach out to their target audiences. business-to-consumer (b2c) markets have made a substantial contribution to the commercial development of the internet by encouraging transactions on various e-commerce sites from a growing number of customers around the world. in order to become a sustainable enterprise in the face of an uncertain business environment, world marketing masters kotler and kartajaya (2000) proposed that decision makers can formulate marketing strategies from three aspects: corporate strategy, corporate tactics, and corporate value. b2c e-commerce platforms are facing new hurdles as the consumer market changes. 2 b2c online markets b2c online markets will be analyzed from two perspectives: the consumer perspective and the company perspective. 2.1 the consumer perspective the online consumer profile is a profile that has a significant impact on a customer's online shopping behavior and experience, as well as assistance in identifying online shopping intentions. mailto:valentina.pascalau73@e-uvt.ro 14 consumer loyalty is something that b2c e-commerce platforms strive for, and it is based on the value they provide. brand building is at the heart of value creation, and brands require the backing of services and processes. first and foremost, brand development. the communication of platform brand culture and the optimization of platform merchants' quality are required for the development of b2c e-commerce platform brand image. factors such as ease of access to the internet, level of technological skill, perceived benefits of making an online purchase, and demographic variables all influence online purchasing behavior. an online store offers several benefits to its shoppers: it is open 24 hours a day, offers instant personalized promotions, prices are dynamic and reflects market demand, offers recommendations and reviews from site users. online consumer behavior can be analyzed from two perspectives (doherty and ellischadwick, 2006): the profile of online consumers and the online shopping experience of consumers. there are two types of variables in a consumer profile: classification variables and character variables. personal characteristics that tend to remain static throughout a person's life or vary slowly over time are called classification variables (age, education, income, mobility, race, ethnicity). these factors can be used to classify potential customers into target groups that can be contacted through various communication channels. because character variables include traits related to customer perceptions, beliefs, and attitudes, they are more difficult to understand and recognize (innovation, experiences, emotions).these factors increase, change, or change significantly faster than time-varying variables. consumer attitudes regarding the internet and their purchasing intentions are influenced by their opinions about many aspects. variables that can be considered: customers want their specific personal information and financial information to be stored securely when they supply it. regarding the risk, online shoppers make purchases in an uncertain atmosphere, with little information about the exchange relationship and the risk involved. consumers face six sorts of risks, according to bauer (1960): financial, product performance, social, psychological, physical, and time-wasting dangers. risk reduction has the ability to increase trust. because it's impossible to totally eliminate the risks of online shopping, one possible option is to identify ways to boost client confidence (chang et al., 2013). online shopping is hampered by a lack of confidence. service provider skill, product performance, corporate reputation, happiness with previous contacts, and resemblance are all factors that influence trust. the degree to which an individual believes a new technology will enhance and improve their performance is referred to as perceived utility. when used in the context of online buying, the utility refers to the time and effort required to learn how to shop online in comparison to the retailer's level of service excellence. ease of use refers to an individual's belief that using a new technology will be simple. several features of the online shopping experience have been recognized as having an impact on the consumer's perception of the process. as a result, positive experiences with service delivery and site security increase customer satisfaction (doherty and ellis-chadwick, 2006, 15 2010), while site design, ease of navigation, and a high level of valuable services and products increase loyalty customers and improve the consumer experience. customers have high expectations in the following areas: delivery, prompt response, availability, convenience, customer service. 2.2 the company’s perspective the company's perspective refers to the evolution of online retail, different types of online tactics and managerial and strategic issues. there are three categories of business strategies that can be adopted by online retailers: bricks-and-clicks companies, click-and-mortar companies and pureplay companies. brick-and-clicks companies are long-term businesses with physical locations that use the internet as a marketing tool or sales channel, either strategically or tactically. for security reasons, online shoppers prefer to buy from companies that also own physical stores. click-and-mortar companies are virtual businesses that use an online sales model to meet customer demand, but their sales are supported by a physical distribution infrastructure that includes warehouses. the advantages of this form of business include lower costs of operating a physical store and the elimination of barriers to consumer mobility. pureplay companies are a completely virtual business that operates exclusively online. these businesses do not have their own physical stores or physical delivery systems. outsourced services include storage, packaging, shipping and returns. companies become retail channels as they increase their use of the internet to provide information, provide customer service, and sell online. companies that operate in the business-to-consumer sector and use the internet both as a communication channel and as a sales channel are called retail (doherty et al., 1999). companies that operate both offline through physical stores and online through virtual stores are called omni-channel retailers. companies must consider three criteria to survive in the omni-channel world: stocks are being phased out, and a separate user experience is being created throughout the purchasing process. companies must develop ways to tie the internet and offline worlds together, rather than relying on discrete marketing operations. increasing digital interaction opportunities through a better understanding of customer purchase habits (e.g., through digital advertising and mobile promotions): analyzing and measuring client buying behavior at all points of engagement in order to fully comprehend what influences buyers' choices and purchasing decisions. 3 conclusions the discrepancy between the customer's expectations for the online offer and the actual performance of the online offer influences the online performance of the retailer. tavis and glade (1988) proposes managerial and strategic challenges to address inconsistencies in performance and managerial implications, therefore, performance discrepancies relate to: the disparity between the strength of the brand and the offer on the website, the disparity between the power of the brand offline and online, the lack of alignment between the nature of the online competitive environment and the maturity of consumer demand, inertia in decision making. 16 thus, in terms of these discrepancies, companies must design sites that match consumer expectations; failing to do so can result in a drop in company sales as customers will browse and buy from other sites. additionally, increasing the strength of the internet brand is a difficulty for businesses. competitors will gain a competitive advantage if they do not spend in establishing and consolidating their online brand, even if their brand is weaker. in many areas of commerce, the online market is still in its infancy. these markets can provide businesses with a competitive advantage. barriers to reaching out to customers must be addressed. budgetary constraints are misaligned because the costs of doing nothing refer to the loss of an opportunity at best and a competitive advantage at worst, budgetary limitations are misaligned. more market segments will develop as a result of the comprehensive and in-depth integration of the new generation of information technology, the desire for innovation will rise, and the consuming scene will be constantly reconstructed. b2c e-commerce platforms will likely encounter a more volatile consumer market in the future. if b2c e-commerce platforms wish to thrive in the tumultuous retail sector, they must collaborate on marketing plans that consider three factors: strategy, tactics, and value. the focus of a company's marketing, which must be distinguished effectively, is defined by strategy. tactics to improve the company's market competitiveness and lay the groundwork for the company's brand building. value increases a company's impact, which helps it maintain its market position. references [1] bauer, r.a. , (1960), consumer behavior as risk taking, dynamic marketing for a changing world, proceedings of the 43rd. conference of the american marketing association, 389-398 [2] chang, h.h., et al (2013), building trust online: interactions among trust building mechanisms, inf. manag., 50 (7) (2013), pp. 439-445 [3] doherty, n.f., ellis-chadwick, f, hart, c., (1999), cyber retailing in the uk: the potential of the internet as a retail channel, issn: 0959-0552 [4] doherty, n.f. and ellis‐chadwick, f.e. (2006), new perspectives in internet retailing: a review and strategic critique of the field, international journal of retail & distribution management, vol. 34 no. 4/5, pp. 411-428 [5] doherty, n.f. and ellis-chadwick, f., (2010), evaluating the role of electronic commerce in transforming the retail sector, the international review of retail, distribution and consumer research, 20, pp.375-378 [6] kotler, ph., kartajaya, h., (2000), repositioning asia: form bubble to sustainable economy, asia: john wiley & sons [7] tavis, l. and glade, w. (1988), implications for corporate strategies, multinational managers and host government interactions, notre dame: university of notre dame 1 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 16 (2022) credit institutions – financing entities during the covid-19 pandemic cristina ioana antik1, 1 faculty of juridical and administrative sciences, agora university of oradea, oradea, romania e-mail antikcristina@yahoo.com abstract the impact of the covid-19 pandemic affected the financial situation of debtors, both individuals and legal entities, as they sought to find the best solutions for the recovery and functioning of their business. this paper aims to analyse the decision to finance an economic entity during the covid-19 pandemic, generated by the need to acquire a tangible fixed asset necessary to carry out the core business. for this purpose, a series of financial and accounting aspects regarding the financing alternatives are highlighted using the following research tools: the observation method, the descriptive method, the case study method. keywords: financing decision, financial leasing, bank loan, pandemic, debtor. 1. introduction the application of restrictive measures to combat and prevent the spread of the sars-cov-2 virus, initially established by the decree of the president of romania no. 195/2020 regarding the establishment of the state of emergency on the territory of romania and later extended by the decree of the president of romania no. 240/2020, had adverse repercussions on the financial situation of debtors, individuals and/or legal entities, in certain cases their incomes were significantly reduced. for companies, an alternative in terms of financing is the leasing system. this option is a solution when the company does not have sufficient liquidity to purchase the goods, using them in exchange for a periodic payment, thus managing to finance the investment within the company. another way of financing an investment in the case of an entity is through bank loans. the important factors in the lending decision are the financing costs that the company will have to bear, taking into account the financial potential and the economic management plan. although numerous comparative studies have been carried out over time regarding financing alternatives through leasing and credit purchase, it is very difficult to assess which of the two methods is more advantageous. 2. reanalysis of specialized literature the normative act that regulates leasing operations in romania is the government ordinance no. 51/1997 on leasing operations and leasing companies, republished, with subsequent amendments and additions. according to art. 1 paragraph (1) of this normative act, leasing operations are defined as those through which one party, called the lessor/financier, transfers for a determined period the right of use over an asset, the owner of which is, to the other party, called the lessee/user , at its request, against a periodic payment, called the leasing rate, and at the end of the leasing period, the lessor/financier undertakes to respect the option right of the lessee/user to buy the asset, to extend the leasing contract without changing the nature leasing or to terminate contractual relations. the lessee/user can choose to buy the tangible fixed asset before the end of the leasing period, but not mailto:antikcristina@yahoo.com 2 earlier than 12 months, if the parties so agree and if they pay all the obligations assumed by the contract. at art. 2 lit. d) the ordinance defines the leasing rate, distinguishing between financial leasing, in which the rate represents a share of the input value of the asset and the leasing interest, which is established based on the interest rate agreed by the parties, and operational leasing, in which the rate represents the rent, which is determined by the agreement of the parties. also, references to the development of leasing contracts in romania can be found in law no. 227/2015 regarding the fiscal code, with subsequent amendments and additions, to title i "general provisions", art. 7 points 7-8, as follows:  financial leasing contract any leasing contract that meets at least one of the following conditions: a) the risks and benefits of the right of ownership of the asset that is the object of the lease are transferred to the user at the time when the leasing contract takes effect; b) the leasing contract expressly provides for the transfer of ownership of the asset that is the object of the lease to the user at the time of the expiration of the contract; c) the user has the option to buy the asset at the time of the expiration of the contract, and the residual value expressed as a percentage is less than or equal to the difference between the maximum normal operating time and the duration of the leasing contract, compared to the maximum normal operating time, expressed as a percentage ; d) the leasing period exceeds 80% of the maximum normal operating time of the asset the object of the lease; within the meaning of this definition, the leasing period includes any period for which the leasing contract can be extended; e) the total value of the leasing installments, minus the accessory expenses, is greater than or equal to the input value of the asset";  operating leasing contract – any leasing contract concluded between the lessor and the lessee, which transfers to the lessee the risks and benefits of the right of ownership, less the risk of capitalizing the asset at the residual value, and which does not meet any of the conditions provided for in point 7 letter. b)-e); the risk of capitalizing the asset at its residual value exists when the purchase option is not exercised at the beginning of the contract or when the leasing contract expressly provides for the return of the asset at the time of contract expiration". taking into account the criteria according to which it is classified, leasing takes several forms. according to vintilă (2004), it can be movable and immovable, related to the involvement of the parties, directly or indirectly, and depending on the procedures for calculating the rates, it can be net or gross. in romania, a special form of leasing is sale-and-leaseback, characterized according to the authors molico and wunder (2003) by the fact that the leasing user, first of all the owner of a leased object, sells and assigns ownership of this object to a lessor of leasing, in order at the same time to get it back for use on the basis of a leasing contract. from an accounting point of view, companies that are required by law to use international financial reporting standards as the basis of their accounting will apply ifrs 16 leases. in romania, the general legal accounting regulation for the application of ifrs is the order of the minister of public finance no. 2.844/2016 for the approval of the accounting regulations in accordance with the international financial reporting standards, with subsequent amendments and additions. mihalciuc (2019) states that the provisions of ifrs 16 apply to all companies that report financially according 3 to international financial reporting standards (listed or unlisted companies that have chosen ifrs for consolidated accounting, including their subsidiaries) and, also, the majority of leasing contracts, including those for assets related to the right of use within a leasing subcontract, with certain exceptions provided by the standard (leasing regarding the exploration of ores or biological assets, service concession commitments, intellectual property rights, license). in our country, the entities obliged to report according to ifrs are credit institutions, nonbanking financial institutions, insurance and reinsurance companies, brokerage companies, as well as companies listed on the bucharest stock exchange. companies that do not fall into this category apply the provisions as the basis of accounting order of the minister of public finance no. 1,802/2014 for the approval of the accounting regulations regarding individual annual financial statements and consolidated annual financial statements, with subsequent amendments and additions. with regard to lending activity in romania, credit institutions grant loans only in compliance with the legal regulations in force, namely government emergency ordinance no. 99/2006 on credit institutions and capital adequacy, with the subsequent amendments and additions, of internal normative acts and internal approval powers. loans are granted in the local currency and in all currencies quoted by the national bank of romania, under the cost conditions established by the bank's steering committee (david, 2009). in order to come to the aid of debtors in difficult situations from a financial point of view, caused by the outbreak of the covid-19 pandemic, in romania the government's emergency ordinance no. 37/2020 regarding the granting of facilities for loans granted by credit institutions and non-bank financial institutions to certain categories of debtors, which provides for a series of measures aimed at facilities for holders of leasing contracts and credit contracts, which has subsequently undergone changes. in the category of creditors who can grant the facilities, according to art. 1 lit. a) from the normative act mentioned above, credit institutions defined according to geo no. 99/2006 and non-bank financial institutions defined by law no. 93/2009, with subsequent amendments and additions, as well as the branches of credit institutions and non-bank financial institutions from abroad that carry out activity on the territory of romania. financial leasing companies are established in the form of joint-stock companies and as non-banking financial institutions, while operational leasing companies are established and operate according to companies law no. 31/1990, republished, with subsequent changes and additions, og no. 51/1997 requiring them to have as their main object of activity the carrying out of leasing operations and a minimum share capital, subscribed and fully paid in cash, upon establishment, equal to the equivalent in lei of the sum of 200,000 euros. the period for which the suspension of payment obligations can be requested is between one and nine months, without being able to exceed the date of december 31, 2020. 3. research methodology in order to achieve the objective formulated regarding the subject addressed, the study is based on certain methods of scientific research: the observation method, the descriptive method and the case study method. 4. research results 4 the objective of the research is the analysis of the financing decision in the case of an economic entity, during the covid-19 pandemic, generated by the need to purchase a tangible fixed asset necessary for the performance of the basic activity. for this, we chose a micro-enterprise economic entity whose main activity is transport, whose turnover is less than 100,000 euros. in order to carry out the basic activity, the company administrator analyzes the need to purchase a truck intended for the transport of goods and decides that it is indispensable in carrying out his activity, considering that it is not appropriate to choose a rental service in this case. from the offer of existing financial institutions on the market, the company's representative opts for banca transilvania, going to decide which is the financing option that benefits him the most: financial leasing or bank credit. 5. presentation of the financial-accounting aspects based on a financial leasing contract contract conditions if the transport company concludes a financial leasing contract for a period of 4 years with bt leasing transilvania ifn sa in may 2020, for a truck intended for the transport of goods, the contractual clauses provide for a contract value of 120,000 lei , while the advance that must be paid by the lessee is 25% of the value of the immovable asset. also, the costs regarding this type of financing can be found in the interest charged by the lessor, of 7.9%, and in the monthly management fee, of 20 lei, while the file analysis fee is 450 lei. the company will also pay a monthly insurance in the amount of 254.72 lei to bt intermedieri agent de asigurare srl. from the analysis of the repayment schedule of the financial leasing installments, the specifics and value of the expenses borne by the company can be seen as follows: • total interest payment (financial expenses) – 7,110 lei, representing a monthly value of 148.12 lei throughout the financing period; • insurances and commissions (operating expenses) – 13,187 lei, of which 960 lei – the management commission with a monthly value of 20 lei during the financing period and 12,227 lei – the insurance borne each month during the contractual period, in the amount of 254.72 lions; • the amount to be paid – 140,297 lei, respectively 120,000 lei – the value of the contract and 20,297 lei – the expenses related to the contractual period; • total to be paid, with the file analysis commission, in the amount of 450 lei 140,747 lei. the flow of accounting records in the case of financial leasing based on the contract concluded with the leasing company, the lessee makes the following entries in the accounting: in may 2020:  receipt of the advance invoice (25%): 35.700 lei % = 404 „property providers” 35.700lei 30.000 lei 4093 „ advances granted for tangible assets” 5.700 lei 4426 „deductible vat” 5  payment by bank transfer of the advance invoice: 35.700 lei 404 = 5121 35.700 lei „property providers” „bank accounts in lei”  registration of the financial leasing contract: 120.000 lei 2133 = 167 120.000 lei „means of transport” „other assimilated loans and debts”  highlighting the interest in off-balance sheet accounts, according to the due date ((120,000 lei–30,000 lei) x 7.9%): debit 8051 7.110 lei „payable interest”  retention of the advance: 30.000 lei 167 = 4093 30.000 lei „other assimilated „advances granted for loans and debts” tangible assets” the tax on the means of transport owed to the local public administration by the lessee, according to art. 471 para. (6) lit. a) and b) of the fiscal code, will be determined by the taxation decision issued starting from the first day of the year following the one in which the financial leasing contract was drawn up. the lessee's obligation when he takes over the asset in the financial leasing system is to submit the tax declaration to the tax authority in whose territorial competence the means of transport will be registered, within 30 days from the preparation of the processhandover-receipt report.  registration of the invoice regarding the file analysis commission: 535,50 lei % = 401 „providers” 535,50lei 450,00 lei 628 „ other service charges executed by third parties” 85.50 lei 4426 „deductible vat”  payment by bank transfer of the file analysis commission: 535,50 lei 401 = 5121 535,50 lei „providers” „bank accounts in lei” in june 2020:  receipt of the financial leasing invoice related to the first installment: 2.431,32 lei % = 404 „property providers” 2.431,32 lei 1.875,00 lei 167 „other service charges executed by third parties” 6 20,00 lei 628 „other service charges executed by third parties” 148,12 lei 666 „costs regarding interest” 388,20 lei 4426 „deductible vat”  payment by bank transfer of the invoice: 2.431,32 lei 404 = 5121 2.431,32 lei „property providers” „bank accounts in lei”  non-accounting registration of the interest paid: credit 8051 148,12 lei „payable interest”  depreciation recording: being a financial leasing contract, it entitles the lessee to record the depreciation of the asset in accordance with the accounting policies practiced by him. thus, the amortization method chosen is the linear one, the value related to the operating expenses regarding the amortization being calculated as follows: annual depreciation = entry value/lifetime = 120,000 lei/4 years = 30,000 lei monthly depreciation = annual depreciation/12 months/year = 30,000 lei/12 months = 2,500 lei 2.500 lei 6811 = 2813 2.500 lei „operating expenses „depreciation of fixed assets” regarding depreciation and means of transport”  receiving the invoice for insurance services issued by the insurance company: 254,72 lei 613 = 401 254,72 lei „insurance expenses” „providers”  payment by bank transfer of the invoice for insurance services: 254,72 lei 401 = 5121 254,72 lei „providers” „bank accounts in lei” the company will record these operations until the date of completion of the financial leasing contract. costs of financing through the financial leasing contract the expenses that the company must bear monthly can be found in the commission charged by the lessor, the interest related to the financial leasing contract and the amount of insurance expenses. these are maintained at a constant value, at a total of 422.84 lei, of which 148.12 lei interest, 20 lei management commission and 254.72 lei insurance. the monthly installments also bear the vat rate, being deducted from the invoices received from the insurance company and the lessor. the total financing costs amount to 20,747 lei, of which 7,110 lei total interest, 960 lei total management fees, 12,227 lei total insurance paid, the latter registering the highest value of the total costs, and 450 lei the commission file analysis, initially supported. 7 6. conclusions the covid-19 pandemic has affected the activity of all economic entities, which are obliged to adapt their financial and accounting policies to the new requirements. the romanian authorities came to the aid of debtors in difficulty by issuing geo no. 37/2020, which, under certain conditions, helps them benefit from the suspension of payment obligations. the financing decision during the pandemic was affected by a slight increase in interest costs and commissions related to existing financing instruments in romania. in the case of our study, the financial leasing situation and the bank loan offered by banca transilvania were compared. the advantages of credit-based financing are: the asset passes into the beneficiary's patrimony as soon as the contract is signed, there is the possibility of refinancing the loan at another bank, and the beneficiary can determine the period for which he wishes to contract the loan. the disadvantages of credit-based financing are: a longer period of approval of the credit file, the need for additional guarantees and higher financing costs. the advantages of financing based on the financial leasing contract are: the signing of the leasing contract takes place in a short period, the conclusion of such a contract does not require the existence of additional guarantees, access can be made by a wider range of users, the right of use is acquired even if the full payment of the asset has not been made, and the interest expenses are tax deductible. the disadvantages of financing on the basis of the financial leasing contract are: the mandatory payment of an advance as a percentage of the contract value according to the contractual commitment, possession of the asset is possible only at the end of the contract, after the full payment of the installments, through the option shown by the lessee, maintenance expenses and the repairs of the property are borne by the lessee. references [1] david, d. (2009), contabilitatea bancară a creditelor acordate clientelei nefinanciare, editura univers, arad. [2] mihalciuc, c.c. (2019), noi modificări aduse reglementărilor contabile cu privire la contabilizarea şi recunoaşterea în raportările financiare a contractelor de leasing, în conferinţa ştiințifică internaţională „contabilitatea şi educaţia contabilă în societatea digitală” (“accounting and accounting education in the digital society”), ediţia a viii-a, chişinău. [3] molico, t., wunder, e. (2003), leasingul, un instrument modern de investiții și finanțare, editura ceccar, bucurești. [4] vintilă, a. (2004), aspecte teoretice şi practice privind operaţiunile de leasing, curentul juridic, anul vii, nr. 1-2 (16-17). [5] legea nr. 93/2009 privind instituțiile financiare nebancare, publicată în monitorul oficial nr. 259/21.04.2009, cu modificările și completările ulterioare. [6] legea nr. 227/2015 privind codul fiscal, publicată în monitorul oficial nr. 688/10.09.2015, cu modificările şi completările ulterioare. [7] ordinul ministrului finanțelor publice nr. 1.802/2014 pentru aprobarea reglementărilor contabile privind situațiile financiare anuale individuale și situațiile financiare anuale consolidate, publicat în monitorul oficial nr. 963/30.12.2014, cu modificările și completările ulterioare. [8] ordinul ministrului finanțelor publice nr. 2.844/2016 pentru aprobarea reglementărilor contabile conforme cu standardele internaţionale de raportare financiară, publicat în monitorul oficial nr. 1.020/19.12.2016, cu modificările și completările ulterioare. [9] ordonanța de urgență a guvernului nr. 99/2006 privind instituțiile de credit și adecvarea capitalului, publicată în monitorul oficial nr. 1.027/27.12.2006, cu modificările și completările ulterioare. 8 [10] ordonanţa de urgenţă a guvernului nr. 37/2020 privind acordarea unor facilităţi pentru creditele acordate de instituţii de credit şi instituţii financiare nebancare anumitor categorii de debitori, publicată în monitorul oficial nr. 261/30.03.2020, cu modificările ulterioare. [11] ordonanța guvernului nr. 51/1997 privind operaţiunile de leasing şi societăţile de leasing, republicată în monitorul oficial nr. 9/12.01.2000, cu modificările și completările ulterioare. [12] www.ceccarbusinessreview.ro http://www.ceccarbusinessreview.ro/ medimond template agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 14 (2020) traditional marketing versus digital marketing valentina simona pașcalău1, ramona mihaela urziceanu2 1 doctoral school of economics and business administration, west university of timișoara 2 faculty of juridical and administrative sciences, agora university of oradea e-mails valentina.pascalau73@e-uvt.ro, ramona.urziceanu@gmail.com abstract today, the digital economy contributes decisively to increasing competitiveness, especially since a digital transformation involves migrating to new technological models, where digital marketing is a key part of the strategies of users’ growth and loyalty. the internet and digital marketing have become important factors in campaigns, which attract and retain internet users. this study aims to identify the main ways in which users can be gained and retained through the use of digital marketing. digital technologies can monitor behaviours, can analyse the content of requests, problems, assessments, both on the platforms of organizations and on social networks. organizations need to understand how favourable assessments will result in the outcome that the marketing department needs to achieve. keywords: traditional, digital, marketing. 1 introduction online marketing does not differ much from classic marketing, the ultimate goal being sales, regardless of the object of sale (products, services, information, etc.). at the same time, this type of marketing has some distinct features, the integration of the new media into the marketing mic, that leads to new concepts, such as: viral marketing (imitates the viral process), viral mobile marketing, transactional marketing, conversational marketing, internet marketing, digital marketing, interactive marketing. all of these being modalities to attract numerous clients with very low costs and presume a good web design, a comprehensive data base, links, using interactive promotional materials, development of the personal sale, etc. (coltman, t., 2007). when registering the clients into the virtual shop, must be required their permission to send them messages with the company offers and promotions. with the information explosion and the revolution produced by the spectacular evolution of information and communication technologies appeared the concept of digital marketing that synthetized all the activities developed through the information systems that use the binary or digital environment, specific to itc application. thus was born the digital marketing, known also as online marketing, cybermarketing, webmarketing, e-marketing, i-marketing, electronic marketing, digital marketing of marketing on the internet. 2 conceptual delimitations here you must presents your original contribution. the term digital marketing was first used in the 1990s. in the 2000s and 2010s, digital marketing became more sophisticated as an effective way to create a relationship with the consumer that has depth and relevance (coltman, t., 2007). the main disadvantages or weaknesses of traditional marketing are (orzan, 2007): traditional marketing is in many cases considered more expensive in terms of resources (material, mailto:valentina.pascalau73@e-uvt.ro mailto:ramona.urziceanu@gmail.com monetary, human), such as printing brochures, leaflets, catalogues presentation, product sheets (jarratt, d., 2009). also, direct marketing through classic mail is very expensive in terms of the costs of postage, envelopes, etc. and requires more time and staff involved in this activity. marketing research conducted through online questionnaires is much more costeffective than the classic one, which involves many costs. another aspect is the abandonment of advertising companies, which act as intermediaries between the company and organizations or individuals, as in the case of advertisers on tv or radio, or in the written press, who charge quite high commissions. negotiation with a website is often done directly by companies. traditional marketing can be an intensive process, often its tools taking a long time to implement. a physical banner, to be placed in a public location, takes a long time to obtain permits, to create it, etc. a banner on online sites is displayed much faster. the marketing research carried out through the classic questionnaires takes a long time until they are completed by the subjects, until they are centralized, etc. while in the online environment all this takes place very quickly, and the centralization is much simpler, the online questionnaires having the possibility to export the data directly to specialized software for their analysis, such as soss, quantam, stata, eviews etc. also, if there is a mistake in an advertising text that must appear in an advertisement, the procedure is very difficult and time consuming, in all this interning the advertising company as an intermediary, and for prestigious publications you can expect a few months until the desired message appears. traditional marketing is not always available, for example a tv or radio commercial is broadcast at certain times, depending on how it is set out in the contract, while a commercial on a website is available all the time, these being some of the basic attributes of the internet through its infrastructure consist of online servers that are available 24 hours a day, 365 days a year (jaworski, bj, 1993). also, the most representative element of the online presence, the website of the company or of another person, or even the one dedicated to a product, is available all year round, being most of the time updated. traditional marketing has a low interactivity, as it is in the case of direct marketing through classic mail, where it is not known for sure if any feedback will be obtained from potential customers, the company thus having very high costs. also in the case of tv or radio commercials, the exact audience is not known, or in the advertising messages in the written press, it is not possible to estimate how many people noticed a banner they passed. in the online environment, all these aspects can be followed by the fact that most of the time online spots or advertisements have the possibility to click on them to direct us to the parent website of the company they come from or to get more many details about the products or services promoted, these clicks being easily counted, thus obtaining the possibility to evaluate the feedback of potential customers. traditional marketing generally operates locally, while online marketing is global, reducing communication barriers, a website being available in any area of the globe that has access to the internet, while most televisions, radio stations and the print media are only available in a certain geographical area. before, it was exceedingly difficult for a company to provide technical support to its customers, requiring a representation and a service with numerous staff in each country. now, with the advent of global websites, which have identical versions for each country, the only difference being the language spoken in a certain area, this staff has been considerably reduced, with customer support being able to deal with a much smaller staff, many one of the problems being solved through online support from another country. the internet can be considered a free market, where consumers can more easily compare prices for certain goods and services offered by companies than in real life. they can also compare prices in one country with those in another. the emergence of online stores and global sites like ebay or amazon has greatly facilitated the purchase of goods from foreign countries. there was also a freedom on the labour market, so companies in one country can promote their services in another country, such as software companies or websites, which can also place orders from abroad, not being their physical presence in a certain place is necessary. the internet has also reduced communication barriers, so a negative news about a certain company is in a very short time in any area of the globe with online access. the advantages of online marketing over traditional marketing are summarized and listed (orzan, 2007), so we see that online marketing can save money and help reduce the marketing budget, due to the fact that on the internet the transmission of information from the company to the customer or the potential customer is significantly more profitable. for example, an online catalogue can be updated at any time, it can be sent to a very large number of people, all costing almost nothing, while the classic method requires printing costs, postage, shipping staff this, plus the very long time to perform these procedures. the same happens in the case of direct marketing through classic mail, unlike email, which has minimal costs, where only one employee can perform the task for which a team was previously required. the email also reduced telephone calls involving large staff and high costs for companies in service or customer service departments, due to the fact that an email can be answered in a timely manner, unlike a classic letter, with the advantage that the message remains in the memory of the servers of the email service, thus being useful to both customers and the company. some companies also offer online chat support, thus reducing the cost of fixed or mobile telephony. online marketing can save time and reduce the steps of the marketing process, so marketing materials no longer have to wait a long time for printing, they can be uploaded to servers immediately, becoming accessible all the time for potential customers. in the case of the company's customer service, they no longer must write letters or call; now, by sending a simple email this problem is solved much faster. practically, internet marketing puts you in touch with the market much faster, guaranteeing instant access to marketing information: presentation website, catalogues and brochures, online video presentation spots, etc. thus, the online marketing process is much simpler, more accurate and more efficient. adopting digital technologies, online marketing is continuously available, so the online presence of marketing materials is guaranteed by the servers that make up the internet infrastructure 24 hours a day, 365 days a year, and changes to these materials or updates can be made also at any time of the day. this allows a much higher accuracy of the information, so the customer can be better informed about the various promotions, price reductions, special offers and their availability (jayachandran, s., sharma, s., 2005). online marketing is interactive and offers customers another way to shop. interactivity is achieved mainly through personalization, which leads to the interaction between the potential customer and the company. customers in modern society want much more information about the product, they are much more analytical. and the category of customers who purchase products and services online is a very dynamic one, usually with higher education, with a very high analytical spirit, often documenting themselves long before purchasing a product. this whole category of customers is looking for opinions written by other users of a product on forms, blogs or in the comment sections of online stores. all these elements presented provide a much greater interactivity of the online environment, but there are several methods of companies to achieve it, one being the so-called cookies that remember the pages visited from a website and what products attracted the visitor's attention, thus making recommendations or remind him when he enters another time on the site what were he was interested last time. another method is that of interactive argumentation (orzan, 2007), which makes the mentality of mass dissemination disappear, being replaced by a personalized communication, an involvement of the customer in the purchasing process, a focus on real-time satisfaction of prospecting and the immediate provision of advice and information, thus invigorating the company's innovative image and allowing it to differentiate its product portfolio from that of the competition. thus, on many websites customers are allowed to choose the colour for a certain product, the method of transport, the delivery date, the method of payment, or if they change their mind and want to buy that product again, it remains in the shopping cart online with all options selected as long as the product is still available. in conclusion, this interactivity by personalizing the products and services offered ensures visitors a much better percentage of remembering the website where they encountered this, this personalized dynamic of content ensuring much greater customer loyalty and customer choice optimally. 3 conclusions online marketing is global and offers equal opportunities for access to both organizations and individuals. 34% of the planet's population has access to the internet, which means an unprecedented possibility of disseminating information, plus the advantage of the disappearance of physical borders between states (reinartz, w.j., 2003). thus, companies in one country can promote, sell or offer their services in another country, which is a huge advantage for their development. at the same time, hundreds of millions of potential customers around the world can document themselves, or search for or buy products from another geographical location. another advantage is the fact that in online marketing the discriminations related to the ethnic framework, to the type of business, to its size disappear, thus being attacked the monopolies that until now certain companies had in a country in a certain field. the problem regarding the legal aspects disappears, the company from a certain country respecting the legislation in force of that state and not that of the state where it offers its services online. faxing was the first step in removing these barriers, but the internet and email completely eliminated them by ensuring the freedom of movement of written information. thus, the internet contributes to a democratic globalization, and consumers in the online environment, once accustomed to this freedom, will hardly ever give it up, no matter what political regime comes to lead a state. references [1] coltman, t., (2007), why build a customer relationship management capability? , j. strategic inform. systems 16(3), pp. 301–320 [2] ja  rra  tt, d.g. , (2009) , o  rga nі za  tі o  na  l prе сo ndі tі o  nѕ ѕu ppo rtі ng rе la  tі o  nѕhі p ma  na  gе mе nt сa pa  bі lі ty rе nе wa  l, jo  u  rna l o  f ѕtra tе gі с ma rkе tі ng 17(5), pp. 365-381 [3] jaworski, b.j., kohli, a.k., (1993)., market orientation: antecedents and consequences. , journal of marketing, 57(3), pp. 53–70 [4] ja  ya  сha ndra n, ѕ. , ѕha rma  , s., (2005) , ro lе  o  f rе la  tі o  na  l і nfo rma  tі o  n pro се ѕѕе ѕ a nd tе сhno lo  gy u ѕе  і n сu ѕto mе r rе la  tі o  nѕhі p ma  na  gе mе nt. і mplі сa tі o  nѕ o f tru  ѕt a nd dі ѕtru ѕtfo r o  rga nі za  tі o  nѕro lе  o  f сu ѕto mе r o rі е nta  tі o  n і n a   fo u  r-na  tі o  nѕtu dy, і mplі сa tі o  nѕ o f tru  ѕt a nd dі ѕtru ѕt, jo u  rna  l o  f ѕtra tе gі с і nfo rma  tі o  n ѕyѕtе mѕ. сo nсе ptu  a  lі zі ng a   rе la  tі o  nѕhі p ma  na  gе mе nt сa pa bі lі ty, ma  rkе tі ng thе o  ry, pp. 177192 [5] orzan, gh., (2007) , tehnologii informatice inteligente de accesare multidimensionala a bazelor si depozitelor de date de marketing, revista de marketing online, bucharest university of economic studies, school of marketing, vol. 1(2), pp. 29-41 [6] reinartz, w.j. and kumar,v., (2003), the impact of customer relationship characteristics on profitable lifetime duration, journal of marketing ( 67) , pp. 77-99 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 13 (2019) increase of public debt and budget deficit and their sustainability rica ivan1, călin tănase ladar2 1 faculty of electrical engineering and information technology, university of oradea, str. universității, nr. 1, oradea, romania 2 faculty of environment protection, university of oradea, str. universității, nr. 1, oradea, romania e-mails rika_ivan2005@yahoo.com, ladarcalin@yahoo.com abstract taking into account the need to ensure a standard of living adequate for citizens, by providing jobs, infrastructure, housing, etc., governments seek to allocate resources for that purpose, most often exceeding the ability to collect revenues to state budget and thus leading to accumulation of budget deficits and, implicitly, to increased public debt. economic growth is the most important instrument for achieving the social and economic objectives of a central government. all these elements aforementioned intertwine with the external economic environment, the evolution thereof, while negative effects such as the economic crises have a contagious effect on the economy and society in general. after the economic and financial crisis of 2007, the public debts of the states increased, and the sustainability of the public finances has become a matter of major concern. keywords: public debt, budget deficit, economic growth, debt crisis, european union, sustainability. 1. introduction the first economist who addressed the issue of financing government spending through loans or by raising taxes and levies was david ricardo, who in his fundamental paper "principles of political economy and taxation" advocated for debt neutrality, because taxpayers should be aware that loans accumulated in time by the government shall lead to tax increases in the future (kishtainy, 2012). this theory, whereby budget deficits were considered hazards since they led to economic ruin, was seriously challenged by the great crisis of 1929-1933, at which point john maynard keynes argued that overcoming economic crisis can only be achieved through state intervention in the economy, and this intervention entails making loans and an increased budget deficits in order to stimulate public spending, which will create thereafter jobs creation and implicitly will support economic welfare. nowadays there are still supporters of the theory of debt neutrality, such as economists robert barro, robert lucas and thomas sargent who belong to the new school of classical macroeconomics, as well as supporters of keynesian theory, such as hyman minsky and paul krugman. as we have shown above, the central topic of the supporters of the neoliberal macroeconomics school is fiscal prudence according to which governments should not spend more than they collect, since spending more than the budgetary revenues generate inflation and undermine economic stability, which affects economic growth and decrease the standard of living of those with fixed incomes. the supporters of the neo-keynesian economics argue that the public budgets must be balanced, but not on annually basis, but following an economic cycle, since it is necessary to make some extra-budgetary expenses during the economic downturn and to generate budget surplus during the upward trend in a country. it is normal for a developing country to make medium-term extra-budgetary spending on a steady basis as long as the debt is sustainable (h.j chang, 2012). 2. definitions mailto:rika_ivan2005@yahoo.com mailto:ladarcalin@yahoo.com 2 the term public debt generally refers to the debt of a country made as a result of contracting loans by central and local governments from legal and natural persons residents in the territory of that country or abroad and which are to be repaid at a certain time. thus, the public debt can be external or internal, and its structure differs depending on development level of a country. thus, in the economically developed countries the internal debt has a larger share in the public debt, while in the less developed countries the external debt has a higher percentage in the public debt. there is no single definition of public debt for which there several approaches, both in the narrow and the broader sense. according to the national bank of romania (nbr) and the esa 2010, government debt is defined as the total consolidated gross debt in nominal terms at end of period for the following categories of government liabilities (defined in esa2010): currency and deposits, securities other than shares excluding financial derivatives, and loans. the public debt is correlated with a country’s budget deficit. states are looking to contract loans, in particular, to finance the government's budget deficits. according to the nbr, the government deficit/ surplus is the net financing requirement for the running of the public administration. the debt of a country is formed by the sum of the debts generated by the central and local governments of a state, and by the public and private companies that operate in a national economy. public debt is a necessary tool for governments to finance public spending, especially during periods when there is no possibility to increase taxes or to reduce public spending. increasing a country's public debt can lead to economic instability and even generate economic downturn. a high level of public debt in gdp is perceived as an economic problem by investors and policy makers, because it can negatively influence the capital market and can trigger decreased investments, reduced employment and negative economic growth (coccia, 2018). the public financial imbalance is underpinned by the budget imbalance. the public financial imbalance occurs as a result of the increased demand for financial resources in relation to the revenues obtained by the state from taxes and levies. increasing or decreasing public debt is directly related to the evolution of budget deficits. if the public expenses are higher than the public revenues, there are created prerequisites for the need to make loans in order to cover such expenses and thus contributing to the increase of the public debt. 3. an overview of debt in the economies of european countries most of the economies of the european countries are characterized by high public debt and a significant fiscal deficit. states with high public debt are facing many problems when contracting international loans, as was the case in greece in 2012, if they do not accept repayment plans established by creditors, in order to maintain access to the international market and sustainable interest rates with regard the sovereign debt. the credibility of governments with regard to the management of public debt depends not only on the reputation of the debtors, but also on the financial institutions that would be able to prevent the occurrence of defaults. romania, as a member of the european union, has pledged itself to respecting the budgetary discipline imposed by the maastricht treaty, namely not to exceed a budget deficit larger than 3% of gdp and public debt larger than 60% of gdp. these levels are based on concepts defined in the methodology of the european system of national and regional accounts (esa) 2010 edition. due to the occurrence of the debt crisis in the countries of europe, the ability to repay and rescheduling the debts of certain european economies has become a matter of major concern for the european union (eu), with question marks regarding the economic integration thereof. following the outbreak of the 2007 financial and economic crisis, international monetary fund (imf) imposed on developing countries, including romania, budgetary balancing conditions 3 or even the requirement to register a surplus, regardless of the stage in which the country is within an economic cycle or the development strategy of that country. in the first years after the global economic crisis, many countries and financial institutions in europe emphasized the implementation of austerity programs to cut the large budget deficits they faced. the effect of these measures on the evolution of public debt in the national economies of europe remains uncertain and difficult to assess. reinhart and rogoff (2010) have shown that public debt calculated as a share of gdp can have a detrimental effect on the real gdp growth rate. thus, if the public debt to gdp ratio is more than 90%, this may slow down economic growth. this slowdown occurs because financial resources of future generations shall be used to pay interest on current public debts. moreover, the very existence of a high debt also implies a reduction of the margins of manoeuvre with regard the decrease of taxes and levies. it is considered that a reduction of taxes and levies will lead to the improvement of the economic situation in the long term, but, in the short run, it will result in the deterioration of the public debt. subsequently, the study carried out by reinhart and rogoff proved to be wrong, which affected the economy of the countries which were imposed harsh austerity programs by the imf. thus, olivier blanchard, chief economist of the imf, pointed out that the fund misjudged the impact of austerity on european economies, considering that the researchers underestimated the increase in unemployment and the decrease in domestic demand associated with fiscal consolidation (blanchard, 2013). the consequences of the austerity budgets, for which budgetary expenditures were drastically reduced, consisted of the reduction in gdp per capita in 2012 compared to 2007 by 26% in greece, 12% in ireland, and 7% in spain. thus, it was found that reducing government spending in a stagnant or shrinking economy does not trigger its recovery (h.j chang, 2014). 4. sustainability of romania's public debt romania has recently expressed its intention to join the euro area. however, it is a country where the budget deficit and public debt have increased. for 2019, there are forecasts for a budget deficit of up to 3% of gdp and a public debt of around 40% of gdp. recently, the new liberal government has expressed its intention to increase this deficit up to 3.5% or even 4.4%. romania has a significant deviation from the medium-term budgetary objective of 1% of gdp provided by the eu "stability pact". thus, the eu council recommends that the romanian authorities take the necessary measures to ensure that the increase rate of net primary government expenditure falls within the established limits, but it is noted that no measures have been taken in this respect. thus, the eu commission draws attention to the risks and vulnerabilities the romanian economy faces, such as the unsustainable increase of the level of public debt burden (instalment payments + interest rates) in the coming years, with obvious foreseeable negative effects on the standard of living of romanian people. fig. 1 the evolution of romania's public debt (1990-2018) source: https://datoria.ro/ 0,9 8,62 20,4521,9517,5421,61 28,7427,3627,7132,6731,1128,5828,7425,8422,4420,3118,2519,6820,94 28,8629,9134,19 37,2737,7639,3937,9937,5635,1434,9535,09 0 20 40 60 1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 .5 share of public debt of romania in gdp 4 the sustainability of public debt is calculated by the dynamics of government debt in gdp and not by the dynamics of the amount in absolute terms. romania has the fifth lowest share of government debt in gdp among eu28 members states, i.e. 34.2% of gdp, according to the latest data published by eurostat in the second quarter of 2019 well below the alert threshold calculated at 45% of gdp; it has also benefits from a reduced pressure of short-term debt service and a diversified investor base. long-term foreign debt was approximately € 73,831 million in september 2019, while the short-term external debt was € 34,407 million. according to nbr data, in 2019 the degree of short-term external debt coverage with foreign exchange reserves was 77% compared to 74.3% at 31.12.2018, which indicates a lower probability of facing liquidity crisis. from this point of view, the concerns of the eu commission do not seem to be well founded, but such concerns concern the stagnation of the structural reforms and the fiscal-budgetary consolidation, given that year-to-year romania's economic growth is mainly due to stimulating the consumption led growth and not due to production-led growth drivers. before the onset of financial and economic crisis of 2007, romania's public debt has been relatively small, around 20% of gdp, but it doubled by 2014. the main cause was the increase of the budget deficit, caused by the bankruptcy of many companies, the increase of unemployment rate and disintermediation in the banking system overwhelmed by accumulation of defaults. the factors underpinning the sustainability of the public debt are as follows: the ability of a country's economy to generate primary surpluses, the size of interest on state loans, the risk premium attached, and its own economic growth rate (socol, 2013). thus, for the level of public debt in the coming years to be sustainable it is necessary to reduce the primary deficits and/or to generate primary surpluses. one possible solution would be that the interest rates on loans made by the romanian state do not exceed the rate of economic growth of our country. 5. social and environmental limits of economic growth in recent decades, both from a macroeconomics and a microeconomics perspective, the level of debt has increased. this was not due to the shortages, but to the surplus and excess. the society did not suffer from hunger, but faced another dilemma: how to offer a meal to someone who ate too much (sedlacek, 2012). the global financial and economic crisis of 2007 shows how much dependence there is on economic growth and how difficult it is to accept the decline of gdp, an indicator introduced and measured consistently, for the first time in 1790 in the u.s.a. the lack of constraints on government decision-makers regarding spending, taxation or borrowing leads to a significant increase in public debt, and the new generations of taxpayers are facing insurmountable tax burdens. those countries where there is an increase in terms of employed economically active population benefit from greater room to manoeuvre in terms of tax cuts, leading to a reduction in long-term pressure on public budget. even if lowering taxes has a short-term beneficial effect on the government budgetary situation, if this tax reduction takes place amid a reduction in terms of employment of the active population, it can lead to a deterioration of the long-term budgetary situation of that country. since public debt is measured as a percentage of gdp, a reduction of debt in order to avoid economic turmoil can be achieved by supporting gdp growth through investment and gdp expansion policies, rather than by reducing public debt through additional taxation measures. the way in which interest rates are set by central banks can influence public debt both in terms of current financing conditions and in terms of government expectations. thus, central banks have a key-role in determining the government to pursue public debt stabilization policies. 5 it should be stressed that the gdp level is not a landmark for quality of life and no landmark for economic sustainability. there are extremely important elements, which escape the scope of gdp, such as the assessment of health status, education level, housing conditions of the people, quality of the environment, which are subjective, but also very important elements in human society. gdp is an indicator specific to the present time. it does not take into account what remains to future generations, especially in terms of quality of the environment. sustainability is a milestone of ongoing developments. we may state that an economy is sustainable if the future generations will have at least the same capital (resources) we have at our disposal today. therefore, it is about the aggregation of several types of capital (resources): economic capital (corporate, household and public sector’ assets), human capital (educational expenses) and natural capital (environment) (diemer, 2015). under the aegis of the european commission, a report was prepared (stiglitz sen fitoussi, 2009) in order to find those tools that are able to quantify, at its true scale, the economic performance of a country, and set a set of 12 recommendations were made, of which we mention the one that underlines that the assessment of sustainability requires a set of clearly defined indicators, which will allow the measurement of the quality of life’s dimension in addition to a monetary index. the issue of pace and limits of economic growth was discussed and debated upon on several occasions, starting with thomas malthus, and continuing with the club of rome, until now when climate change affects large areas of our world. economic growth has its limits, the density of the earth’s human population has been increasing, and the discovery of new deposits of raw materials is declining. although economic and technical progress supports the economic growth, it is very unlikely that energy supply failures or natural resources shortcoming will not occur in the future, in order to keep the annual growth rate of gross world product (gwp). in order to prevent the depletion of resources used in production, the pace at which they are consumed must be reduced (kolodko, 2014). 6. conclusions the advanced economies should aim at slowing down their economic growth pace and, while doing so, they should not be constrained by the social and ecological restrictions, as increasing production does not trigger automatically an increased level of social satisfaction. developing countries need to be aware that implementation of their aim to accelerate production growth is at the expense of environment safety and generate a rapid depletion of natural resources, ultimately leading to a lower quality of life. according to prof. jorgen randers the author of a comprehensive global forecast based on an unprecedented calculation of gwp – by multiplying the number of people aged 15 to 65 who are able to work worldwide with the output they generated, the output it will grow year by year, but the rate of economic growth will decrease by 2050 (randers, 2012). the current state of play together with the future constraints will trigger a change in the perception of the economic development of the countries, and the companies shall be evaluated not only by their financial statements, but also by the social and environmental impact of their operations. the interventionist role of the state and the importance of resource allocation related policies by governments shall increase, because the market will not be able to cope by itself with the problems that will arise in the process. references [1] blanchard olivier, leigh daniel(2013), growth forecast errors and fiscal multipliers, imf working paper, wp/13/1 [2] chang ha-joon (2012), samaritenii cei răi. mitul liberului schimb și istoria secretă a capitalismului, editura polirom, 58-60 6 [3] chang ha-joon (2014), economia. ghidul utilizatorilor, editura polirom, 152-154 [4] coccia m. (2018), national debts and government deficits within european monetary union: statistical evidence of economic issues, coccia lab working paper 2018 – no. 34/bis [5] diemer mr. (2015), la croissance économique. iufm auvergne, partie ii, chapitre 4 [6] kishtainy niall (2012), the economics book: big ideas simply explained, dorling kindersley limited, pp76-77, 298-299 [7] kolodko, grzegorz (2014), whither the world: the political economy of the future, palgrave macmillan, pp 227-260 [8] reinhart c.m., rogoff k.s. (2010), growth in a time of debt, the american economic review, vol. 100, no. 2, pp. 575 [9] sedlacek tomas (2012), economia binelului și a răului: în căutarea sensului economic de la ghilgameș la wall street, editura publica, pp. 380-387 [10] socol, a. (2013). sustenabilitatea datoriei publice în contextul crizei financiare, economie teoretică şi aplicată, volumul xx, no. 3(580), pp. 4-14 [11] stiglitz j.e., sen a., fitoussi j.p (2009), report by the commission on the measurement of economic performance and social progress, http://www.stiglitz-sen fitoussi.fr [12] banca naţională a româniei (www.bnr.ro) [13] http://www.aeepapers.ase.ro/wp-content/uploads/2018/09/asigurarea-fiscala-si-managementul-datorieipublice.pdf [14] https://ec.europa.eu/info/sites/info/files/2019-european-semester-country-specific recommendationcommission-recommendation-romania_ro.pdf comisia europeană, recomandarea consiliului privind programul național de reformă al româniei pentru 2019, bruxelles, 5.6.2019, p. 3-4 [15] https://ec.europa.eu/eurostat/databrowser/view/teina230/default/table?lang=en [16] https://datoria.ro/ [17] https://www.cisl.cam.ac.uk/resources/publication-pdfs/jorgen-randers-2052-a-global-forecast-for-thenext.pdf http://www.stiglitz-sen/ http://www.bnr.ro/ http://www.aeepapers.ase.ro/wp-content/uploads/2018/09/asigurarea-fiscala-si-managementul-datoriei-publice.pdf http://www.aeepapers.ase.ro/wp-content/uploads/2018/09/asigurarea-fiscala-si-managementul-datoriei-publice.pdf https://ec.europa.eu/eurostat/databrowser/view/teina230/default/table?lang=en https://datoria.ro/ https://www.cisl.cam.ac.uk/resources/publication-pdfs/jorgen-randers-2052-a-global-forecast-for-the-next.pdf https://www.cisl.cam.ac.uk/resources/publication-pdfs/jorgen-randers-2052-a-global-forecast-for-the-next.pdf agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol 10 (2016) 41 the purchase behavior of the consumer urziceanu ramona-mihaela 1 , paşcalău valentina-simona 2 abstract the paper describes the types of purchase behavior of consumers and the stages of decision made by the purchasing of the consumer, the approach in which the personal factors can affect the decision made by the purchasing of the consumer, the psychological factors which can affect the decision made by the purchasing of the consumer, the examination of the social factors that influence the decision made by the purchasing of the consumer and why is it so important that marketing has to understand consumer purchasing behavior. keywords: behavior, consumer, purchase, marketing, factors, decision introduction marketing is defined in many ways, in the academic research or in the applied business purposes; marketing is the process of planning and executing of the conception, promotion and distribution of ideas, goods and services, to conduct exchanges that satisfy individual and organizational goals. marketing is one of the most essential tools for business success through business orientation towards the market, in other words, customer orientation. the study of consumer behavior became a concern for marketers, as they can learn how buyers choose their goods and services to satisfy the many needs that are stimuli, factors that influence their choice. the consumer purchasing behavior, as recent research field of marketing, refers to the behavior of final consumers who purchase goods and services for personal consumption individuals and households by fulfilling the current requirements or indicate their role in society. marketing deals with the concept of consumer behavior both narrowly and broadly. the american marketing association defines consumer behavior as "an interaction on impression and perception, behavior and common natural events that human beings direct their changes in their lives." the consumer behavior is defined as "all acts of individuals directly related to the purchase of goods and services, which includes the whole decision-making process that precedes and determines these acts". 3 there are three essential elements that define human behavior: stimulus that is cause; need is a desire that can be achieved; the objective of which is its purpose. as the needs multiply exponentially due to technical and scientific progress, leads to the invention of others and the need of satisfy leads to others, obviously the individual behavior changes, too. it is also important to remember some key points for defining consumer behavior:  the consumer behavior is dynamic, both because of the time evolution of generation of consumers faced with the changes which they produce and due to the emergence of new factors directly influencing their behavior. the overtime change, determine the leading producers to monitor the safety of customers to have a real perception, fairly;  the consumer behavior is the individual's reaction to various endogenous and exogenous variables.  the consumer behavior, involves the successive or simultaneous actions for selecting an alternative, resulting in decisions 4 . the consumer behavior is a complex system of events, attitudes, motivations, decisions; 1 agora university of oradea, romania, e-mail: ganearamona2002@yahoo.com 2 agora university of oradea, romania, e-mail: simonavali@yahoo.com 3 o.c..ferrel, william m.pride, marketing,. houghton mifflin company publishing house, boston ,1991, p.140. 4 p. mâlcomete (coord.), lexicon de marketing, junimea publishing house, iaşi, 1994, p.67. 42  the development of human individuality both naturally and through education is reflected in his behavior through preferences, dislikes, beliefs, attitudes and values, in the position occupied in society, in the attended entourage, etc. thus by combining individual circumstances and psychology will influence the purchasing decisions of each individual;  the consumer behavior determines interactions and therefore it is important to know "what consumers think (perception), feel (impression) and what do they do (behavior), what are the things and places that influence" 5  the consumer behavior determines changes between people and therefore "if the relationship between the consumer who demands and the producer, who offers on the market, mutual understanding is essential in the purchase process and in the production of goods and services" 6 .  the scope of consumer behavior widens, especially due to the development and diversification of the services sector in the no labor sphere. as a result "within the current social marketing meaning, the consumer behavior requires such a comprehensive approach to express the position of the people to all tangible and intangible assets arisen in the final consumption" 7 the stages of decision made by the purchasing of the consumer in the literature we find five stages (phases, stages, and moments) to adopt a complex decision: identify the problem, search for information, evaluation of alternatives, the choice, post-purchase evaluation. 8 the involvement of the consumer in every stage of the decisional process is reflected in the cognitive behavior (the utility and affective motivations are focused on the functional characteristics of the product), 9 and the intensity has its roots in the importance of the product or service for the consumer and the risk that it involves his purchase. ”as a result, it can delineate the low, medium or highly involvement, as shown in the following table. therefore, the concept of the involvement of different types presents: 1 the poor involvement decisions, which does not mean a proper decision, because the experience provides a unique solution preferred, the product being purchased. so, the decisions are taken on the basis of routine, an important role being played by fidelity, like learning. it results from the repeated purchases. 2 the decisions with strong involvement are usually complex decisions that go through all the decision making stages if we consider how the purchase decisions are done, we can classify them in: 1 scheduled decision – characterized by repetition and similarity in the way of adoption. they are routine decisions for the purchase of most products and services with high frequency and high fidelity; 2 unscheduled decision – it refers to new situations, restructured and they have strong financial and psychological implications, because there is no precedent that involves greater risk and have a more complicated structure. if you take into account the level of effort expended for the decision, going through the phases determined by the rate decision-making process, the nature of the products and the importance given decision, it defines five distinct shopping categories: 1 impulse shopping made unplanned due to a motivation instant, sudden, driven mainly by visual stimulus, asks minimal effort; 2 routine shopping which are regularly planned without great expense of time and effort; 3 family shopping commonly consumed product, but the consumer is willing to extra effort for another version of the product. in this situation the advertising plays an important role; 4 unfamiliar shopping involve a great effort, the decision process is lengthy because it uses different criteria for purchase; 5 j. blythe , comportamentul comsumatorului, teora publishing house,1998, p.11. 6 i. mihuţ, m. pop, consumatorul şi managementul ofertei , daciapublishing house, cluj – napoca 1996, p.14 7 p. mâlcomete ,marketing , academicăpublishing house – gh. zane, iaşi l993, p.51. 8 o.c.ferrel, william m.pride, marketing, ed. houghton mifflin company, boston, 1991, p.142. 9 c.w. park, s.m. young – “consumer response to television commercials, the impact of involvement and background, music on brand attitude formation” – journal of marketing research, 1986, 23,1 p.11-21. 43 5 critical shopping involving high risk and therefore a special effort to get information and compare options.” 10 table1 the involvement of the buyer in the stages of decision characteristics low medium high type routine partial solution of the choice complete resolution of the problem of choice problem related selective generic generic information reuest limited intern external limitation intern extern the alternative rating intern few attributes simple decision rules few alternatives many attributes complex decision many alternatives purchase purchase purchase purchase post purchase behavior without dissonance limited rating without dissonance limited rating dissonance, rating complex rating source: sica stanciu, ” bazele generale ale marketingului”, http://ebooks.unibuc.ro/stiinteadm/sica/5.htm factors determining consumer behavior dubois and jolibert group the factors that influence consumer behavior 11 in:  individual factors, which include: personality, cognitive style, lifestyle and perceived risk;  environmental factors, which include: socio-demographic factors (curve family life, social classes), reference groups, family, economic environment. in the extensive analysis that makes of consumer behavior, ph. kotler starts from analyzing the factors which influence 12 , in groups:  cultural factors represented by: culture, subculture and social class;  social factors which include reference groups, family, roles and statuses;  personal factors relating to: the age and stage of life cycle, occupation, lifestyle, economic circumstances, personality and opinion of oneself;  psychological factors nominated by: motivation, perception, learning, beliefs and attitudes. conclusion knowing all these types, shapes, situations has a great practical importance, as the purchaser acts as an active partner and imperative in the economic transaction and the seller must be equally active and conscious, using marketing tools, to help the potential buyer. currently, all marketers agree that "the buying process begins and ends long before the actual purchase" 13 customer orientation does not mean that we must do everything the customer claims, but to recognize his needs and to offer services and products that bring real use. in doing so, we can transform the client in collaborator and, in turn, he will recommend us to others. increasing the level of knowledge held by consumers, the availability of information and instant communication are factors that determine the almost total transparency for companies globally. bibliography 10 sica stanciu, ” bazele generale ale marketingului”, http://ebooks.unibuc.ro/stiinteadm/sica/5.htm 11 p.l. dubois, a. jolibert, marketing teorie şi practică, universitatea de ştiinţe agricole, cluj-napoca, vol. i, 1992, vol. ii, 1994. 12 ph. kotler, managementul marketingului,. teora publishing house, bucharesti 1997. 13 ph. kotler , g. armstrong , j. saunders , v. wong , principiile marketingului, teorapublishing house, bucharest, 1998. http://ebooks.unibuc.ro/stiinteadm/sica/5.htm http://ebooks.unibuc.ro/stiinteadm/sica/5.htm 44 1. blyhte jim, “comportamentul consumatorului”, eitura teora, bucureşti, 1998. 2. dubois pieré-louis, jolibert alain, “marketing teorie şi practică”, universitatea de ştiinţe agricole, cluj-napoca, vol. i, 1992, vol. ii, 1994. 3. ferell o.c., william m. pride, marketing, editura houghton mifflin company, boston, 1991. 4. kotler philip, “managementul marketingului”, editura teora, bucureşti 1997. 5. kotler philip, armstrong gary, saunders john, wong veronica, “principiile marketingului”, editura teora, bucureşti, 1998. 6. mâlcomete petre, “marketing”, edituraacademica “gh. zane”, iaşi, 1993. 7. mâlcomete petre (coord.), “lexicon de marketing”, editura junimea, iaşi, 1994. 8. i. mihuţ, m. pop, consumatorul şi managementul ofertei , editura dacia cluj – napoca 1996. 9. c.w. park, s.m. young – “consumer response to television commercials, the impact of involvement and background, music on brand attitude formation” – journal of marketing research, 1986. 10. sica stanciu, ” bazele generale ale marketingului”, http://ebooks.unibuc.ro/stiinteadm/sica/5.htm http://ebooks.unibuc.ro/stiinteadm/sica/5.htm agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 12 (2018) entrepreneurial marketing from the perspective of strategic innovation valentina-simona pașcalău1 1 agora university of oradea, tineretului square str., no. 8, oradea, romania e-mails valentina.pascalau73@e-uvt.ro abstract the purpose of this paper is to identify the implications of strategic innovation in entrepreneurial marketing. this article aims to define and analyze concepts such as: entrepreneurship, entrepreneurial marketing, innovation, innovation management. we will also present the priorities in the reconceptualization of marketing, we will discover the approach of strategic innovation, strategic thinking in marketing and the issue of strategic thinking. keywords: entrepreneurial, marketing, strategic, innovation, management. 1. introduction peter drucker affirm that “innovation is the specific tool of business people, the method by which they exploit change for the benefit of a new business or a new service. it can also be presented as a discipline that can be learned and practiced. businesses need to look for the sources of innovation, change and clues that provide opportunities to innovate. and he needs to know how to apply the innovations and success principles of something new. ” the main goal is to be known as a brand, it would be ideal to stand out from the start-up phase precisely through innovative ideas, it contributes to an industry that often sets the standard to be followed by other industries. in order to maintain a competitive advantage and maximize value, innovation is the key to success, but if, on the one hand, opportunities are identified to "change the game", on the other hand, there is a risk of losing money on new technologies that have not been proven, for the time being, to be feasible in the market in which we operate. also, in order to survive, we must invest in the quality of manufacturing and research, the lack of action allows competitors to surpass us. innovation is imperative for companies that want to remain competitive and meet the demands of the changing market. innovation is no longer just about creating a sustainable product, companies are forced to innovate across the full spectrum of processes, products, technologies and business models. technological innovation offers the opportunity to create something new every day, but few industries are as prone to such high-speed development as the footwear industry. designers have more design and development opportunities than ever before, whether it's a new material or technology. 2. the concept of entrepreneurship and entrepreneurial marketing mailto:valentina.pascalau73@e-uvt.ro 2 entrepreneurship is a “dynamic process of vision, change and creation. it requires the application of energy and passion in the direction of creating and implementing new ideas and creative solutions”(kuratko & hodgetts, 2004). in the vision of hisrich (1992), entrepreneurship is the process by which a product / service with high added value is created, allocating the necessary time and effort, assuming financial, psychological and social risks, obtaining monetary rewards and personal satisfaction. "in a turbulent environment, entrepreneurial actions have a high relevance, the marketer must act as an innovator, entrepreneur and as an agent of change" (morris, schindehutte & laforge, 2002). the central idea of entrepreneurship is the "new entry" into a new or existing market, with a new or existing product, the creation of new products with a high degree of innovation, the creation of new organizational forms, the creation of new markets, the creation of new sources of value for the customer. entrepreneurial marketing is the behavior of an individual or an organization that adopts a philosophy of challenging current market conventions during the process of developing new solutions. the entrepreneurial behavior of an organization can be monitored by creating strategies, structures, systems and organizational cultures. the rational model of entrepreneurial behavior is reflected in determining future organizational performance objectives, reviewing conventional factors influencing performance, analyzing the possibility of achieving objectives by complying with conventions and developing an entrepreneurial plan to meet performance objectives using unconventional concepts entrepreneurial organizations have specific characteristics such as: innovation in the product market and technology, risk-taking, proactivity in seizing opportunities, initiating actions that respond to competition, initiating high-risk projects and high-income opportunities and trying to place in a position of technological leadership and research and development. the key elements of the rational approach in entrepreneurial marketing are: systematic analysis of the situation, evaluation of alternative actions and definition of appropriate, conventional or unconventional actions. 3. innovation as a process innovation is a process of transformation, an improvement of an opportunity in a new idea and its capitalization by creating a practical use on a large scale. industrial innovation includes the technical, design, manufacturing, managerial, and commercial activities involved in marketing a new or improved product (freeman, 1982). innovation allows an organization to create a competitive advantage, through the real challenge of innovation, ensuring its technical and commercial feasibility. innovation is also a process of developing ideas into practical use, developing and exploiting new knowledge that is not limited to inventing it. innovation should not be confused with invention, the latter being only a first step in the process of transforming an idea for widespread and effective use. innovation is determined by the ability to see connections that can lead to completely new possibilities to use / capitalize on radical technologies, to identify opportunities and to take advantage of them, to identify where and how new ones can be created and developed markets and to identify new ways to serve current and mature markets. innovation is a key process associated with the radical renewal or change of what it offers, of the way it creates and delivers that new offer. 3 thus, the innovation process may include: generating new ideas that may be inspirational in nature, from permuting from another context, from understanding user needs, from advanced research, from combining existing ideas into a new one or from building models alternatives for the future. innovation also includes selecting the best ideas and implementing new ideas that ensure a balance between resources, time and budget on the one hand, the probability of market success on the other. 4. strategic innovation and management the success of innovation depends on the company's resources (human resources, financial resources, knowledge, equipment, etc.) and the company's capabilities to manage these resources. innovation management must ensure a balance between the manifestation of creativity and the discipline that ensures the achievement of things. an innovative company combines good ideas with a motivated staff and an instinctive understanding of what the customer wants (richard branson). success in innovation management depends on the following factors: understanding what we are trying to manage, understanding the strategy that shapes the innovation we achieve by answering the questions “what? why? and when?”, understanding the conditions under which this can be achieved and understanding innovation management as a process of building dynamic capabilities. the continued development of the new digital economy intensifies the need for strategic innovation to improve performance, but many managers fail to provide adequate support for efforts in this direction. managers do not focus on providing the necessary support for the strategic renewal and reinvention of the company, and this is due to a specific mentality of the industrial economy that seeks to routinize and stabilize the company. strategic innovation is not limited to product innovation, but transforms knowledge creation and innovative action into a way of life, seeking to create and expand markets rather than just responding to customer demand, by redirecting resources from profitable business lines to potentially more profitable business lines in the future. successful strategic managers use creativity and innovative action to access and capitalize on organizational potential. these managers reinvent the business model and renew relationships to increase customer value and maintain the company's competitiveness. regarding the approach to strategic innovation (abraham & knight 2001), the growth of the new digital economy intensifies the need for strategic innovation in order to improve performance, many managers failing to provide adequate support for efforts in this direction. the failure to provide the necessary support for the strategic renewal and reinvention of the company is due to a mentality specific to the industrial economy that seeks to routinize and stabilize the company. strategic innovation is not limited to product innovation, ensuring the link between resources and efforts of the overall business strategy. strategic innovation turns knowledge creation and innovative action into a way of life, seeking to create and expand markets rather than just responding to customer demand, redirecting resources from profitable business lines to potentially more profitable business lines in the future. successful strategic leaders use creativity and innovative action to access and capitalize on organizational potential. they reinvent the business model and renew relationships to increase customer value and maintain the company's competitiveness. 5. strategic thinking in marketing and the issue of strategic thinking in the literature we find various definitions of the concept of strategic thinking. 4 strategic thinking is the distinct managerial activity that aims to discover new, imaginative strategies that can rewrite the rules of the competitive game and view the potential future in a significantly different way from the present (goldmann , 2007). abraham (2005) states that strategic thinking is a process of discovering alternative ways to compete and provide value for the customer, and in the opinion of south (1981) it is a thought process that ensures the focus on the right strategic themes and a common frame of reference for discussing and reviewing the strategy. from the perspective of struebing (1996), strategic thinking is the dynamic process of continuous review of the mission, strategies and activities related to customer needs and market forces, and bonn (2005) states that it is a way of solving strategic problems that combines the rational approach convergent with the process of creative and divergent thinking. according to moon (2013) is a way to solve strategic problems that combines a rational and convergent approach with a creative and divergent process to discover alternative ways to compete and ensure value for the customer. strategic thinking is characterized by: creativity, experimental nature, disruptive character, focus on intention, intelligent opportunism (liedtka,1998), focus on the future, systemic / holistic approach and hypothesis-oriented approach. the work experiences that contribute to the development of strategic thinking are: general work experiences, mentoring experience, monitoring results / benchmarking, holding a senior executive position (ceo), managing a strategic initiative for major company growth, challenges that the employee must cope with them, managing a threat to the company's survival and involvement in strategic planning (goldman & casey , 2010). fig.1. model of learning to think strategically (goldman&casey) 5 the elements of strategic thinking at organizational level are: systemic thinking, approaching the organization as a holistic system, an integrative perspective that requires understanding internal and external organizational dynamics, creative thinking, seeking new approaches and seeing better ways of action, creating new combinations of existing ideas, vision-oriented thinking and marketoriented thinking. fig.2. model of strategic thinking (moon 2013, p.1699) 6. conclusions understanding the object of innovation is reduced to four dimensions of change, namely: product innovation materialized in changes in products or services offered, process innovation materialized in changes in the way things are created and delivered, innovation of position materialized repositioning of product / service perceptions / brand in the context of the user and the innovation of the paradigm materialized in the changes of mental models that determine what the organization is doing today. managerial practices for motivating strategic thinking refer to ensuring congruence between employees and tasks whose performance involves the use of their experience and skills, ensuring employee autonomy in how to approach their work, providing the necessary resources, establishing support work teams, encouraging recognition by supervisors and creating a climate in which the entire organization supports creative efforts. based on our findings, we offer the following managerial recommendations. first, avoid too extensive analyzes of a very large volume of data that can unduly complicate the decision-making process. the second recommendation refers to the use of knowledge obtained by managers from previous experiences in order to increase effectiveness and, finally, the use of intuition to identify entrepreneurial solutions in the situation where the solution generated by rational analysis is not viable. when an entrepreneurial idea is recognized as superior to existing conventions, the new idea is quickly adopted by other organizations and becomes the new convention in the sector. 6 references [1] abraham, j. l., & knight, d. j. (2001), strategic innovation: leveraging creative action for more profitable growth, strategy & leadership, 29 (1), 21–26 [2] abraham, s. (2005), stretching strategic thinking, strategy & leadership, vol. 33, no.5, 5-12 [3] bonn, i. (2005), improving strategic thinking: a multilevel approach, leadership and organizational development journal, 26(5), 336-354 [4] drucker, p. (1985), innovation and entrepreneurship, harper collins publishers [5] freeman, c. (1982), the economics of industrial innovation, 2nd edition, francis pinter, london [6] goldman, e.f. ( 2007), strategic thinking at the top, mit sloan management review, 48, 75-81 [7] goldman, e.f., casey, a. (2010), building a culture that encourages strategic thinking , volume: 17 issue: 2, 119-128 [8] hisrich, r.d. (1992), the need for marketing in entrepreneurship, journal of consumer marketing, 9(3), 43 [9] kuratko, d. f. and hodgetts, r. m. (2004), entrepreneurship: a contemporary approach., thompson, 30 [10] liedtka, j. (1998), strategic thinking; can it be taught?, long range planning, 31, (1),120-129 [11] moon, b.j. (2013), antecedents and outcomes of strategic thinking, journal of business research, elsevier, vol. 66(10), 1698-1708 [12] morris, m. h., schindehutte, m. & laforge, r.w. (2002), entrepreneurial marketing:a construct for integrating emergingentrepreneurship and marketing perspectives, journal of marketing theory and practice,10(4), 1–19 [13] struebing, l. (1996), strategic plans don’t produce desired results, quality progress, vol. 29, issue: 6, 22 agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 108-114 108 harmonization of environmental management accounting tool for managing economic reconfiguration s.-g. stanescu, m.-d. coman, c.-a. ionescu, d.-m. coman sorina-geanina stanescu¹, mihaela-denisa coman², constantin-aurelian ionescu³, dan-marius comanº institute of multidisciplinary research for science and technology, valahia university of targoviste, romania ¹ orcid.org/ 0000-0003-1219-3420, e-mail: geaninastanescu@yahoo.com ² orcid.org/ 0000-0002-5070-5303 ³ orcid.org/ 0000-0001-6063-2921 º orcid.org/ 0000-0003-4937-6327 abstract. the market economy implies the permanent optimization of an accounting system that ensures: modern methods, policies, and strategies compatible with the requirements of the current economy oriented towards the support of long-term sustainable economic activities. the increase in business relations' complexity has determined a profound revolution in management and implicitly in accounting as the main source of information and assistance in the decision-making process. also, the awareness of the effects of economic activity on the environment leads to the reconsideration of the financial accounting system, by integrating environmental aspects, thus environmental managerial accounting contributes to providing relevant solutions and reporting adequate information. in this sense, this research presents the importance of streamlining all stages of organizing environmental management accounting to identify relevant solutions for managing adequate information and all existing resources available to economic entities. keywords: environmental accounting, management, sustainability, information. introduction nowadays, environmental issues have become a common point of global concern. in today's economic context, one of the biggest challenges is to maximize economic benefits without harming the environment. therefore, accounting must support sustainable development by providing basic information about the social and environmental impact of the entity. the development of the economy at the national and international level requires increasing efforts to find the most rational means of improving management accounting regarding environmental management in order to manage the resources necessary to reconfigure a sustainable economy (kaya & yokobori, 1997). social economy takes into account the objectives of sustainable development, in the sense of responding to current needs without affecting future generations (sneddon, howarth, & norgaard, 2006). the emergence of sustainability concept brought new terms to the theoretical plane that had to be conceptualized to become operational, such as: viability, vitality, sustainability, and sustainable development of an entity, activities, branches or even countries (rogers, jalal & boyd, 2012). in 1987, the bruntland commission, in its final report "the common future", mailto:geaninastanescu@yahoo.com sorina-geanina stanescu, mihaela-denisa coman, constantin-aurelian ionescu, dan-marius coman 109 defines sustainable development as development that meets the needs of the present without compromising the ability of future generations to meet their own needs (bruntland, 1987). sustainability or sustainable development is a holistic approach that considers ecological, social and economic aspects, considering that these aspects must be considered together to achieve a level of long-term prosperity (rogers, jalal & boyd, 2012). sustainability in the business environment is not precisely defined, but rather resides in a series of recommendations and actions that do not only pursue immediate profits and leave a legacy for future generations of a sustainable economic environment and a cleaner planet. thus, sustainable development represents that sustainable development, which focuses on the balance between social, ecological and economic elements, development that satisfies current needs, without compromising the ability of future generations to satisfy their own needs, offering us a framework of doing so to generate economic growth, achieve social justice, practice green stewardship and weigh governance with the aim of achieving sustainable long-term progress. i. the role of environmental management accounting in the sustainable development of the business environment in terms of the sustainable development of entities, the starting point is environmental accounting a current theme, as it encompasses an in-depth study of environmental issues, both locally and globally, thus helping to improve the environment through highlighting the use of natural resources. the integration of the environment into the life of the entity requires taking it into account both at the technical, legal, economic, but also accounting and financial level (morelli, 2011). bartolomeo and collaborators analyze the notion of environmental management accounting, defined as the process of generating, analyzing and using financial and nonfinancial information intended to support decisions in an entity (bartolomeo et al., 2000). bennett considered environmental management accounting as "the link between environmental management and management accounting" (bennett, bouma & wolters, 2002). environmental management accounting is a combined approach that provides financial-accounting information, represented by costs and balances of material flows, to improve the efficiency of the use of these materials, reduce risk and impact on the environment, thus contributing to the reduction of environmental protection costs (jasch, 2003). according to the united nations, environmental management accounting represents the identification and evaluation of the entire spectrum of environmental costs resulting from pollution prevention, as well as the integration of these costs and benefits in the decisionmaking process (united nations division for sustainable development, 2001). therefore, environmental managerial accounting has as its main object the production of useful information in decision-making (stanescu et al., 2021). such accounting ensures the sustainable development of the entity's activity and analyzes the costs and benefits related to the environmental impact on the activity, the contributions to the recognition of the high level of environmental taxes, capital and operating expenses generated by the use of pollution harmonization of environmental management accounting tool for managing economic reconfiguration 110 control equipment. environmental management accounting is a control tool that provides management with basic information for the decision-making system, which concerns the entity's internal management, but is of particular importance and constitutes the basis for reporting external environmental information. the environmental accounting system implemented at the level of economic entities contributes to complying with the requirements of sustainable development, through the value estimation of financial and non-financial information. environmental accounting through the specific functions (figure 1) makes it possible to manage and analyze environmental costs, as well as to transmit the information obtained both internally and externally to the entity. figure no. 1. the functions and role of environmental accounting environmental managerial accounting has a decisive role in the processing of traditional financial information, however, it will also contribute to the evaluation and compliance with the accounting procedures approved by the management of the economic entity regarding the situation of environmental protection expenses by analyzing: i) the existence of supporting documents corresponding to the registered environmental operations; ii) the veracity of the operations and the analysis of their usefulness; iii) compliance with the legal provisions and the decisions of the entity's management regarding the way to complete the documents; iv) correction of errors according to legal provisions; v) the authenticity of the documents that were the basis of the registered operations; vi) compliance with the procedure regarding the flow of documents; vii) compliance with the accounting procedures approved by the management of the economic entity. sorina-geanina stanescu, mihaela-denisa coman, constantin-aurelian ionescu, dan-marius coman 111 ii. measuring and assessing the sustainability of a business entities through decision-makers can use the information provided by environmental management accounting to make decisions that can eliminate the negative effects that influence the financial performance of the entity and the environment. the identification of environmental costs and their recognition in the accounting of the entity related to a product, work, service or economic system is necessary to make relevant and successful managerial decisions. knowing and managing current, future and possible environmental costs is a starting point for achieving the objective of minimizing environmental costs, strengthening recovery activities and streamlining environmental performance. information on environmental costs is determined throughout the managerial process to substantiate reliable decisions regarding production cost modelling. the data obtained are particularly valuable for management initiatives aimed at specific environmental objectives. environmental management accounting / environmental management accounting provides not only the cost data needed to assess the financial impact of these initiatives, but also the physical consumption data (raw material use and renewal rate) that help characterize how these initiatives will had an impact on the environment. their role is to identify and properly collect physical data that can lead to the improvement of the decision-making process within the entity. environmental data is no exception. figure no. 2. environmental accounting essential factor in assessing the progress of a sustainable economy in the long term harmonization of environmental management accounting tool for managing economic reconfiguration 112 in order to measure and evaluate the degree of sustainable development of an entity, need a series of the most relevant indicators, in accordance with the activity carried out, which reflect reality in the pursuit of predetermined objectives (ionescu et al., 2020). by their nature, indicators are used to measure a variable appropriate to the achievement of the proposed goal, the desired resources, the effects to be achieved, the quality index or conjuncture variables. the objective of non-financial indicators is to establish a performance measurement system that allows the entity to determine the defining elements that make up long-term financial performance. the interest given to these indicators stems from the awareness of the fact that the financial indicators that measure performance are by their nature: simplistic measures of results; far from being familiar and intuitive for the people who generate the operations (diaconu & albu, 2003), instead the non-financial indicators complement the financial ones, better characterizing the company's performance, because they directly touch sensitive points of the organization (robu & sandu , 2006). iii. management tools needed to reflect environmental impact in accounting traditional accounting does not correspond to the new requirements to reflect the environmental impact in accounting, thus, the adoption of new methods and instruments specific to environmental accounting is essential. integrating environmental management tools into the day-to-day management process can, theoretically, be a problem, given the fact that leaders normally use financial data to coordinate their activity. in this context, the environmental management system, standards, environmental audit play a particularly important role: they provide a framework for the creation of several technical instruments for measuring, monitoring or evaluating environmental impact. for entities, environmental accounting has the role of increasing the efficiency and effects of the environmental protection measures taken within them and to keep records of environmental expenses and income, to report and reflect them in the financial statements. table 1. classification of environmental management tools according to purpose and the data they use information used or provided piloting tools monitoring tools control tools financial environmental budgets the green dashboard evaluation of environmental accounts environmental accounts environmental indicators environmental audit physical environmental budgets the green dashboard the eco-balance environmental indicators eco balance environmental audit qualitative iso 14001 standard the emas standard environmental audit surce: bennett et al. (2002) sorina-geanina stanescu, mihaela-denisa coman, constantin-aurelian ionescu, dan-marius coman 113 text non-financial indicators are an important part of the performance of an economic entity. the success of an entity is the team within it, but it must also be supported by a human resources policy aligned with the business strategy. the connection of strategic objectives with performance, performance monitoring through indicators and their concretization represented and represent the crucial challenge of any economic entity. performance indicators help quantify the realization of a result, providing visibility into the performance of individuals, teams, departments and organizations, allowing those who have decision-making power to take action towards the achievement of the intended goal. in financial management and operational accounting, there is a close connection between the level of customer satisfaction and the future performance of economic entities. conclusions the growing pressure on economic entities both to reduce costs and to minimize the impact exerted by economic activity on the environment has contributed to their social and environmental responsibility. the consideration of environmental issues by international and national corporations, as well as by their leaders, is the result of a gradual evolution of the attitude of the entities, starting in 1970. from an attitude of ignorance and denial regarding environmental issues, today, more and more entities consider environmental performance as an important element of their business strategy. in order to ensure the success of the harmonization of environmental managerial accounting, it is necessary that the three major objectives presented previously (economic, environmental and social) be fulfilled simultaneously. harmonization is the process by which the managerial accounting of the environment needs to be put on its normal course of fulfilling its objectives and functions, thus contributing to the better management of resources, to the practice of efficient management over long periods of time. at the microeconomic level, the management accountant is the one who will have to design, implement and correctly manage all the environmental managerial accounting activity, on which the practice of high-performance management depends to a great extent. currently, the realization of an integrated system of indicators encounters many difficulties, in the sense that the impact of the approach remains limited in areas such as measuring the scope of the potential to influence and monitoring progress on the researched topic. there are uncertainties especially in the methodological aspect, such as: the object of the measurement, the method of measurement, the spatial limits and time horizons, the influence of the different measurement of the variables on the use of the indicator frameworks. references journal papers bartolomeo, m., bennett, m., bouma, j. j., heydkamp, p., james, p., & wolters, t. (2000). environmental management accounting in europe: current practice and future potential. european accounting review, 9(1), 31-52. harmonization of environmental management accounting tool for managing economic reconfiguration 114 ionescu, c. a., coman, m. d., paschia, l., gudanescu nicolau, n. l., & stanescu, s. g. (2020). sustainable economic intelligence: a new dimension of information provided by non-financial indicators. improving business performance through innovation in the digital economy, 117-143. jasch, c. (2003). the use of environmental management accounting (ema) for identifying environmental costs. journal of cleaner production, 11(6), 667-676. morelli, j. (2011). environmental sustainability: a definition for environmental professionals. journal of environmental sustainability, 1(1), 2. robu, v., & sandu, r. 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(2012). an introduction to sustainable development. earthscan. edited books bennett, m. d., bouma, j. j., & wolters, t. j. (eds.). (2002). environmental management accounting: informational and institutional developments (vol. 9). springer science & business media. documents from conferences bruntland, g. h. (1987). our common future. the world commission on environment 1 and development, 45-65. united nations division for sustainable development (2001), environmental management accounting, procedures and principles. new york and geneva: united nations publications. agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 48-55 48 strategy of sales and communication of hotel services during the war m. kulyk, m. boiko, m. bosovska, a. okhrimenko mariia kulyk¹, margaryta boiko², myroslava bosovska³, alla okhrimenkoº dept. of hotel and restaurant business of state university of trade and economics, ukraine ¹ orcid.org/0000-0001-8732-7441, e-mail: m.kulyk@knute.edu.ua ² orcid.org/0000-0003-0249-1432 ³ orcid.org/0000-0002-6021-5228 º orcid.org/0000-0003-0405-3081 abstract. in the conditions that have developed in the economy of ukraine, the organization of processes in the hotel business and the formation of sales and communication strategies have undergone changes, as well as the tourism sector as a whole. each hotel enterprise needs to clearly understand the plan of actions and decisions to ensure the correct operation of the enterprise, adapted to external changes. the purpose of the article is to study the essence and tasks of forming a strategy of sales and communication of hotel services during the war, studying the main aspects. after february 24, 2022, most ukrainian businesses and enterprises, in particular hotels and restaurants, faced uncertainty and confusion about what to do next. the tourist flow came to a sudden halt along with air and rail connections. a significant number of workers lost the opportunity to be present at workplaces or went abroad. due to the hostilities, the offer on the hotel market of ukraine has decreased. the objective of survey providing in the study is the determination of regional trends in the development of the hotel market of ukraine during the war and understanding the peculiarities of marketing strategies that affect the involvement of new hotel product consumers’ segments through the booking channels and the formation of a positive image of hotels. methods of generalization, analysis and synthesis, comparison, scientific abstraction and systematization were used to fulfil the set tasks and achieve the main goal of the research of strategy of sales and communication of hotel services during the war. keywords: sales, distribution, communication strategy, hotel services during the war introduction since 24 february 2022, most ukrainian businesses and enterprises, including hospitality and restaurant companies, have faced uncertainty and confusion about what to do next. tourist arrivals came to an abrupt halt, along with air and rail services. a significant number of employees lost the ability to be present at their workplaces or went abroad. in 2022 during the war, it was confirmed the association between job insecurity and job stress, and the relationship between job insecurity and turnover (ergun et al.,2023). as a result, the low pay level in the hotel and restaurant business influenced on decreasing of employment and migration of staff (levytska et al., 2023). the hostilities, supply in the ukrainian hotel market has decreased, with many properties not operating for security reasons, lack of demand, technical reasons or damage from shelling. for an effective recovery of hospitality mailto:m.kulyk@knute.edu.ua mariia kulyk, margaryta boiko, myroslava bosovska, alla okhrimenko 49 and tourism, ukraine may take the experience of other countries. the war in croatia destroyed a lot of infrastructure, cultural heritage and reputation of a safe destination. it took a couple of years to regain all of that to the starting position and then acquire the development of the same (belin, 2021). japan has experienced many crises caused by viruses, epidemics, natural disasters such as typhoons, earthquakes, tsunamis, and the ravages of war, which led to the economic stagnation (hara et al., 2022).the problem with migration can be solved as in sweden, where the refugees being there temporarily—as soon as the war ended, they were expected to return home (nauman, 2022). currently, the state of the hotel market in ukraine varies from region to region: how such facilities operate and whether they are open at all depends on the region in which they are located and how far they are from the war zone. hospitality during the refugee crisis, apart from a cultural value and societal response to the protracted refugee influx,) is a discursive strategy of socio-spatial control used by humanitarian agencies, local and national authorities (carpi & pınar şenoğuz, 2018). the hotel's orientation towards the reaction on the contemporary situation is closely related to the rebuilding its work in order to be useful and help those who left their homes because of the war (petráková et al., 2022). the demand for hotels in western regions of ukraine: ivano-frankivsk, lviv, ternopil and zakarpattia was formed by international companies and diplomatic missions that relocated to safer regions. more than one thousand enterprises have been transported from the eastern and central part of ukraine (zhuravka et al., 2023). hotels there are fully operational and there are no prerequisites for closing or suspending their operations. in kharkiv, sumy and mykolaiv, the main goal is to preserve the facilities. the hotels have been suspended as accommodation facilities. the teams are focusing their efforts on volunteer support in the war against the russian aggressor. according to (korneyev et al., 2022), the ukrainian business is gradually returning to life. hundreds of enterprises are resuming work, and the state is contributing to this. we should also pay special attention to the operation of international branded hotels: such accommodation facilities located in large cities have mostly suspended operations. this is due to security policies and foreign management. in addition, their audience is foreign tourists, who are not coming to ukraine at the moment. today, international hotels such as hilton kyiv, intercontinental kyiv, both radisson blu hotel properties, as well as fairmont grand hotel kyiv, mercure kyiv congress, holiday inn kyiv and others have resumed operations in the capital. analysis of research and problem statement actuality of the research: hotels that did not stop operating had to transfer all business processes to an unprecedented new format. at the same time, they had to provide guests with the usual level of service and safety, help employees and their families, and engage in volunteering: providing shelters, hosting idps, providing humanitarian aid, etc. often, this had to be done with a smaller team, as hotel staff also tried to move to safer places or emigrate abroad, or employees joined the ranks of the armed forces or the defense organization. however, if the main issue at first was how to assemble and retain a team, now it is how to load it in the face of low demand and a small number of guests. another challenge for hotels was the disruption of supply chains. due to the lack of fuel strategy of sales and communication of hotel services during the war 50 and other reasons, some logistics processes were disrupted, which affected the provision of facilities with the necessary supplies for operation or launch. for example, at ribas hotels group, logistics disruptions affected hotels under construction. and hotels experienced interruptions in the supply of products in the first weeks of the invasion. the curfew also changed the operation of accommodation facilities. due to time constraints, the process of check-ins and check-outs is somewhat complicated, with the main workload falling on the day shift. in addition, due to the curfew, employees sometimes live on the premises of hotels. restaurants and bars and other services, such as beauty salons, spa areas, etc., are also limited. some hotel services are not available during air raids. this is a separate point in the operation of facilities that have implemented enhanced security standards. they include notifying guests about air raids and their termination, arranging safe places/shelters where people can wait out the danger, etc. method data were collected from april 2022 to december 2022. the study adopted mixed research methods because it allows for the collection of both structured quantitative data through a survey and qualitative data through interviews with the hotel managers. the survey consists of 10 questions with the answers stated in different forms such as “yes or no”, multiple choice, open questions. the questions were based on exploring current situation focusing on peculiarities in hospitality sales during the war. 134 hotel managers from different regions of ukraine completed the survey or were interviewed. ms excel statistical tools were used to analyse the quantitative data gathered from survey, interviews to present the trends and market situation in hospitality in ukraine. results the current situation of the ukrainian hotel industry can be described as a lack of a market. except for some regions in the west of the country, where the situation is better. such segments of guests as leisure and corporate are completely absent. since the beginning of the full-scale war, two categories of guests have dominated the structure of ukrainian hotels. first and foremost, it was individual guests who either temporarily stayed in accommodation facilities and then returned home or found permanent accommodation in a new city, or travelled further afield. there was also demand from companies and diplomatic missions that relocated their teams to safer areas. for example, in the city hotels of ribas hotels group in odesa, internally displaced people accounted for about 70% of guests in the first months of the war, but now they are relatively few 10%. these are mainly people from kherson and mykolaiv. in march, poltava's premier hotel palazzo was almost 70% occupied by refugees from kharkiv. the hotel hosted and fed people for free. in march and april, premier hotel dnister in lviv allocated a significant number of rooms for free accommodation for refugees and also converted one of its conference rooms into a free hostel. the second category of guests includes media representatives, diplomatic delegations, international volunteer organisations, etc. the operators especially note media representatives: at the beginning of the hostilities, some properties, such as the bristol in odesa and the premier palace hotel in kyiv, had so many mariia kulyk, margaryta boiko, myroslava bosovska, alla okhrimenko 51 such guests that the hotels became a kind of hub for international journalists. according to the results of the analysis of the market of hotel services it is established that in the structure of hotels of ukraine 42% are hotels in big cities, their number by regions is 5253 objects (figure 1). figure 1. number of hotels in ukraine 2016 2021 source: own development by authors the number of hotels according to official statistics in 2022 were decreased compared to 2021. this is caused by occupation of part of ukraine and because the number of certain facilities were destroyed (figure 2). figure 2. dynamics of the occupancy in ukrainian hotels in 2021-2022 source: own development by authors strategy of sales and communication of hotel services during the war 52 during the period of research, we observe that in 2021 2022 the occupancy decreased in kyiv, odessa during the war, and the same time we observe an increase in the hotel occupancy in lviv. at the same time, during 2022, the room occupancy rate ranged from 22 to 58%, which indicates a low level of attractiveness of hotels in central and south ukraine, which indicates an insufficient response of new communication strategy. how has the war affected the network and guests? negative impact: lack of physical security due to the hostilities on the territory of ukraine, which is on the list of countries not recommended for citizens of most countries. lack of air travel, the departure of solvent ukrainians from the country, unsafe location of hotels near government buildings become the logistical problems to ensure full operation. positive effects: reduced competition the list of competitors has been partially reduced due to the closure of hotels in kyiv. retention of staff, ukraine is in the spotlight of the world community. ukraine is a brand and visits from the press, international organizations and companies that were not present before. having basements has become an advantage, as they serve as storage for guests, and proximity to the metro. what are the historical booking channels and customer segments? more than 65% are individual guests who book their accommodation directly at the reception, on the website or online resources. about 25% are representatives of embassies, government agencies and corporate companies, who mostly stay long-term and in large groups. the remaining 10% are loyal guests who stay regularly. guests who have been staying since the beginning of the war: foreign journalists, whose number has increased significantly, international organizations, ukrainians as individuals travelling through ukraine and guests whose stays are funded by ukrainian charities to support those affected by the war. main sales channels: hotel website, hotel email, online booking channels, social media. most online booking channels support ukrainian businesses, so airbnb had the opportunity to create a donate rate that anyone could use by making a charity booking to support the hotel industry. another booking service, booking.com, cancelled the mandatory booking commission for ukrainian hotels by the end of the year. as for the communication strategy of hotel services, absolutely no one has a magic methodology for communicating during such a period, but you definitely don't need to drop out of the information space. the concept of "communication" comes from the latin word communication as a derivative of communicate to make common, to connect, a way of communication, a form of communication. therefore, communications are understood as the process of exchanging information between people using various signs, symbols, and communication methods. communications are the subject of study in various sciences, including philosophy, sociology, psychology, political science, cultural studies, linguistics, economics, marketing, and others. therefore, communication theory is a complex science that integrates knowledge about communication processes in various fields. marketing communications is one of the components of the 4ps, which is an important tool for promoting goods and services. marketing communications are of particular importance in the digital society, which is characterized by significant changes in almost all areas of human activity due to new opportunities provided by digital technologies, digital infrastructure, mobile and cloud technologies, big data, digital codification of information, significant growth in computing power, integration of information technologies with mariia kulyk, margaryta boiko, myroslava bosovska, alla okhrimenko 53 communication systems, digital automation and robotics. all this makes information accessible to consumers, changes their behavior, accelerates the development of society, stimulates economic growth, improves public administration and business management in all areas of economic activity, and improves human life. external communications take place between an organization and the target audiences with which it has to deal. target audiences include shareholders, trade unions, consumers, financial and credit institutions (banks, stock exchanges), suppliers, competitors, the media, ngos, regional (municipal) authorities, government agencies and other governmental structures. internal communications are communications that take place within an organization between individual employees or departments of the organization. communication in social media, on the hotel website and in the media is important from the first days of the war and should be a mandatory, continuous process. hotels need to broadcast their social, political and volunteer position. make open reports on volunteer activities, broadcast that the hotel business is working. wartime marketing and communications have their own peculiarities. you cannot pretend that nothing is happening and that there is no war. it used to be that some people could afford to say "we are out of politics", but now everything that happens in the country is politics. war is politics. in addition to the usual content, patriotic publications should be added, and such content can be segmented as follows: military and social; national brand positioning; information about volunteering; transferring funds for the armed forces; discounts for ukrainians, etc. communication strategy in hospitality is a process aimed at: supportive-victorious inspirational content about victory, affirmations, quotes, memes on military topics. adapt them to your niche, so you will be on the same page with your audience. relevant and useful post a message about your company's work or suspension of work, publish a list of active sales offices, their schedule, and current contacts. hotel can also add a list of bomb shelters near the establishment. it is especially important to show that there are ordinary people behind every business, add staff photos, live stories and broadcasts to your profile. if possible, actively cooperate with international media and give interviews. this way, you increase the level of trust in the brand. in order not to lose the loyalty of your audience, you should work on any feedback or comment, even if it is unpleasant. work with free channels. whenever possible, hotel managers have to actively cooperate with international media and give interviews. this is how to increase the level of trust in the brand. in order not to lose the loyalty of the guests, hotel should work on any feedback or comment, even if it is unpleasant. hotel need to work with free channels. the immediate target of such savings is communication channels. hotel should focus on the free channels that will have developed in the previous work (social media, newsletters, website) and analyses whether hotel really need the paid channels that worked before the war (targeted, contextual, display advertising). promotion of hotel services, in particular the cost of advertising impressions and ads, has fallen in price amid a decrease in supply on the market, so it is worth seizing the moment and allocating a budget for promotion. the main marketing messages have also changed somewhat, and now the strategy of sales and communication of hotel services during the war 54 main emphasis is on safe storage, round-the-clock security, room alarm systems, long-term accommodation at a reduced price, etc. before posting anything, hotel manager needs to read the news. before hotel manager clicks publish on a new post, he needs to check what's happening in ukraine and around the world. it is clear why he should not post about entertainment if there was an explosion in a shopping centre half an hour ago. delete what turned out to be inappropriate. something happens all the time, unpredictably. if a tragedy occurs half an hour after the post, don't be afraid to delete, move, or apologize. do not speculate on values. do not use the names "bayraktar" or "peremoha" do not parasitize on things that inspire ukrainians. but at the same time, keep track of social demands: you need to understand what people want and give it to them. conclusions it should be noted that the sales and communication strategy in today's realities must be quickly adaptable and adjust to changes and current market offers. now is a great time to try and test new hypotheses of promotion, implement new approaches to doing business, and find other ways to increase revenue. free tools are especially worth noting. hotel managers have to monitor the situation in the country and the world to be as relevant as possible in communication strategy. the unpredictability and dynamics of demand in the situation of war in ukraine prompts hotels to the need to comprehensively and systematically form a policy of sales and communication with guests in conditions of increased risk. therefore, accordingly, there is a need to implement new strategies, since closed borders, lack of electricity supply and the danger of missile strikes lead to the need to change the paradigm of providing hotel services. therefore, an important approach is formulating a strategy of reorientation to new target segments, forming a brand and identifying the hotel as a safe place for the guest. in the conditions of war, the introduction of new strategies for the distribution of hotel services is a dynamic and prevailing trend, which is manifested in the use of transformed sales channels, communication with stakeholders. therefore, the means of improving the effectiveness of sales and communications in conditions of war are the creation of a positive image, including through volunteer activities and cooperation with charitable organizations. for the effective implementation of such strategies, there is a need for optimal balancing of economic interests and the social component. therefore, it is possible to identify certain possible outcomes of sales and communications strategies in the context of war. references 1. belin, t. (2021). evolution and development of tourism and hospitality on the island of mljet (doctoral dissertation, rit croatia). 2. carpi, e., & pınar şenoğuz, h. (2018, june 6). refugee hospitality in lebanon and turkey. on making ‘the other.’ international migration, 57(2), 126–142. https://doi.org/10.1111/imig.12471 3. ergun, g. s., bozkurt, h. o., arslan, e., kendir, h., & yayla, o. (2023). psychological capital as a moderator in the relationship between job insecurity, job stress, and hotel employees' turnover intention during the russia-ukraine war. international journal of hospitality management, 111, 103475. mariia kulyk, margaryta boiko, myroslava bosovska, alla okhrimenko 55 4. petráková, a., veselá, n., ponomarenko, m., hrdličková, s., barták, m., & dlouhý, m. (2022, october 1). response to the ukrainian war: support to the ukrainian health professionals – war refugees. european journal of public health, 32(supplement_3). https://doi.org/10.1093/eurpub/ckac131.553 5. hara, y., ikenobo, s., & han, s. h. (2022). understanding the philosophy of japanese hospitality. in a new approach to resilient hospitality management: lessons and insights from kyoto, japan (pp. 1-38). singapore: springer nature singapore. 6. zhuravka, f., nebaba, n., yudina, o., haponenko, s., & filatova, h. (2023, march 3). the hospitality market in ukraine: war challenges and restoration possibilities. innovative marketing, 19(1), 140–150. https://doi.org/10.21511/im.19(1).2023.12 7. korneyev, m., berezhniuk, i., dzhyndzhoian, v., kubakh, t., & horb, k. (2022, august 1). business marketing activities in ukraine during wartime. innovative marketing, 18(3), 48–58. https://doi.org/10.21511/im.18(3).2022.05 8. levytska, i. v., klymchuk, a. o., & kozhushko, s. p. (2023, february 15). the problems with the pay level as a factor of staff motivation in the hospitality industry of ukraine. academic review, 1(58), 148–159. https://doi.org/10.32342/2074-5354-2023-158-11 9. nauman, s. (2022). conditional hospitality toward internal refugees: sweden during the great northern war, 1700–1721. in baltic hospitality from the middle ages to the twentieth century: receiving strangers in northeastern europe (pp. 221-245). cham: springer international publishing. https://doi.org/10.21511/im.18(3).2022.05 agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 31-38 31 the influence of digital and social media marketing on consumer behaviour k. kaur komalpreet kaur faculty of economic sciences, university of “aurel vlaicu” arad, romania orcid.org/0000-0003-4814-2561, e-mail: komal.preet.kaur00009@gmail.com abstract. in today’s digitalized world, where internet and social media undoubtedly have a massive impact on our daily lives (including our buying decisions), it becomes indispensable for any manager or entrepreneur to be well aware about the influence of online marketing (also known as digital marketing) on consumer behaviour, so as to make the most profitable business decisions that are in their best interests. this study is an evaluation of some recently published articles and reports that tell about consumers in digital and social media settings. to write this article, a literature review is conducted and an attempt is made to highlight all the noteworthy ideas. in the end, the paper concludes traditional marketing is at the verge of disappearing as the marketers have found a better and more efficient way to reach the target audience. keywords: digital marketing, social media marketing, social media influencers introduction with a growing number of internet users on a global scale, the average time spent on the internet is also increasing. as a result, people are getting more accustomed with the technology and exposing themselves more to the digital world. this trend is nothing less than an opportunity for companies and businesses who desire to attract the public's attention and be more visible. firstly, traditional ways of promoting products and services (such as print marketing) are slowly disappearing. hence, if a company wants to remain relevant in the marketplace in the long-run, it has to adapt according to the external environment. secondly, the emergence of the internet has transformed many industries and the way businesses operate, including the way they promote their products or services. statistically, the traditional advertising techniques and medium are losing their significance over time. therefore, business owners are moving away from medium such as newspapers, radio and television. (navarro, 2022) lastly, the arrival of social media platforms like facebook, instagram, twitter and linkedin has brought major transformation in people’s lifestyles and the way people interact with each other. people, especially the ones from younger generations spend much more time online for different purposes. although, initially social media appeared with the purpose to build connectivity among people, slowly it has started to be used for completely different purposes. online or digital marketing as well as social media marketing are the classic examples of modern marketing strategies that are actively used by the companies to create brand awareness. https://orcid.org/0000-0003-4814-2561 mailto:komal.preet.kaur00009@gmail.com the influence of digital and social media marketing on consumer behaviour 32 the main purpose of this paper is to analyse the current status of online and digital marketing. since companies are heavily relying on these practices to sustain in the competitive business environment, it is extremely crucial to understand the marketplace and study the existing literature to gain insights. for this purpose, recent studies, reports and research on online marketing (also commonly known as digital marketing) as well as social media marketing are reviewed. this literature review, apart from providing interesting insights, also serves the purpose of highlighting new emerging concepts such as social media influencing and its impact on younger generations. i. methodology the present study is a result of a thorough analysis of the existing literature. therefore, the methodology used is literature review. it is a type of academic writing, which helps in understanding a subject in detail. in this article, the sources of information were collected through a search engine named google scholar by searching the following keywords: digital marketing, social media marketing, digital marketing statistics and social media marketing statistics. the primary sources used for literature include articles published in journals between years 2016-2022 while statista is used for citing statistical data about recent marketing trends. statista is an online platform which provides insights and findings of global and local surveys. after the selection process, a total of thirteen sources are cited in this paper. out of these thirteen sources, there are two statistical reports/surveys and an article by a company that provides marketing services. in order to maintain credibility, only trustworthy sources are utilized. all of these sources are mentioned in references. ii. discussion and results ii.1. digital marketing statistics confirm that internet users, around the world, are escalating at an unimaginable speed. on top of that, as per the estimations made by scholars, the fourth industrial revolution has emerged with the arrival of recent advancements in technologies. as a result of these sudden changes, the lifestyles of people have transformed, including the way in which consumers perceive the outer world, communicate, engage, interact and make buying decisions (faruk et al., 2021). besides, social networking platforms like facebook have further contributed in affecting the way people interact with one another. consequently, the buying behaviour of the current consumers have also been impacted as they are spending much more time on social media platforms for different purposes such as looking for information and purchasing products online at a few clicks. according to faruk et al. (2021) all these aspects have led the marketers to rethink their traditional approaches of promoting products and shift to other forms of media for advertising. advertising may utilize any type of media in order to achieve its final objectives. some common examples of media include radio, tv, print, internet. the global advertising expenditure has been increasing every year and with the growing number of internet users, advertising expenditure through online media is surging because marketers are noticing more potential in online marketing than in traditional marketing. ibecause of this reason, the internet komalpreet kaur 33 is believed to be the most significant medium for promoting goods or services. to further support this statement, estimates clearly show that in the year 2022, out of the total amount that was spent in advertising, 62% of it was utilized in online advertising. this simply suggests that traditional forms of marketing such as print marketing and promotion through medium other than the internet, that is, radio, television and newspaper are struggling to maintain their relevance (navarro, 2022). all these aspects have contributed in shifting to digital marketing. this has not only enabled the marketers to reach the target audience in a more effective way, but has also allowed them to study the behaviour of potential buyers more efficiently (faruk et al., 2021). according to lamichhane (2022), digital marketing represents reaching out to potential buyers with the help of the internet by using numerous digital channels or tools like email and social media. hence, it has an immense impact on people’s life, habits and their buying behaviour. as a matter of fact, every coin has two sides. on the one hand, faruk et al. (2021) claim that digital marketing allows businesses to have benefits such as increased revenues, more customer engagement, higher customer satisfaction and customer loyalty as well as lower additional costs like service and customer acquisition costs. on the other hand, it also represents a challenge for the businesses as it can also be used by unskilled people. as per di domenico et al. (2021), such people may also act as a threat to companies if they intend to use it inappropriately or unethically with the purpose of harming a company’s reputation. there is known to be an increasing concern regarding the issue of “fake news” among the authorities, business owners as well as scholars. while many researchers have mainly paid attention in the past to the problem of fake news in the political context, the subject of the effects of disinformation on social media on marketing and consumers remains unfocused (di domenico et al., 2021). because of the increasing technological advancements, coupled with the emergence of concepts like going green, traditional marketing or paper marketing is at the verge of disappearing. taking into consideration the growing internet users, digital marketing has an immense potential. the developing nations have already started to embrace it. moreover, largescale companies have already adapted themselves for this change whereas small-sized enterprises are slowly transforming and using digital marketing techniques and tools are becoming a part of their marketing strategy (lamichhane, 2022). ii.2. social media marketing initially, the purpose of social media was to allow people to connect with their friends, family, relatives, colleagues and acquaintances. this helped them in exchanging their views, thoughts and opinions and even exchange content like pictures, videos and documents. however, madhura and panakaje (2022) state the organizations were quick to adopt them as a new communication tool to reach customers easily. since the consumers are spending more time on social media platforms, faruk et al. (2021) believe that marketers have also started to apply their strategies in these media channels so as to make the most of this opportunity. in fact, according to the literature, it is considered that the digital world opens new doors for the marketers and salespeople who seek more engagement from their target audience to sell them suitable goods and services. therefore, one may conclude that digital media platforms allow businesses the opportunity to form relationships with the targeted segment of customers. the influence of digital and social media marketing on consumer behaviour 34 previous literature (madhura & panakaje, 2022) indicates that social media serves various benefits such as acting as a tool that helps people to interact with one another. there are many reasons why it has been so successful in attracting masses that spend a lot of time online (mason et al., 2021). firstly, people are able to easily derive gratification by sharing information/photos. in fact, the uses and gratification theory further supports this statement (malik et al., 2016). secondly, mason et al. (2021) mentions that due to a phenomenon named as cognitive absorption, social media users lose the ability to remain conscious of their physical surroundings and time. this also somehow enables them to temporarily escape the unwanted situations or circumstances of the present. thirdly, it offers the users a sense of high level of joy that they don’t usually experience in real life in a few clicks. this comes along with a sense of control that further makes the users more than satisfied (mason et al., 2021). companies are increasingly creating an online presence on different platforms such as facebook, instagram and youtube. some social networking channels are preferred over others because they are able to attract people, collect their users’ data, thereby helping the companies in reaching the right kind of audience, which is suitable for their products and services. in order to gather information, companies must practice effective communication, which ultimately allows them to better understand their target audience and offer them what they are searching for, ultimately providing them with a better customer experience and higher satisfaction. the information gathered about the users is also helpful in increasing customer engagement (madhura & panakaje, 2022). many aspects of human life have changed since the arrival of the internet including the way customers interact. for instance, jamil et al. (2022) explains that creation of modern communication channels has allowed the clients to enhance their overall experience as a customer. in the present-day context, firms are sharing brand information, which reaches millions of people online. this helps companies in building and sustaining online communities in a much more efficient way. social media platforms such as facebook and instagram contribute in creating a sense of belongingness and community for their users without actually having any physical contact. a virtual brand community is a group of people who buy things from a specific brand. clients are interested in more than simply purchasing products and services; they want to have meaningful experiences and build long-lasting connections with other clients that share their common interest (jamil et al., 2022). previous studies (mason et al., 2021) demonstrate that customer’s social media marketing behavior has also undergone a change due to covid-19 pandemic. since the beginning of the pandemic, changes in consumer’s decision-making behaviors were identified. during the lockdown periods, when social distancing was a necessity, social media offered consumers the opportunity to interact without any restrictions online. in such times, social media marketing strategies were seen as a competitive advantage for companies. to conclude, the usage of social media was further accelerated by the covid-19 pandemic. when it comes to brand promotion on social media handles, another new scheme that brands have started to adopt is social media influencing (de castro et al., 2021). social media influencing is a marketing strategy in which a person is in the position to “influence” or “change” the mindset of fellow members within the social media community. the greater komalpreet kaur 35 influence a person has over the online community, the more valuable it will be for brands who wish to promote their products or services. therefore, it is a mechanism that can be utilized by organizations for the purpose of brand awareness. smm (social media marketing) is known to have several benefits as a modern marketing strategy. besides creating and improving brand awareness, smm makes the communication link between companies and potential clients smoother. due to this motive, it is considered as a new marketing strategy but there is very limited research on its relationship with customer intention and retention (de castro et al., 2021). figure no. 1 u.s. consumers influenced by social media ads to purchase products in 2017, by age source: dencheva, v., 2017 (statista) according to the findings of an online survey conducted in 2017 among us consumers aged 18 and above, 49% of the respondents of the age between 19 and 29 years confirmed to have bought products shortly after seeing an advertisement on social media (dencheva, 2017). the figure no. 1 clearly demonstrates that the percentage of people buying products after viewing an ad on social media has a strong association with the age that they belong to. observing this graph, one may draw this conclusion: the older you are, the less influence social media has on your buying behavior. usually, the most basic way to judge an individual’s influence is by looking at the number of followers that the person has on different social media platforms twitter, linkedin, facebook and instagram. however, it is also important for the businesses to take into consideration the age groups and the purpose for which the platform is used. for instance, instagram is a platform which is dominated by younger generations while the facebook community includes all age groups. the figure below shows the most popular social media sites, the purpose of their usage, the number of active users as well as the age group to which they belong. the influence of digital and social media marketing on consumer behaviour 36 figure no. 2 popular social media platforms source: techtarget, 2019 once analyzing the particular target audience for their products and services, businesses can select which social media site is suitable for promotion. furthermore, de castro et al. (2021) explain that based on their preference, they can choose social media influencers (smi) to create brand awareness among the specific age group identified and selected as a target audience. it is interesting to note that smi is more common among adolescents because younger generations spend relatively more time online in comparison to the older ones. hence, due to greater exposure, young people are more prone to get influenced by the content posted by influencers. therefore, one may conclude that young people such as teenagers and adolescents are more likely to get influenced by smis. however, it is equally significant to mention the fact that influencers have the ability to influence a person's behavior or attitude in both positive and negative manner (de castro et al., 2021). social media is a powerful tool to attract people, especially the ones belonging from new generations and there are different mechanisms that can be used to attract these potential buyers. several studies (de castro et al., 2021) confirm that generation z is the most active age group when it comes to spending time on social media. in a survey, members of generation y and z based in the us were asked about the category of products they were tempted to buy due to some brands’ posts on social media. figure no. 3 is a graphical representation of the categories of products answered by the respondents that participated in this survey. as shown in the figure below, the majority of the respondents claimed to buy apparels due to online influential content. these are followed by beauty and make-up products (22.92%). 15.10% of respondents confirmed buying tech products as a result of social media influence, which was followed by home products (11.46%) and food and beverages (8.85%). therefore, chevalier (2021) concludes that more than half of the participants agreed to buy clothing and beauty/make-up products because of social media content. komalpreet kaur 37 figure no. 3 product categories that generation z and millennials purchased more as a result of social media brands' posts and/or influencers' content in the us as of march 2021 source: chevalier, s., 2022 (statista) such studies show that social media can be used as a tool to attract potential consumers and increase content engagement and sales. according to de castro et al. (2021), this technique or method of using social media by the companies, as an instrument to commercially promote or advertise different products and/or services is known as social media marketing (smm). conclusions with the rise in the number of internet users and average time spent online, businesses are also shifting online and adapting online advertising. having lost its relevance in the marketplace, traditional marketing is at the verge of disappearing. in the present-day context, social media is a powerful tool that assists companies in achieving their goals in a more efficient way. by using social media marketing as a means of advertising, organizations are creating brand awareness among the target audience. with the emergence of social media influence, businesses have discovered a new strategy to attract people from younger generations. several studies have indicated that marketers are using social media marketing as a tool to attract target audience. techniques such as social media influencing are transforming the marketing industry and thus, the business owners will have to adapt according to the recent shifts. references 1. chevalier, s. (2022). product categories that generation z and millennials purchased more as a result of social media brands' posts and/or influencers' content in the united states as of march 2021. https://www.statista.com/statistics/1255308/products-purchased-social-mediainfluence-united-states/ 2. de castro, c. a., o’reilly, i., & carthy, a. (2021). social media influencers (smis) in context: a literature review. journal of marketing management, 9(2), 5971. 3. di domenico, g., sit, j., ishizaka, a., & nunan, d. (2021). fake news, social media and marketing: a systematic review. journal of business research, 124, 329-341. https://doi.org/10.1016/j.jbusres.2020.11.037 https://www.statista.com/statistics/1255308/products-purchased-social-media-influence-united-states/ https://www.statista.com/statistics/1255308/products-purchased-social-media-influence-united-states/ https://doi.org/10.1016/j.jbusres.2020.11.037 the influence of digital and social media marketing on consumer behaviour 38 4. dencheva, v. 2017. share of consumers who have purchased products after seeing an ad on social media in the united states as of september 2017, by age group. https://www.statista.com/statistics/760195/us-consumer-age-social-media-adsinfluence-product-purchasing/ 5. faruk, m., rahman, m., & hasan, s. (2021). how digital marketing evolved over time: a bibliometric analysis on scopus database. heliyon, 7(12), article e08603. https://doi.org/10.1016/j.heliyon.2021.e08603 6. jamil, k., dunnan, l., gul, r. f., shehzad, m. u., gillani, s. h. m., & awan, f. h. (2022). role of social media marketing activities in influencing customer intentions: a perspective of a new emerging era. frontiers in psychology, 12, article 6464. 7. lamichhane, b. (2022). impact of digital marketing on consumer behavior in pokhara. kic international journal of social science and management, 1(1), 13– 23. https://doi.org/10.3126/kicijssm.v1i1.50660 8. madhura, k., & niyaz panakaje, d. (2022). customer perception in relationship between social-media and purchasing behavior of fashion products. available at ssrn 4187212. https://dx.doi.org/10.2139/ssrn.4187212 9. malik, a., dhir, a., & nieminen, m. (2016). uses and gratifications of digital photo sharing on facebook. telematics and informatics, 33(1), 129-138. https://doi.org/10.1016/j.tele.2015.06.009 10. mason, a. n., narcum, j., & mason, k. (2021). social media marketing gains importance after covid-19. cogent business & management, 8(1), article 1870797. https://doi.org/10.1080/23311975.2020.1870797 11. navarro, j.g. (2022). distribution of advertising spending worldwide in 2022, by medium. https://www.statista.com/statistics/376260/global-ad-spend-distributionby-medium/ 12. statista research department. (2023). digital advertising spending worldwide from 2021 to 2026 (in billion u.s. dollars). https://www.statista.com/statistics/237974/online-advertising-spendingworldwide/ 13. techtarget. 2019. social media influence. https://www.techtarget.com/searchcustomerexperience/definition/social-mediainfluence#:~:text=social%20media%20influence%20is%20a,idea%20or%20sell %20a%20product https://www.statista.com/statistics/760195/us-consumer-age-social-media-ads-influence-product-purchasing/ https://www.statista.com/statistics/760195/us-consumer-age-social-media-ads-influence-product-purchasing/ https://doi.org/10.1016/j.heliyon.2021.e08603 https://doi.org/10.3126/kicijssm.v1i1.50660 https://dx.doi.org/10.2139/ssrn.4187212 https://doi.org/10.1016/j.tele.2015.06.009 https://doi.org/10.1080/23311975.2020.1870797 https://www.statista.com/statistics/376260/global-ad-spend-distribution-by-medium/ https://www.statista.com/statistics/376260/global-ad-spend-distribution-by-medium/ https://www.statista.com/statistics/237974/online-advertising-spending-worldwide/ https://www.statista.com/statistics/237974/online-advertising-spending-worldwide/ https://www.techtarget.com/searchcustomerexperience/definition/social-media-influence#:~:text=social%20media%20influence%20is%20a,idea%20or%20sell%20a%20product https://www.techtarget.com/searchcustomerexperience/definition/social-media-influence#:~:text=social%20media%20influence%20is%20a,idea%20or%20sell%20a%20product https://www.techtarget.com/searchcustomerexperience/definition/social-media-influence#:~:text=social%20media%20influence%20is%20a,idea%20or%20sell%20a%20product agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol 10 (2016) 30 millennials and corporate culture in multinational companies judeu viorina maria 1 abstract globalization is not what it was a decade ago. what links the world together has changed fundamentally. for many companies, succeeding in this new operating environment will require rethinking many past decisions and assumptions.multinational companies hire millennials because they appreciate their energy and initiative. on the other hand, millennials greatly values the personal time and are not willing to provide the tray dedication and energy. when organizational structures expect these things to come by itself, may be disappointed. millennials are carefully selected and their involvement. millennials have to be earned, not to be taken for granted. keywords globalization, millennials, multinational companies, corporate culture millennials generation and their benefit from the economic recovery strauss & howe's book titled millennials rising: the next great generation describes the millennial generation as "civic-minded", rejecting the attitudes of the baby boomers and generation x. 2 generally speaking, millennials are the children of baby boomers or generation xers, while some older members may have parents from the silent generation. a 2013 poll in the united kingdom found that generation y was more "open-minded than their parents on controversial topics". 3 in 2015, the pew research center also conducted research regarding generational identity. 4 it was discovered that millennials, or members of generation y, are less likely to strongly identify with the generational term when compared to generation x or to the baby boomers, with only 40% of those born between 1981-1997 identifying as part of the millennial generation. among older millennials, those born 1981-1988, pew research found 43% personally identified as members of the older demographic cohort, generation x, while only 35% identified as millennials. among younger millennials (born 1989-1997), generational identity was not much stronger, with only 45% personally identifying as millennials. it was also found that millennials chose most often to define itself with more negative terms such as self-absorbed, wasteful or greedy. in this 2015 report, pew defined millennials with birth years ranging from 1981 onwards. 5 economic prospects for some millennials have declined largely due to the great recession in the late 2000s. 6 several governments have instituted major youth employment schemes out of fear of social unrest due to the dramatically increased rates of youth unemployment. in europe, youth unemployment levels were very high (56% in spain, 44% in italy, 35% in the baltic states, 19.1% in britain and more than 20% in many more 1 agora university of oradea, tineretului square nr.8, 410526, oradea, romania, viorina@univagora.ro 2 howe, neil, strauss, william millennials rising: the next great generation, a vintage original, 2000, p. 352 3 phillips, martin. future's bright: young brits upbeat over working lives. the sun. london. retrieved 26 july 2013 4 most millennials resist the millennial label. pew research center for the people and the press. retrieved 13 october 2015. 5 anderson, kurt, pop culture in the age of obama. new york times. (5 august 2009). retrieved 29 november 2012 6 yen, hope, census: recession turning young adults into lost generation, (22 september 2011), huffington post. retrieved 22 september 2011 https://en.wikipedia.org/wiki/silent_generation https://en.wikipedia.org/wiki/youth_unemployment mailto:viorina@univagora.ro http://www.huffingtonpost.com/2011/09/22/census-recession-young-adults_n_975476.html https://en.wikipedia.org/wiki/huffington_post https://en.wikipedia.org/wiki/huffington_post 31 countries). in 2009, leading commentators began to worry about the long-term social and economic effects of the unemployment. 7 millennials are the most highly educated and culturally diverse group of all generations, and have been regarded as hard to please when it comes to employers. 8 to address these new challenges, many large firms are currently studying the social and behavioral patterns of millennials and are trying to devise programs that decrease intergenerational estrangement, and increase relationships of reciprocal understanding between older employees and millennials. the uk's institute of leadership & management 9 researched the gap in understanding between millennial recruits and their managers in collaboration with ashridge business school. 10 the findings included high expectations for advancement, salary and for a coaching relationship with their manager, and suggested that organizations will need to adapt to accommodate and make the best use of millennials. millennials have benefited the least from the economic recovery following the great recession, as average incomes for this generation have fallen at twice the general adult population's total drop and are likely to be on a path toward lower incomes for at least another decade. in 2014, millennials were entering an increasingly multi-generational workplace. 11 even though research has shown that millennials are joining the workforce during a tough economic time they still have remained optimistic. globalization and this new generation globalization is not what it was a decade ago. what links the world together has changed fundamentally. for many companies, succeeding in this new operating environment will require rethinking many past decisions and assumptions. the 20th-century version of globalization was defined by rapidly growing trade in goods, as major multinationals created supply chains that spanned the world. globalization turned aut to be digital. cross-border data flows have grown by a factor of 45 over the past decade, and they’re projected to post another ninefold increase by 2020. according to a study research of mckinsey global institute we find that over the last decade, global flows of goods, services, finance, people, and data have contributed at least 10% of world gdp, adding $7.8 trillion in 2014 alone. perhaps most striking is the fact that data flows already accounted for $2.8 trillion of this value exerting a larger economic impact than the global trade in physical goods. this is a watershed moment, given that the world’s trade networks formed over the course of centuries, while cross-border digital flows barely registered just 15 years ago. 12 already 12% of the global goods trade is cross-border e-commerce, and half of the world’s traded services are delivered digitally. these transformations enable small and medium-sized enterprises around the world to compete head to head with larger industry incumbents. companies now have unprecedented opportunities to achieve both global scale and efficiency. but to realize them, many will have to shed old assumptions, particularly in the five areas outlined below. globalization has removed many of the barriers to social and cultural work, and companies that offer employees the opportunity to interact with people around the world are more highly regarded, especially in the eyes of young people. thus a percentage of 41 of those between 18-25 prefer to work in multinational companies, while the younger generation millenials 26-34 years have already worked in multinational companies and want to use their experience to launch their own business (50%), according to a study made by isense solutions for lowe group. 13 7 travis, alan, youth unemployment figures raise spectre of thatcher's britain, (12 august 2009), the guardian, london, retrieved 3 may 2010 8 http://www.forbes.com/sites/jennagoudreau/2013/03/07/7-surprising-ways-to-motivate-millennialworkers/#27d2e85b4ed9 visited in 30th octomber 2016 9 https://www.i-l-m.com visited in 1st november 2016 10 great expectations: managing generation y, 2011, i-l-m.com. 8 july 2011, retrieved 2 november 2011 11 armour, stephanie, generation y: they've arrived at work with a new attitude. (8 november 2005), usa today. retrieved 8 may 2014 12 http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/digital-globalization-the-new-eraof-global-flows visited in 2nd of november 2016 13 http://www.isensesolutions.ro/category/comunicate-isense-solutions/ visited in 2nd november 2016 http://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/digital-globalization-the-new-era-of-global-flows http://www.guardian.co.uk/society/2009/aug/12/youth-unemployment-rate-bristol http://www.forbes.com/sites/jennagoudreau/2013/03/07/7-surprising-ways-to-motivate-millennial-workers/#27d2e85b4ed9 http://www.forbes.com/sites/jennagoudreau/2013/03/07/7-surprising-ways-to-motivate-millennial-workers/#27d2e85b4ed9 https://www.i-l-m.com/ http://www.i-l-m.com/research-and-comment/generationy.aspx http://usatoday30.usatoday.com/money/workplace/2005-11-06-gen-y_x.htm https://en.wikipedia.org/wiki/usa_today https://en.wikipedia.org/wiki/usa_today http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/digital-globalization-the-new-era-of-global-flows http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/digital-globalization-the-new-era-of-global-flows http://www.isensesolutions.ro/category/comunicate-isense-solutions/ 32 according to the study mentioned before those seeking to engage in a multinational company have clear objectives and relate to work here as an opportunity for development, they expect to learn from the best, to promote rapid and earn a wage that allows them to live good. at the same time, they want to experience and interact with other cultures and people from different countries and are willing to travel frequently on business. on the following lines will be presetend some of the main reasons why young people are so attracted multinational companies and what expectations they have from. they want to experience other countries lifestyle many young people want to travel often for work, but also be given the chance to work at the headquarters in another country. most young people want jobs in countries of western europe especially if they have a significant salary compensation and are offered an attractive package of benefits. in addition, they know that such a move gives credibility and weight to their resume so that would be most attractive in the eyes of other employers. young people want more opportunities for development and a rapid career advancement young people have become more interested in management positions and wish to occupy such a position in about three years after they are hired. they are no longer content with a job but they will work for a career full of successes and if they don’t get it they will not hesitate to go elsewhere. the same study shows that their loyalty to the workplace decreased. thus, those aged 18-25 are already in the second job or third job, for those aged 2634 years. young believes that leaving a better position in another company is the best way to advance faster and increase their salary, especially if they feel that the current job prospects for career advancement are removed or uncertain. they want a lasting job even if changes more often than their predecessors jobs, young millennials want a permanent job and believes that multinationals with at least 1,000 employees offered more stability. they want to escape the stress that might be dismissed or that the company might go through restructuring, so that they look more confidently to large corporations, where the flow of people is more dynamic. they want an innovative and prestigious working environment the giants have the resources to invest in the latest technology and to equip offices so as to facilitate the work of employees and to increase productivity. young people want to work in an attractive environment, with modern desks, new computers have easy access to public transportation and to be surrounded by people with the same perspective. the workplace and the millennials 14 the statistics prove that the majority of millennials want to be their own bosses, and that they value meaningful work. besides that, millennials place high value on the following: open communication. millennials want to be heard. they believe in honesty and truth, regardless of seniority or level of authority within a business. witnessing leaders in action. millennial workplace culture places a high value on action. they want to see their bosses in action and learn from what they see. progressiveness. millennials crave the ability to work in a progressive environment where they can collaborate with their colleagues and complete meaningful work generational diversity in the workplace has created a unique set of conflicts that arise. while generational conflict has always been present in the workplace, it has become increasingly apparent as the youngest generation has settled – and become comfortable – in the workforce. some of the few common conflicts are as follows: 14 http://www.aperianglobal.com/attracting-retaining-millennials-global-workplace/ visited in 3rd november 2016 33 different values. baby boomers tend to seek money and status through a suitable career, while millennials aren’t looking for a lifelong job. the statistics show that millennials believe happiness is more important than wealth. opposing views about schedules. boomers are statistically known for being workaholics, but millennials want work to be fun – and they subsequently place a higher value on their free time away from traditional work. differing views on teamwork. baby boomers and members of generation x tend to value autonomy while millennials typically want to brainstorm and work collaboratively. opposing views on the role of the boss. there’s an idea that the older generations tend to micromanage younger employees, but millennials want to be trusted to do their jobs without micromanagement. varying levels of comfort with technology. baby boomers did not grow up with smartphones. the idea of work-life integration is strange to them. millennials, though, embrace the idea of working from their phones. young people in this generation are not very willing to work overtime. they want time to enjoy their families and hobbies. not much gets along with no fixed schedule, 9.00 18.00, preferring, instead, a flexible schedule that you and him alone conceive. that does not mean that there will be nowhere to work. moreover, an analysis cited by time magazine 15 shows that they work more than the representatives of x generation. when it comes to salaries will be paid so that they can enjoy life. because they like so much to spend, they need and rarely accept wages as minimum wage. conclusions for the multinational companies hiring new, young talent just out of college may be challenging some established practices of management and changing today’s corporate culture. with the shift of the younger employment force from generation x to generation millennials companies are finding that there are different attitudes and work habits that need to be incorporated into the existing culture. with companies now having different generational mentalities and priorities, the corporate melting pot has new challenges ahead. new college graduates are entering the workforce, having never known a world without computers, cell phones, email, or instant messaging. they have been brought up in a fast-paced, instant world that is always moving and changing. while the times and your company’s employees are changing, it is important that not only the younger employees need to be understood, but also the more senior employees need help understanding and embracing the change. it is important to consider how your company will embrace, manage, promote, and retain, these new, highly technical workers because millennials are not going away, they will only grow in the work force. references [1] anderson, kurt, pop culture in the age of obama. new york times. (5 august 2009). retrieved 29 november 2012 [2] armour, stephanie, generation y: they've arrived at work with a new attitude. (8 november 2005), usa today. retrieved 8 may 2014 [3] howe, neil, strauss, william millennials rising: the next great generation, a vintage original, 2000 [4] phillips, martin. future's bright: young brits upbeat over working lives. the sun. london. retrieved 26 july 2013 [5] travis, alan, youth unemployment figures raise spectre of thatcher's britain, (12 august 2009), the guardian, london, retrieved 3 may 2010 [6] yen, hope, census: recession turning young adults into lost generation, (22 september 2011), huffington post. retrieved 22 september 2011 [7] *** great expectations: managing generation y, 2011, i-l-m.com. 8 july 2011, retrieved 2 november 2011 [8] *** most millennials resist the millennial label. pew research center for the people and the press. retrieved 13 october 2015 15 http://time.com/tag/millennials/ visited in 3rd november 2016 http://usatoday30.usatoday.com/money/workplace/2005-11-06-gen-y_x.htm https://en.wikipedia.org/wiki/usa_today http://www.guardian.co.uk/society/2009/aug/12/youth-unemployment-rate-bristol http://www.huffingtonpost.com/2011/09/22/census-recession-young-adults_n_975476.html https://en.wikipedia.org/wiki/huffington_post http://www.i-l-m.com/research-and-comment/generationy.aspx 34 [9] http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/digital-globalizationthe-new-era-of-global-flows [10] http://www.isensesolutions.ro/category/comunicate-isense-solutions/ [11] http://www.aperianglobal.com/attracting-retaining-millennials-global-workplace/ [12] http://time.com/tag/millennials [13] http://www.forbes.com/sites/jennagoudreau/2013/03/07/7-surprising-ways-to-motivate-millennialworkers/#27d2e85b4ed9 [14] https://www.i-l-m.com agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 39-47 39 decarbonization as one of the ways to solve the problems of globalization a. korohod alona korohod international economic relations program, state university of trade and economics, ukraine orcid.org/ 0000-0003-3566-8038, e-mail: a.korohod@knute.edu.ua abstract. half a century, globalization has been a driving force in the development of world economies. besides positive effects, globalization has also caused negative consequences: accelerated climate change, degradation of natural resources, and increased emissions. that is why, in the last decade, the importance of climate and decarbonization policies has increasingly appeared on the world agenda. in addition, recent geopolitical events, including covid-19, the russian invasion of ukraine, further emphasize the importance of green solutions for recovery and decarbonization of countries' economies. this article aims to highlight the importance of decarbonization policies and identify the possibility of solving environmental and energy problems caused by globalization. through an analysis of existing literature and different countries' policies, the article identifies the potential of decarbonization policies to mitigate the negative impacts of globalization on the environment and energy sector. the findings suggest that the adoption of decarbonization policies can lead to a reduction in greenhouse gas emissions, improved energy efficiency, the development of renewable energy sources, and green jobs, ultimately contributing to a more sustainable and resilient global economy. keywords: globalization, decarbonisation, renewable energy, climate change, green jobs, energy efficiency. i. introduction for the last fifty years, globalization has been a key driver of economic growth and development worldwide. however, the rapid expansion of economic activity has also caused significant negative impacts on the environment, including climate change, resource depletion, and increased greenhouse gas emissions. as a result, in recent years, the importance of decarbonization policies has increasingly come to the forefront of global discussions. moreover, the recent geopolitical events, such as the covid-19 pandemic and the russian invasion of ukraine, have highlighted the need for sustainable and resilient economies. in response, many countries have increased their focus on decarbonization policies, recognizing the importance of green solutions for recovery and the decarbonization of their economies. i.1. globalization impact the adverse impacts of globalization on the environment have been widely documented by various studies. a study by the united nations environmental programme (unep) estimates that global greenhouse gas emissions increased by over 70% between 1970 and 2004, with the majority of the increase being attributed to energy-related activities (zhang, 2007). the intergovernmental panel on climate change (ipcc) has also identified the increasing concentration of greenhouse gases mailto:a.korohod@knute.edu.ua decarbonization as one of the ways to solve the problems of globalization 40 in the atmosphere as a key driver of climate change, leading to a range of environmental impacts such as rising sea levels, more frequent natural disasters, and loss of biodiversity (ipcc, 2022). i.2. geopolitical effect the covid-19 pandemic has exposed the vulnerabilities of the global economy and highlighted the need for more sustainable and resilient systems. the pandemic has led to disruptions in global supply chains, decreased demand for certain goods and services, and significant economic losses. governments and businesses have recognized the need to invest in more sustainable and resilient systems that can withstand future shocks. at the same time, the russian invasion of ukraine has led to a renewed emphasis on energy security and the need to reduce dependence on fossil fuels. many countries in europe rely heavily on russian gas imports, and the conflict has highlighted the risks of such dependence. governments have recognized the need to invest in renewable energy sources and reduce their reliance on fossil fuels to ensure energy security and reduce geopolitical risks. ii. methodology the methodology is focusing on a comparative analysis of established regulatory practices regarding the decarbonization of countries' economies, as well as the systematization of research and forecasts of scientists regarding the importance of decarbonization. in the context of the energy sector and the development of renewable energy sources, the methodology will include an analysis of policy implementation practices that aim to promote the growth of renewable energy technologies and reduce the reliance on fossil fuels. this analysis will include a review of policies such as feed-in tariffs, renewable portfolio standards, tax incentives, and subsidies for renewable energy technologies. overall, the methodology of the article will involve a comprehensive analysis of policies and practices that aim to promote the growth of renewable energy technologies and reduce the impact of globalization on the environment. by focusing on the energy sector and the implementation of renewable energy policies, the article will provide insights into the ways that decarbonization can be used as a means of addressing the challenges posed by globalization. iii. results iii.1. scientific view against this backdrop, there has been a growing recognition of the need for decarbonization policies as a means of mitigating the negative environmental impacts of globalization. decarbonization is the process of reducing or eliminating carbon dioxide and other greenhouse gas emissions from energy systems and other sectors. a report by the international energy agency (iea) highlights the importance of decarbonization in limiting global warming to well below 2 degrees celsius above pre-industrial levels, as outlined in the paris agreement (iea, 2021). there are many scientific articles that emphasize the importance of decarbonization policies. a large number of such articles focus on mitigating climate risks and reduce emissions through decarbonization (rockström, 2017). the article “a review of the global climate change impacts, adaptation, and sustainable mitigation measures” (abbass et al., 2022) is a sectorial assessment of climate change mitigation and adaptation approaches worldwide in the aforementioned sectors and the associated economic costs. the authors argue that decarbonization policies are necessary to mitigate the worst impacts of climate change and propose measures for mitigating negative effects in different sectors. alona korohod 41 william nordhaus in his article "the importance of carbon pricing for meeting climate targets" (nordhaus, 2017) argues that carbon pricing is essential for achieving the necessary emissions reductions to address climate change. the author discusses the economic benefits of carbon pricing and how it can help drive innovation and investment in clean energy technologies. the article “emissions reduction policies and their effects on economy” examines the relationships between emissions-reducing policies and their effect on the country’s economic growth (gdp) using carbon tax and co2 emission as explanatory variables and population and r&d as control variables (gurtu et al., 2022). another analysed block of scientific articles focuses on the economic benefits of decarbonization policies, arguing that they can promote job creation and economic growth. the authors write about pro-environmental economic model that changes the labor market and creates a green jobs (sulich and sołoducho-pelc, 2022), analyses connection between the further reduction of emissions and the short-term and long-term growth of employment in the energy sector (koasidis et al., 2022 ). in addition, it was observed that when analyzing decarbonization policies, scientists put a lot of emphasis on the energy sector and related policies. scientific results show that renewable energy in context of globalization have a significant impact in reducing co2 emissions (ulucak & yucel, 2021). the scientists came to a conclusion that countries should invest in renewable energy and environmental innovation aligned with the growth (sahoo et al., 2022), enhance the quality of governance and democracy, attract clean foreign direct investments, promote renewable energy use, and adopt clean economic growth strategies to decarbonize their respective economy (hamid et al., 2022). iii.2. policy responses moreover, many countries have increased their focus on decarbonization policies. governments have recognized the importance of investing in green solutions for recovery, such as renewable energy sources, energy efficiency, and sustainable infrastructure. analyzing the policies of different countries regarding decarbonization and recovery, it is worth highlighting the most widespread policy solutions of the countries on the reduction of emissions and the negative consequences of globalization processes: 1) carbon pricing: a carbon price is a fee imposed on fossil fuels' carbon content to incentivize the transition to low-carbon alternatives. a carbon tax or cap-and-trade system reduces greenhouse gas emissions from industries that contribute to globalization, such as shipping, aviation, and manufacturing. 2) renewable energy incentives: policies that encourage the development and deployment of renewable energy sources, such as solar, wind, and hydroelectric power, and help reduce the carbon footprint of globalization. this can include feed-in tariffs, tax credits, and subsidies for renewable energy investments. 3) energy efficiency standards: regulations that require more efficient energy use in buildings, appliances, and vehicles and focus on reducing energy consumption and greenhouse gas emissions from globalization. this includes energy performance standards, fuel efficiency standards, and building codes. 4) sustainable transport policies: policies that encourage sustainable modes of transport, such as public transit, biking, and walking, reduce the environmental impacts of transportation associated with globalization. this includes public transport infrastructure investments, electric vehicle incentives, and congestion pricing. decarbonization as one of the ways to solve the problems of globalization 42 5) circular economy initiatives: a circular economy is an economic system in which waste is minimized, and materials are reused, repaired, or recycled. this is used to reduce globalization's environmental impacts by reducing resource consumption, waste generation, and greenhouse gas emissions. policies encouraging circular economy practices include extended producer responsibility, product labeling, and waste reduction targets. iii.3. renewable energy incentives renewable energy policies are measures designed to promote the development and deployment of renewable energy sources. renewable energy policies can play an important role in mitigating the negative environmental impacts of globalization, by reducing greenhouse gas emissions from economic activities associated with globalization. moreover the attack of the russian federation on ukraine acted as a powerful catalyst for decarbonization processes, forcing the countries of the world community to rethink their perception of the russian federation’s fossil fuels as a source of funding for its military aggression (kudirko et al., 2022). in recent years, countries around the world have actively implemented renewable energy policies to promote the development and deployment of renewable energy sources, as a means of mitigating the negative environmental impacts of globalization and become more energy independent. these policies include feed-in tariffs, tax incentives, renewable energy standards, and carbon pricing, among others. the european union proposed the european green deal a centerpiece of its recovery plan, investing in renewable energy, sustainable transport, and circular economy practices. the european union's green deal is a comprehensive plan aimed at achieving climate neutrality by 2050, with a target of reducing greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. the plan includes significant investments in renewable energy, sustainable transport, and circular economy practices, among other initiatives. the european union's investment in renewable energy is particularly noteworthy, as the bloc has set a target of sourcing 32% of its energy from renewable sources by 2030. one of the key components of the european union's green deal is the eu renewable energy directive, which aims to increase the share of renewable energy in the eu's final energy consumption to at least 32% by 2030. the directive sets binding targets for each eu member state, taking into account their starting points and national circumstances. this policy has already had a significant impact on the decarbonization process in europe, with renewable energy sources accounting for 34.6% of the eu's electricity generation in 2020, up from 31.6% in 2019. this progress is expected to continue in the coming years, as the eu continues to invest in renewable energy infrastructure and technologies. the united states has also committed to significant investments in renewable energy and infrastructure as part of its build back better plan. the plan includes a proposed 2 trillion usd investment in clean energy over the next decade, with a focus on achieving 100% clean electricity by 2035. this investment is expected to create millions of new jobs in the renewable energy sector, while also reducing greenhouse gas emissions and increasing energy security. the plan also includes significant investments in electric vehicles, energy efficiency, and sustainable buildings. the united states has implemented a range of federal and state-level policies to promote renewable energy, including tax credits, loan guarantees, and renewable energy standards. many states have also implemented net metering policies, which allow households and businesses to sell excess renewable energy back to the grid. alona korohod 43 other renewable energy policies in different countries around the world: 1. germany: germany is a world leader in renewable energy, with a goal to generate 65% of its electricity from renewable sources by 2030. the country has implemented a feed-in tariff system, which guarantees a fixed payment for renewable energy generated by households, businesses, and utilities. 2. china: china is the world's largest producer of solar and wind energy, and has set a target to achieve 20% of its energy mix from non-fossil fuel sources by 2030. the country has implemented a range of policies to support renewable energy, including subsidies, tax incentives, and feed-in tariffs. 3. japan: japan has set a goal to achieve a 22-24% renewable energy share by 2030, and has implemented a feed-in tariff system to support the development of renewable energy. the country has also implemented energy efficiency standards and a carbon pricing system. 4. india: india has set a target to achieve 40% of its electricity generation from non-fossil fuel sources by 2030, and has implemented a range of policies to support renewable energy, including feed-in tariffs, tax incentives, and renewable energy certificates. 5. brazil: brazil has implemented a range of policies to promote renewable energy, including tax incentives, feed-in tariffs, and a renewable energy auction system. the country has also implemented biofuels mandates, which require a certain percentage of transportation fuel to come from renewable sources. iv. statistical analysis the transition to renewable energy sources such as solar, wind, and hydropower has been identified as a critical step in achieving decarbonization goals. a study by the european union’s joint research centre (jrc) highlights the potential of renewable energy sources to contribute to decarbonization efforts, with the authors noting that renewable energy technologies have become increasingly competitive with fossil fuels in terms of cost (tsiropoulos et al., 2020). figure 1. renewable electricity capacity growth by region/country, main case 2015-2020 and 2021-2026 source: international energy agency (international energy agency [iea], 2021) decarbonization as one of the ways to solve the problems of globalization 44 scientists and experts have emphasized the importance of decarbonization policies in addressing the challenges of climate change and environmental degradation caused by globalization. a study by the national renewable energy laboratory (nrel) in the united states found that in all modeled scenarios that the health and climate benefits associated with fewer emissions exceed the power system costs to get to 100% clean electricity (denholm et al., 2022). in addition, the report notes that such a green transition is quite real and not only in united states. the international energy agency is forecasting the growth of renewable capacity to accelerate in the next five years, accounting for almost 95% of the increase in global power capacity through 2026 (international energy agency [iea], 2021). moreover, according to the iea, the forecast increase in renewables is now 30% higher than the growth volumes anticipated before the russian full-scale invasion into ukraine. global renewable energy capacity is set to almost double, increasing by 2,400 gigawatts to reach 5,650 gigawatts by 2027 (international energy agency [iea], 2022). such predictable growth contributes not only to the reduction of pollution and emissions, but also to the growth of other economic indicators, in particular the number of jobs, green jobs. clean energy employment is “rapidly growing” and now accounts for more than half of all energy sector jobs, according to a new report. the first world energy employment report from the iea finds that hiring in clean energy has pushed energy sector employment globally above pre-pandemic levels – despite the oil and gas sector still struggling to recover from big layoffs in the initial stages of covid-19 (international energy agency [iea], 2022). russia’s invasion of ukraine and the energy crisis that followed have seen countries looking to “accelerate the growth of homegrown clean energy industries,” said iea executive director fatih birol. figure 2. energy employment in fossil fuel and clean energy sectors, 2019-2022 source: international energy agency (international energy agency [iea], 2022) thus, russia's war against ukraine became a catalyst for the introduction of renewable energy technologies. and it is worth noting, not only in the world, but also in ukraine, even despite the constant shelling of the energy infrastructure. with the beginning of the full-scale invasion, especially during the difficult winter period, ukrainians began actively install home installations in order to provide themselves with energy and be energy independent. in 2022, the share of investments in household solar power accounted for more than 60% of total investments in green genetation capacities. alona korohod 45 figure 3. investments in “green” generation capacity in 2021-2022 source: energy map v. conclusions the article highlights the significance of decarbonization policies in promoting economic growth and job creation, while reducing the carbon footprint of economic activities. this is in line with previous research findings which have demonstrated that the transition to a low-carbon economy can lead to significant economic benefits, including job creation, increased energy security and reduced costs of energy production. for instance, a study by the international energy agency found that the renewable energy sector has the potential to create up to 42 million jobs by 2050 (international energy agency [iea], 2022). this underscores the economic potential of decarbonization policies in promoting sustainable economic growth and reducing the risks of future shocks. moreover, the article highlights the importance of sustainable and resilient systems in reducing the risks of future shocks and providing solutions for energy independence. this is in line with previous research which has emphasized the need for resilient infrastructure and systems to mitigate the impacts of climate change and other shocks. for instance, a study by the global commission on adaptation (gca) found that investing in climate adaptation measures can yield significant economic benefits, including $7.1 trillion in net benefits by 2030 (verkooijen, 2019). this highlights the importance of adopting a holistic approach to decarbonization, which not only focuses on reducing emissions, but also on building resilient systems that can withstand future shocks and provide longterm solutions for energy independence. in conclusion, the article provides a compelling argument for the importance of decarbonization policies in promoting sustainable economic growth and 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(2019, september 10). adapting to climate change could add $7 trillion to the global economy by 2030. global center on adaptation. https://gca.org/adapting-to-climatechange-could-add-7-trillion-to-the-global-economy-by-2030/. 20. zhang, y. (2007). warming of the climate system is unequivocal: highlights of the fourth ipcc assessment report. https://www.un.org/en/chronicle/article/warming-climate-systemunequivocal-highlights-fourth-ipcc-assessment-report. agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 93-101 93 importance of internal control for creative accounting a. osmanović, d. šarić azira osmanović, damir šarić international business-information academy tuzla, bosnia and herzegovina e-mail: azira.osmanovic1@gmail.com abstract. creative accounting enabled accountants to use accounting policies more flexibly. however, it was precisely this flexible application of accounting policies that led creative accounting to become synonymous with manipulative accounting in practice. financial reports should reflect the actual state of business, but they are often subject to numerous manipulations. in order to prevent manipulations in financial reports, it is necessary for the company to have an established internal control system. in the research conducted through an online survey in bosnia and herzegovina, the connection between internal control and the use of creative accounting was investigated. the research confirmed two pre-set hypotheses that the use of creative accounting has an impact on the quality of financial reports, and that well-established internal control prevents to use of creative accounting. keywords: internal control, creative accounting, manipulative accounting, financial reports introduction the desire of users of financial statements is that financial statements provide objective, true and fair information. precisely the information from financial reports is needed in the process of business decision-making and making business decisions. investors and creditors use financial information to assess the quality of the company's results, as well as future cash flows associated with their investments. realistic financial reporting implies that financial reports are prepared in accordance with the rules and regulations for financial reporting, that is, in accordance with accounting standards and regulations. financial statements should not contain materially significant errors and irregularities, because the goal of compiling financial statements is to show the true and objective business of the company. unlike real financial accounting, creative accounting includes all those procedures used to manipulate data in financial statements. there are numerous irregularities in the company's operations, and often the consequences of fraud can be unfathomable. precisely because of this, the need to introduce supervisory mechanisms, both external and increasingly internal supervision, first of all with the help of internal control and internal audit, was realized. internal controls include a series of activities aimed at improving the quality of business processes. company management shapes internal control systems. the goal of all employees should be to establish a quality system of internal controls. the task of internal controls is to detect illegal activities and to influence the prevention of such activities. today companies pay more and more attention to risk assessment. internal control can significantly affect the occurrence of errors and fraud in business. mailto:azira.osmanovic1@gmail.com importance of internal control for creative accounting 94 i. theoretical basis of the research i.1. the term of creative accounting many people think that accounting is a "clean" job, and that financial fraud occurs outside of accounting. all over the world, including in bosnia and herzegovina, it is not an unusual situation that company owners and managers want to embellish the picture of the company's financial position, and try to show the company's performance better than what it really is. this is exactly the kind of "beautification" and "cleaning" that takes place in accounting. how the image of the company will be improved depends on the knowledge of the acountant. creative accounting at the very beginning had the task of enabling a realistic and objective presentation of the actual financial position and results of the company's operations through financial statements within accounting legal regulations. however, in practice, creative accounting has become synonymous with "manipulative accounting". although financial reports should be true, fair and reliable, they are often subject to numerous manipulations. manipulations that can be done often result from accounting standards, because accounting standards are often unclear and very complex, and assessments are subjective. in the beginning, creative accounting was not intended to be prohibited, but accountants were given the opportunity to apply accounting policies more flexibly. however, it is precisely this flexible application of accounting policies that has led creative accounting to become synonymous with manipulative accounting in practice. in this context, it is primarily based on whether there is flexibility and to what extent it is applied in accounting procedures (belak, 2011). the existence of flexibility, according to mulford and comiskey (2002), is necessary due to the economic environment and financial transactions that companies face, which in many cases are not similar in order for the same accounting practice to suit all of them. creative accounting can be defined as a process in which accountants use knowledge from the field of accounting standards and principles for the purpose of manipulating balance sheet positions and their values that are presented in financial statements. creative accounting is not a one-time act, but creative accounting is a long-term process, a multi-year process that starts small and ends with a waterfall of accounting manipulations, but it is also a phenomenon that can be carried out in a legal and legitimate way and in accordance with the applicable accounting regulations, rules and standards (negovanović , 2011). fraud mainly occurs where controls are weak, and where controls are not applied or do not exist. that is why it is very important to determine the level of internal controls in companies. it is precisely this strengthening of controls that reduces the possibility of fraud. i.2. purpose and motives for applying creative accounting based on the research, it was determined that there are numerous goals of using creative accounting in the company. if they are compared and analyzed in detail, we can conclude that these are goals, which are very important goals for management at all times. although different goals are stated by different authors, it is still possible to reduce them to the following four:  maintenance of investor confidence,  creation of bonuses, and use of stock options,  preparation for takeover or defense against hostile takeover,  postponement of income tax for future periods. azira osmanović, damir šarić 95 i.3. system of internal controls internal control plays an increasingly important role in the company's internal control system, and is reflected in the protection of assets, prevention and detection of fraud and irregularities that occur during business operations. evaluation of the internal control system is carried out by an internal audit. internal control was initially tasked with preventing and detecting fraud. today, the tasks of internal control are more complex, so different definitions of internal control can often be found in the literature. "internal control is a set of measures and procedures for constantly checking the operation of the accounting system and the business system in general with the aim of detecting and correcting errors before the audit procedure." (vujević, 2003). the system of internal controls is based on control and organizational procedures, but also other measures and policies that are adopted with the aim of implementing the business policy adopted by the management, as well as protecting the company's assets. internal control acts preventively, detects errors and frauds, ensures the correctness of accounting records, in order to have reliable financial information. internal control is an extremely complex activity, which is extremely important for the company. the internal control system is designed and implemented by the employees of the company at all organizational levels, but the management should make additional efforts so that the expected benefits are greater than the expected costs in order to achieve the effectiveness of internal control. the internal control system is established differently from company to company, primarily because of the different goals they have, but also because of the size of the company, number of employees, organizational structure, type of activity, etc. internal control implies analysis of the environment or conditions in which control is carried out, then risk assessment, undertaking control activities, information and communications, and supervision and monitoring. i.4. creative accounting in the system of internal controls companies have their own specifics of work, organization, or activities. establishing a quality and reliable system of internal controls in order to prevent the application of creative accounting is not easy to implement. internal controls were created to protect the company from creative accounting and various frauds. in order to prevent creative accounting, internal controls must be applied at all stages of the accounting process, and include control of the input, processing and output of information from the accounting system. internal controls include "drafting of written procedures that will define responsible persons, description of activities, procedures and execution deadlines and double signature records" (bedeković, 2013). to prevent creative accounting, internal controls are focused on the division of duties and authorities, and the employee cannot make and hide mistakes, irregularities and fraud, or execute transactions, or have control over the company's assets (gulin et al., 2012). i.5. overview of previous research many authors analyze the importance of internal control in preventing creative accounting. tušek et. al. (2014) define internal control as a series of procedures and actions that, through the principle of self-control, are performed by employees at all organizational levels, whose goal is to improve the efficiency and effectiveness of all business processes and operations as a whole. the association of certified fraud examiners (acfe) (2020) lists fraud in financial importance of internal control for creative accounting 96 statements as the main forms of fraud committed by employees of the organization, along with corruption and embezzlement. halilčević (2020) believes that in order for the internal control system to fulfill its role in preventing fraud, it is necessary to properly assess the risks faced by the company, and to design appropriate controls based on the assessed threats. rajković (2021) believes that the growing number of frauds and financial scandals in the last few decades justifies the skepticism and fear of external users regarding the credibility of financial statements presented by reporting entities. the coso framework (2013) states that "transaction controls are the most important controls in an enterprise, since they are directly related to risks in business processes established to meet set goals." according to deloitte (2021) "understanding the most important risks that threaten the company and designing relevant internal controls to mitigate these risks can be a key differentiating factor in the growth and development of the company". mahaček, bolfek and šakota (2015) believe that with the establishment of internal control, as well as internal audit, it provides greater opportunities for detecting and preventing fraud. ii. methodology ii.1. population and sample empirical research that was conducted tried to prove what are the motives for accounting fraud, and what are the consequences of these frauds. the target population in the research were employees in accounting, finance and internal auditors on the territory of bosnia and herzegovina. a questionnaire was used to examine the effectiveness of internal controls and creative accounting procedures. 91 employees who duly returned the completed survey questionnaires were surveyed. the paper set itself the task of investigating the significance of internal control in preventing the application of creative accounting. in accordance with all the above, the paper sets out the main and one auxiliary scientific research hypotheses: h1. the application of creative accounting has an impact on the quality of financial statements. ph1. with a well-established internal control, the application of creative accounting is prevented. ii.2. statistical analysis the conducted research is based on the collection of primary data, a method of surveys through a highly structured questionnaire intended for employees in accounting, finance and internal audits. out of the total number of questionnaires sent to 120 e-mail addresses, in the period from october 1, 2022 to february 1, 2023, 91 duly completed questionnaires were returned, which is a response rate of 76.00% of the total sample. the response rate is considered acceptable for this type of research, but it is noted that the results of this research are not a rule, but are certainly a good guideline for future research. adequate control is considered to have been established if it was planned and designed by the management with the aim of managing the organization's risks effectively, and achieving the organization's goals efficiently and economically. azira osmanović, damir šarić 97 iii. results at the beginning, creative accounting aimed to enable accountants to apply accounting policies more flexibly, however, in practice, creative accounting has become synonymous with manipulative accounting. in order to prevent manipulations with accounting data, it is necessary to introduce internal controls. this research sought to investigate whether accountants, financiers and internal auditors believe that internal control is important for preventing the application of creative accounting. on the basis of 91 duly completed questionnaires, a new picture was obtained about the application of creative accounting and the efficiency of internal control. in the research that was conducted, the respondents made an exceptional contribution to a better understanding of the subject matter. out of 91 respondents in the survey, 36 heads of accounting, 20 clerks employed in the accounting service, 27 clerks employed in finance, and 8 internal auditors gave answers to the questions. most respondents (68.1%) believe that the application of creative accounting affects the quality of financial statements. a smaller number (29.7%) of them believe that the application of creative accounting has little effect on financial statements, while there are the least number of those (2.2%) who believe that creative accounting has no effect on financial statements. figure 1. surveyed according to the evaluation of the efficiency of internal control in the company based on the conducted research on the evaluation of the level of internal control, where the respondents rated the internal control in their company on a scale of 1 to 5, the fewest respondents (only 2 respondents) believed that internal control was weak in their company, while the most respondents declared for moderate control in the company (37 respondents), while 15 respondents declared that a strong internal control was established in their company (figure 1). the research results show that the legal form of the company has no significant influence on the evaluation of efficiency, namely the largest number of respondents, regardless of the legal form, rated the internal controls as very good, good and excellent respectively, as shown on figure 2. 1 2 37 36 15 0 5 10 15 20 25 30 35 40 1 ( weak) 2 3 4 5 (strong) number of respondent importance of internal control for creative accounting 98 figure 2. surveyed according to the evaluation of the efficiency of internal controls on a scale from 1 to 5, analyzed according to the legal form of the company based on the research, an analysis was made of the average efficiency rating of the internal control system according to the legal form, which is shown in table number 1. in the case of limited liability companies, although there is the lowest level of implementation, where they are established, internal controls are rated highly, and the average rating is the highest 3.69. probably due to the smallest number of respondents, the highest rating was given to public companies with an average rating of 4. then followed by institutions with an average of 3.67, joint-stock companies that have established internal controls to the greatest extent had the worst average rating of 3.62. table 1. respondents according to the average assessment of internal control observed by legal form of the company legal form average grade ltd 3,69 joint stock company 3,62 public company 4,00 public institution 3,67 other 3,70 overall average grade 3,73 the most common procedures of creative accounting in bosnia and herzegovina, as well as those applied in the world, refer to provisions, then extraordinary income and extraordinary expenses, as well as the reduction of earnings. only four respondents mentioned off-balance sheet debts as a creative accounting procedure ( figure 3.) 0 10 20 30 40 1 2 3 4 5 other public institution public company joint stock company ltd azira osmanović, damir šarić 99 figure 3. creative accounting procedures according to the respondents these data are also confirmed by the analysis of financial statements, where it is observed that the most frequent manipulations occur precisely on the listed items in the balance sheets of companies in bosnia and herzegovina. by applying multiple regression analysis, the assumption about the influence of creative accounting on the quality of financial statements was verified in the research. table 2. statistical presentation of the influence of creative accounting on the quality of financial statements mod el r adjuste d r square std. error of the estima te r square chang e f change df1 df2 sig. f change durbin watson 1 ,686 ,450 ,60202 ,471 23,254 1 26 ,000 1,756 the correlation coefficient r (0.686) reveals a medium-strong connection between the observed variables, the influence of creative accounting on the quality of financial statements. f (23.254) indicates that the results are statistically statistically significant, and it is concluded that the application of creative accounting is related to the quality of financial statements. the obtained data confirm hypothesis h1, which assumes that there is a statistically significant relationship between the application of creative accounting and the quality of financial statements. table 3. statistical presentation of the connection between internal control and the application of creative accounting mod el r adjuste d r square std. error of the estima te r square chang e f change df1 df2 sig. f change durbin watson 1 ,644 ,415 ,63216 ,418 18,546 1 26 ,000 1,486 0% 5% 10% 15% 20% 25% 30% 35% reservations extraordinary income extraordinary costs off balance sheet debts reducing profits importance of internal control for creative accounting 100 the correlation coefficient r (0.644) reveals a moderately strong relationship between the observed variables, the connection between internal control and the application of creative accounting. f (18,546) indicates that the results are statistically significant, and based on this, the conclusion is reached that a well-established internal control affects the prevention of the application of creative accounting. the obtained data confirm hypothesis ph1, which assumes that there is a statistically significant relationship between internal control and preventing the application of creative accounting. conclusions accounting should be a "clean" job, given that it has principles that should be followed. however, as in any business, "creative" accountants appeared in accounting, and with them creative accounting. creative accounting does not have to be illegal, but the question arises as to whether it is ethical or not. financial reports should be true, fair and reliable, because only in that case they justify their role. financial statements are often subject to numerous manipulations. maneuvering space is found in accounting standards, which are often unclear and very complex, and assessments are subjective. with the introduction of internal and external control systems in the company, it is possible to reduce, but not eliminate, the percentage of fraud and manipulation by employees or company management. in order for the company's management to confront errors and frauds that may appear in the financial statements, it helps a lot: a reliable accounting system, appropriate control procedures, as well as a clear definition of the policy of accounting and financial statements. adequate human potential, an understandable code of ethics as well as the provision of continuous training for employees regarding accounting errors and manipulation of financial statements are also needed. in the end, it can be concluded that the application of creative accounting does not only endanger the company that applies it, but also the entire economic system of the country. in the fight against this growing problem, companies cannot rely only on existing controls to prevent and detect fraud, but must clearly define illegal activities and sanctions for those who commit fraud. discovering and researching the causes of fraudulent financial reporting, as well as a preventive approach and prevention of illegal and socially unacceptable behavior, aims to increase the level of security of users of financial information. bearing in mind the responsibility that the accounting profession has towards the social interest, as well as the scope of forensic accounting in discovering the causes and techniques of fraud, it is very important to point out future activities in the direction of developing unique educational and certified programs at the state level. given that criminal activities are represented in all spheres of society and are a burden to both developed and less developed countries, it is certain that this topic and the suppression of the application of creative accounting will be the subject of new considerations and further research. references 1. association of certified fraud examiners (2020). report to the nations: 2020 global study on occupational fraud and abuse. https://acfepublic.s3-us-west2.amazonaws.com/2020-report-to-the-nations.pdf 2. belak v.(2011).business forensics & forensic accounting. zagreb.belak excellens d.o.o. https://acfepublic.s3-us-west2.amazonaws.com/2020-report-to-the-nations.pdf azira osmanović, damir šarić 101 3. bedeković, m. (2013). the significance of accounting controls in the system of internal financial controls of budget users. practical management, 4 (1), 0-0. https://hrcak.srce.hr/118741 4. committee of sponsoring organizations of the treadway commission. (2022). about us. https://www.coso.org/sitepages/aboutus.aspx 5. deloitte. (2021). internal controls and risk assessment: what every private company should know. https://www2.deloitte.com/content/dam/deloitte/us/documents/audit/internalcontrolsand-risk-assessments-pov1.pdf 6. gulin, d. perčević, h. tušek, b. žager, l. (2012). business planning, control and analysis. zagreb: hzrif 7. halilčević, e. the impact of forensic accounting on corporate fraud in bosnia and herzegovina. journal of economics and politics of transition tuzla-zagreb-belgradebukurešt, 2020. vol. 23, no. 46. https://hrcak.srce.hr/file/397576 8. huzanić, b. (2015). creative accounting. accounting, auditing and finance. 5/15, 26-33. 9. mahaček, d. bolfek, b. šakota, b. (2015). the role of internal audit in preventing errors and fraud in the conditions of computer data processing. oeconomica jadertina, 5 (1), 48-64. https://hrcak.srce.hr/146892 10. mulford, c.w. comiskey, e.e. (2002). the financial numbers game. new york: john wiley & sons, inc. 11. negovanović, m. (2011). creative accounting and falsification of financial statements part three, accounting, auditing and finance, 3/11, 82-87 12. rajković s. (2021). the impact of creative accounting on the quality of financial reporting: empirical research in the republic of srpska. financing 03/21, 17-27. https://financingscience.org/wp-content/uploads/2021/10 /en_321.pdf 13. vujević, i. (2003). revision. split. faculty of economics in split 14. tušek, b. žager, l. barišić. i. (2014). internal audit. zagreb: hzrif https://hrcak.srce.hr/118741 https://www.coso.org/sitepages/aboutus.aspx https://www2.deloitte.com/content/dam/deloitte/us/documents/audit/internalcontrols-and-risk-assessments-pov1.pdf https://www2.deloitte.com/content/dam/deloitte/us/documents/audit/internalcontrols-and-risk-assessments-pov1.pdf https://hrcak.srce.hr/file/397576 https://hrcak.srce.hr/146892 https://financingscience.org/wp-content/uploads/2021/10%20/en_321.pdf agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 13 (2019) implications of human trafficking on the romanian society camelia-elena nichita (vasile)1, miruna mutu2, gabriela bologa3 1, 2 ”valahia” university of târgoviște, doctoral school of economic and humanistic sciences, str. lt. stancu ion, nr. 35, târgoviște, romania 3 agora university of oradea, str. p-ța tineretului, nr. 8, oradea, romania e-mails cam3vas3@yahoo.com, mutu.miruna@yahoo.com, gabi_fiat@yahoo.com abstract in order to raise awareness of the phenomenon of trafficking in human beings among different institutions (law enforcement, child protection, ngos) and to improve the measures they can take, the article aims to identify how severe is the phenomenon of human trafficking in romania. we also want to identify the repercussions of this phenomenon as well as to identify the solutions at political and legislative level in order to reduce or even combat this phenomenon. keywords: trafficking in human beings, victim (designates any natural person who is subjected to trafficking in human beings), sexual exploitation, forced labor or services, slavery, servicing or taking organs. 1. introduction motto: "ignorance is the mother of all crimes", honor de balzac international conventions ratified at national level define human trafficking in :, recruiting, transporting, transferring, accommodating or receiving a person, through threat, violence or other forms of coercion, kidnapping, fraud or deception, abuse of authority or profiting from the impossibility of that person to defend himself or to express his will either by offering, giving, accepting or receiving money or other benefits in order to obtain the consent of the person who has authority over another person, for the purpose of exploiting that person. exploitation consists of forced prostitution or other form of sexual exploitation, forced labor or forced services, slavery or similar practices, servitude, or organ removal. ” (law no. 300 of july 11, 2006 for the ratification of the convention of the european council on the fight against trafficking in human beings, adopted on march 3, 2005, signed by romania on may 16, 2005 in warsaw). also, the defense of human rights and fundamental freedoms is a permanent and common concern of all legal systems. according to the new penal code, art. 210, human trafficking is defined as follows: (1) recruitment, transportation, transfer, harboring or receipt of a person in order to exploit its committed: a) coercion, abduction, deception or abuse of authority; b) taking advantage of the impossibility to defend or to express their will or particularly vulnerable status of that person; c) offering, giving or receiving money or other benefits in exchange for the consent of a person having control over that person, shall be punished with imprisonment for 310 years, deprivation of certain rights. (2) human trafficking committed by a public official in the performance of their duties shall be punished with imprisonment for 512 years. (3) trafficking victim's consent is not relevant supporting. (3) human trafficking committed by a public official in the exercise of his duties is punished by imprisonment from 5 to 12 years. (4) the consent of the victim of trafficking is not a justifying cause. mailto:cam3vas3@yahoo.com mailto:mutu.miruna@yahoo.com mailto:gabi_fiat@yahoo.com 2 human trafficking by its forms of manifestation (sexual exploitation, forced labor, forced to beg or committing crimes) continues to be one of the social phenomena with a global coverage that brings significant moral, mental and physical harm to its victims and not only”. this phenomenon has become alarming, especially when children fall victim to the networks of traffickers. the most exposed to the recruitment /trafficking for the purpose of exploitation are the children, by the term "child" being named any person under the age of 18 years. under article 211 of the new penal code, child trafficking involves: (1) the recruitment, transportation, transfer, harboring or receipt of a child, in order to exploit it, shall be punished with imprisonment from 310 years deprivation of rights. (2) the punishment is imprisonment from 5 to 12 years and deprivation of certain rights when: a) the offense was committed under art. 210 par.(1); b) the offense was committed by a public official in the performance of duties; c) the offense endangered the life of a minor; d) the offense was committed by a family member of a minor; e) the offense was committed by a person in whose care, protection, education, protection or treatment is minor or a person having abused their recognized position of trust or authority over the minor. (3) trafficking victim's consent is not relevant supporting. there are few cases in which vulnerable people get into the hands of people for whom nothing is more important than the prospect of financial gains resulting from their exploitation. ” 2. recruitment of victims human trafficking, beyond the particular aspects registered at the individual level, is generally manifested through a succession of three stages: recruitment, transport and exploitation. recruitment arises from the romanian state, respectively one of the main countries of origin of the victims of trafficking exploited in the european countries. recruitment is materialized by the proposal made to the victim in the initial phase of the trafficking process, by the person trafficking. finally, this proposal is usually a false promise regarding the object or nature of the work, the destination of the victim's trip, the conditions in which he will be, will be kept or will work, or the place of the activity. recruitment can be done by a company, either directly or through a notice, through the media or the internet or by one or more persons, through different methods. recruitment, can be done by force or threat, or other coercive forms, by kidnapping, fraud, deception, abuse of power, exploitation of a vulnerability, by offering money or benefits, in order to obtain the consent of one person over another, all with the purpose of the exploatation”. in general, the article aims to contribute to the understanding of the trafficking phenomenon in romania, which, on the one hand, would allow the prevention and awareness campaigns to be targeted, effective anti-trafficking actions, and the specialists who contact the victims (prosecutors, judges, police officers, social workers, etc.) to establish the support measures in an effective way. in this regard, at present, experts in the field of anti-trafficking measures confirm the difficulties created by stereotypes (traditional opinions and perceptions of how trafficking works, who are the victims of this phenomenon and how to respond to this challenge), including the fact that trafficking is understood as sexual exploitation / prostitution, ignoring the complexity of the definition of trafficking which includes exploitation through work, begging, trafficking for the purpose of committing criminal activities. 2.1. main factors favoring at present, in romania, the main factors favoring human trafficking situations are: economic difficulties (poverty and unemployment), rural / urban disparities, migration, education and information level, deficiencies in the support provided by the community and in 3 infrastructure, ethnic differences, family (its disintegration and neglect of children), alcoholic parents, violence and abuse in the family or in institutions of protection, entourage. none of the above factors can explain or generate alone the phenomenon of human trafficking, they only work in concentrated. romania has been, in recent years, a country of origin for victims of human trafficking, in a condition of increased vulnerability of some segments of the population, in search of better living conditions. to the same extent, western countries have continued to maintain the status of exploitation countries for romanian people drawn into exploitation and trafficking situations, where there is the right context for tolerating begging, an increased demand for cheap labor. also, in the states where the legislation is permissive or where prostitution is tolerated or legalized, the demand coming from the consumers of sexual services, they are elements of encouragement for the vulnerable people, looking for more or less explicit sources of income, legal or illicit. 3. national / international legislative instruments romania's constitution, in the first article, guarantees as supreme values as human dignity, the rights and freedoms of citizens, the free development of human personality, justice and political pluralism. human trafficking is defined in art. 12 and art. 13 of law no. 678/2001 for the prevention and combating of human trafficking, with modifications and completions, the definition used at national level being in line with that of the protocol on the prevention, repression and punishment of human trafficking, especially of women and children. for the purpose of regulating the national networks of services and protection of victims of human trafficking, the services provided and their quality, measures regarding ensuring an optimal environment for the victims of human trafficking, ensuring the necessary qualified personal and its continuous improvement was adopted decision no. 1.238 of october 10, 2007 regarding the approval of specific national standards for specialized services of assistance and protection of victims of human trafficking. a legislative instrument with the purpose of protecting the victims of crime is law no. 211/2004 regarding some measures to ensure the protection of victims of crime by regulating measures to inform victims of crime about their rights, as well as psychological counseling, free legal assistance and financial compensation by the state. specific rules are provided for minors, in the sense that they are not obliged to set up an injured party or to make a criminal complaint, and the period of legal and psychological assistance is 3 months longer than for adults. in order to guarantee and protect the fundamental rights and freedoms of individuals, in particular the right to intimate, family and private life, regarding the processing of personal data, law no. 677/2001 for the protection of persons regarding the processing of personal data and the free movement of these data. thus, all victims of human trafficking, including the minor ones, benefit from these rights right from the moment they are identified. the un convention on combating organized and cross-border crime adopted in new york on november 15, 2000, as well as its additional protocol on preventing, combating and punishing trafficking in human beings, in particular women and children, highlights the role of cooperation in the prevention. and of combating the most operative of the organized crossborder crime being ratified at national level by law no. 565/2002. aspects regarding the protection of victims of human trafficking and especially of women and children, meticulously analyze preventive actions as well as cooperation which impose the achievement by adapting to the specific social policies in the field are regulated by this convention. also, romania, signed the convention of the council of europe on combating trafficking in 4 persons on may 16, 2005 in warsaw convention which was ratified at national level by law no. 300/2006. the actions of the anti-trafficking structures that target the punishment and the condemnation of the traffickers of persons, refer to the penal code, art. 182, art. 210, through which numerous organized criminal groups are destroyed and very high penalties are applied by the courts. 3.1. the visions of the national agency against trafficking in persons vs. the vision of the u.s. embassy in romania on anti-trafficking actions "the national agency against trafficking in persons evaluates and monitors, at national level, the activity carried out in the field of the fight against trafficking in human beings by public institutions and non-governmental organizations, fulfilling the role of national rapporteur". the national mechanism for identification and referral (mnir) is a formal framework for cooperation, based on which governmental institutions and intergovernmental organizations fulfill the tasks assigned to protect and promote the rights of victims of trafficking in persons, uniting their efforts in strategic partnership with civil society. mnir through the institution of the national rapporteur (national agency against trafficking in persons) records any victim or presumed victim referred to him by one of the institutions or organizations that have responsibilities in applying order no. 335 of october 29, 2007 for the approval of the national mechanism for identification and referral of victims of human trafficking. also, mnir records the data on persons, victims or suspected victims of human trafficking, which are referred by institutions and organizations outside the country. the goals of the mnir involve ensuring that the rights of victims of human trafficking are respected, as well as the implementation of effective victim referral procedures, institutions offering specialized protection and assistance services, as well as monitoring the quality of the services provided. the analysis carried out by anitp, both on the basis of their own statistical data, as well as by using the data and information made available by other law enforcement institutions, highlights an overview, doubled by a nuanced presentation, regarding vulnerabilities and the particularities of victims of human trafficking, registered in 2018, in the mnir. the analysis reflects the fact that, compared to past years, the characteristics that define the victims of human trafficking for 2018, remain unchanged from previous years. it is noted that the mechanisms for identifying victims exploited in the country are much more under the control of national institutions. it was found that significant difficulties arise in identifying victims, romanian citizens, but especially in the transnational referral, by authorities or organizations in the countries of exploitation. it was observed that the multiannual evolution of the size of the identified victim population retains the general trend registered during the last 11 years. the statistical data in the mnir indicate a decrease in the number of registered victims, in 2018, (from 662 victims, identified in 2017, to 497, in 2018). the data reflect a tendency recorded in the dynamics of the phenomenon of victimization through human trafficking, in a relevant period of time, over 10 years. it is appreciated that the decrease in the number of victims represents the multiplied result of the efforts of the authorities and civil society, over the last decade. it is appreciated that in order to be effective in the fight against trafficking in human beings, the correlated efforts of the authorities of the countries of origin with those of the countries where the exploitation takes place are crucial. it is important for romania to promote and implement demand reduction policies, in parallel with those aimed at reducing supply, in developing policies to reduce the phenomenon of human trafficking in the countries of exploitation. this aspect, well grounded in eu directive 36 of 2011, must be assumed by both the source countries of victims of trafficking in human beings and by the countries of 5 exploitation. romania mobilizes important human and financial resources necessary for the protection and assistance of victims of human trafficking, as well as for the prosecution and punishment of traffickers. the results of the actions taken by the state institutions are reflected on two levels, that of the action of the law enforcement authorities and that of the integrated interventions of the authorities, ong, as well as other institutions or organizations responsible for assisting victims. the actions of the anti-trafficking structures, from 2001 until now, are reflected in thousands of convictions, hundreds of organized criminal groups destroyed and very large penalties applied by the courts. in this regard, the us embassy in romania argues that "the split system of case reporting has affected the efficiency of the police and the coordination with the investigations and the criminal prosecution", "the authorities have accused the suspects of human trafficking for other crimes. , such as pimping ”,“ (29%) of the convicted traffickers received suspended sentences; the rest of the traffickers received penalties with imprisonment between 1 and 10 years ”,“ the lack of prioritization of human trafficking, widespread corruption and major legal and judicial reforms prevented the effective application of the law. observers reported corruption endemic and supposed complicity in human trafficking offenses of government officials, especially officials who exploited minors in state placement centers and acted in complicity with traffickers "," the small number of dedicated financial investigators prevented investigations financial and unavailability of assets, blocking the collection of evidence in cases of trafficking in human beings to corroborate the statements of witnesses, "a new law that reduces prison sentences for prisoners in improper conditions has led to the early release from prison of more than 500 convicted traffickers during the period covered by the report, "the judges did not treat prostitution and trafficking for sexual exploitation as different offenses, which had negative effects on the penalties imposed on the offenders and on the compensation granted to the victims", "although they mostly used funds in the donations for the training of police officers and prosecutors, the authorities organized, during the period covered by the report, a series of training programs on the topic of combating trafficking in human beings, for 25 members of the border police, ”the police especially from rural and rural areas. from small cities they are not aware of the potential for exploitation through prostitution, which has led to the identification of the signs of the use of force, fraud and coercion on persons who practice prostitution, including minors, “many police officers and judges lack the specialized training and sensitivity required in cases of trafficking in persons for the purpose of sexual exploitation and in matters relating to trafficking in persons, including a basic understanding of trafficking in human beings ” [11]. the priority recommendations for romania presented by the us embassy, on human trafficking (2019) are: according to the legislation in force, it is desired resolution in investigation as well as criminal prosecution in cases of trafficking in persons and punishment of traffickers with prison. it is necessary to extend the efforts of investigation, prosecution and conviction of the civil servants accomplices to acts of human trafficking as well as obtaining sufficiently severe sentences, corresponding to the gravity of the crime committed. increase the number of police officers investigating human trafficking offenses but also the number of financial investigators specialized in human trafficking cases. participation in professional development programs for police officers for working with victims, gathering evidence of human trafficking and understanding the phenomenon of psychological constraint. amend the legislation to allow the authorities to sanction the recruitment agencies for crimes related to trafficking in human beings. 6 in order to raise awareness of trafficking in human beings and to understand all forms of trafficking, it is necessary to increase the efforts of training of the officials involved in the judicial procedures especially of the judges, in order to professionally approach the cases of human trafficking and working with the victims. application of the national strategy and the national action plan 2018-2022 as well as the allocation of adequate financial resources. 3.2. the visions of the national agency against trafficking in persons vs. the vision of the u.s. embassy in romania on the indentification, protection and assistance on the victims. regarding the second register: identification, protection and assistance of victims, the first formal instrument was designed to identify victims of human trafficking and their referral (2007), with the purpose of adopting a common and integrated response, by all institutions and organizations involved in the identification, protection and assistance of victims, regardless of the institution or organization they came into contact, for the first time nmirv(national mechanism for the identification and referral of victims), a tool that has been refined and adapted throughout time through various tools, proposed by specialists who have encountered certain deficient situations. also, procedures were developed and introduced regarding the risk assessment and the special needs of assistance and protection of the victims, procedures regarding the assisted voluntary repatriation. at the same time, the procedure for granting the recovery and reflection period (90 days) was regulated, but there were also improved procedures or already existing aspects, which we mention the identification procedure or the indicators of identification of victims of human trafficking. tools were created to implement the processes described in the procedures, clarifications and standardization of some notions such as the potential victim, the presumed victim, the identified victim, the detection or identification of the victim of human trafficking, as well as establishing clear tasks in the responsiveness of the various institutions were required in the fight against trafficking. it is worth mentioning that no legal conditioning of the protection and assistance of the victims is established, which will be determined by the time or by the participation of the victims in the criminal process or by their collaboration with the judicial authorities. the protection services for recovery and reintegration are planned being provided on the basis of an individualized and integrated assistance plan made with the participation of the victim, periodically re-evaluated and permanently adapted according to the evolution of the victims situation and the way of meeting the set objectives. this plan is followed by a team of specialists involved, until the end of the case, with the participation and consent of the victim. it is also encouraged the participation of the victims in the judicial proceedings, by granting a period of recovery and reflection of up to 90 days, either by allowing them to recover, either to avoid the influence of the traffickers or to make a decision in knowledge of the case regarding the cooperation with the competent authorities.in this period of recovery and reflection the victims are counseled from the psychological point of view, from the point of view of social assistance, but also with regard to the applicable judicial and administrative procedures. according to the national agency against trafficking in persons, in 2018, the actions for the prevention of trafficking in human beings followed the national strategic documents (snitp 2018 2022, the national action plan 2018-2020 for the implementation of snitp 2018 2022, the national strategy for order and safety publishes 2015-2020 etc). most of the preventive actions of anitp were carried out in cooperation with institutions and organizations involved in the fight against trafficking in human beings. preventive campaigns were initiated and implemented together with institutional and non-governmental partners, all campaigns being adapted to the local and regional traffic specificity, but also to the different 7 types of exploitation and taking into account the particularities of the target groups of the antitrafficking message. regarding these issues, the us embassy in romania argues that: “the romanian government has reduced its efforts to protect victims of trafficking in human persons… civil servants and ong have identified 497 victims in 2018, the smallest number in 2018 the last 10 years, decreasing from 662 victims identified in 2017 "," as in previous years, less than half of the victims received assistance "," observers also reported that the authorities have penalited the persons involved in activities of prostitution, even if they were minors, without looking for indications of human trafficking ”,“ the permanent problems of the abuse and neglect of institutionalized children and the lack of early identification in the state institutions put the children in the placement centers in danger of becoming victims of trafficking "," the lack of government funds for ong assistance and protection services was still a problem "," the law provides for psychological and medical care for all victims ... the government did not offer more than one psychological counseling meeting and did not cover the cost of medical services. the ong paid the cost of all psychological services to the victims, as a result of the government's refusal to pay the psychologists who provided assistance to the victims and the cost of all emergency medical services, because the government did not provide financial assistance and the payment of medical services was made on the spot. … in order to have access to medical care, the victims in romania had to return to their home town in order to obtain identity documents” [11]. the priority recommendations of the us embassy for romania regarding human trafficking (2019) are [11]: a competent training of police officers and labor inspectors in order to recognize the indications of exploitation in such a way as to preventively identify potential victims, especially from the vulnerable population such as children from state placement centers, migrants and asylum seekers, persons involved in prostitution activities. according of psychological counseling to high professional standards and facilitating the access of victims to medical care. creating a formal mechanism for managing the funds and providing financial support to ong-s for victim services. in order to protect witnesses from reprisals and stigmatization and to encourage more victims to get involved in prosecution, it is requested that the names of all victims who testify at lawsuits for protection are not published. -the granting of protection in court and appropriate legal advice to the victims who attend the prosecution. in order to include a minimization of the judicial fees and an increase of the efforts to compensate victims, it is requested to review the retrocession mechanism. 4. conclusions conclusions of the us embassy for romania, on trafficking in human beings: "the romanian government does not fully meet the minimum standards for the elimination of trafficking in human beings, but it makes significant efforts in this regard" ... (priority recommendations of the us embassy for romania, regarding trafficking in human beings) (2019). the conclusions of the article refer to the improvement of the legislation, the extension of the monitoring system of the trafficked victims, also reiterating the need to increase the preventive measures and to increase the quality of the services offered. the less time the victims spend in human traffic, the more easily they are therapeutically approachable, the occurrence of mental disorders or very serious physical traumas is delayed and the easier the recovery and social reintegration becomes. 8 the romanian society of the present day places great emphasis on the material side, on the money. people, generally looking for resources, wealth, average survival, want to, with a minimum of effort, achieve the maximum result. i believe that this principle can also be applied in the above statement. thus, people want to gain legal or illegal financial benefits with minimal involvement. victims, most of the time, out of school, abused, vulnerable do not have the capacity to discern between reality and imagination. they fail to believe their own destiny in romania and choose to go abroad for the most part, not informing themselves in any way or putting their life in the hands of a person known for a short time or at all. also the traffickers have observed that they can obtain material advantages from the exploitation of other people, without manifesting any human feeling, the victims becoming objects (products) of consumption, with a view to the rapid enrichment of the traffickers. i think that today's society presents a moral crisis, which makes people no longer have any moral brake. this moral crisis manifests itself at the level of all stages of the romanian society. this can be explained by the fact that a state placement director from a city in the south of romania trafficked children in care, or officials who exploited minors in state placement centers and acted in complicity with traffickers. thus can be explained the endemic corruption and the alleged complicity in human trafficking offenses of government officials. in fact, people have forgotten that "work is an opportunity to give me something, to express myself and to achieve it"[13]. i also believe that education is needed for the development of a people, which is transforming children today, into tomorrow's adults. if today we have responsible, conscientious, persevering and correct children, tomorrow's adults will be the same. i believe that every citizen of this country can contribute in its own way to the creation of a prosperous and modern society, through involvement, proactivity, responsibility, professionalism and the promotion of values. references [1] https://lege5.ro/gratuit/gezdmnrzgi/art-182-exploatarea-unei-persoane-codul-penal; [2] constituția româniei, editura meteorrpress, 2019 [3] legea nr. 678/2001 pentru prevenirea și combaterea traficului de persoane, cu modificările și completările ulterioare; [4] hotărârea nr. 1.238 din 10 octombrie 2007 privind aprobarea standardelor naţionale specifice pentru serviciile specializate de asistenţă şi protecţie a victimelor traficului de persoane; [5] legea nr. 211/2004 privind unele măsuri pentru asigurarea protecţiei victimelor infracţiunilor; [6] legea nr. 677/2001 pentru protecţia persoanelor cu privire la prelucrarea datelor cu caracter personal şi libera circulaţie a acestor date; [7] legea nr 565/2002 pentru ratificarea convenției națiunilor unite împotriva criminalității transnaționale organizate, a protocolului privind prevenirea, reprimarea și pedepsirea traficului de persoane, în special al femeilor și copiilor, adițional la convenția națiunilor unite împotriva criminalității transnaționale organizate, precum și a protocolului împotriva traficului ilegal de migranți pe calea terestră, a aerului și pe mare, adițional la convenția națiunilor unite împotriva criminalității transnaționale organizate, adoptate la new york la 15 noiembrie 2000; [8] legea nr. 300 din 11 iulie 2006 pentru ratificarea conventiei consiliului europei privind lupta împotriva traficului de fiinte umane, adoptata la 3 mai 2005, deschisa spre semnare si semnata de românia la varsovia la 16 mai 2005; [9] ordinul nr. 335 din 29 octombrie 2007 pentru aprobarea mecanismului national de identificare și referire a victimelor traficului de persoane; [10] directiva 2011/36/ue a parlamentului european și a consiliului din 5 aprilie 2011 privind prevenirea și combaterea traficului de persoane și protejarea victimelor acestuia, precum și de înlocuire a deciziei-cadru 2002/629/jai a consiliului; [11] https://ro.usembassy.gov/ro/raportul-privind-traficul-de-persoane-2019 [12] http://anitp.mai.gov.ro//ro/docs/studii/raport%20national%202018.pdf [13] torrabadella p, inteligența emoțională la locul de muncă, editura allfa, 2009 https://lege5.ro/gratuit/gezdmnrzgi/art-182-exploatarea-unei-persoane-codul-penal?dp=gqytsojuguytq http://anitp.mai.gov.ro/ro/docs/studii/raport%20national%202018.pdf agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 115-125 115 the digital leadership behaviours of x, y, z generation nurses in the delivery of health services s. üstgörül, b. akkaya sema üstgörül¹, bulent akkaya² ¹ faculty of health sciences, manisa celal bayar university, turkey (orcid.org/ 0000-00028163-726x), e-mail: sema84car@hotmail.com ² ahmetli vhs, manisa celal bayar university, turkey (orcid.org/ 0000-0003-1252-9334) abstract. younger nurses are more active and agile in nursing leadership comparing to as senior nurses are about to retirement. digital era and technology forces nurses to be more dynamic and adaptive. thus, they try to behave as digital leaders. the aim of this study to link the relationship between young digital nurse leaders’ organizational resilience and commitment in hospitals. to test this relationship, the data were collected from nurses in three groups: x, y and z generation. the data were collected by four scales and analysed by spss program. the results show that digital leadership has a positive effect on both organizational resilience and organizational commitment. moreover, organizational resilience and organizational commitment is positively correlated. the young nurses have more digital leadership skills and behaviours comparing senior ones. but the perception of organizational resilience and commitment of the x generation nurses was higher than the y and z generations. the results of this study may guide to the managers of healthcare organization to pay attention young nurses in adapting technology and guide to senior nurses through applying digital leadership behaviours. keywords: nurses, x, y and z generation, digital leadership, organizational resilience, organizational commitment introduction in today's competitive environment brought by globalization, the expectations and wishes of managers and employees have led to the emergence of new approaches in the field of leadership. one of them is digital leadership that provides active use of technology. digital leaders are people who know technology well and are open to continuous learning, apply digital, reflect on company goals and business results in the most positive way, and combine strategy, culture, communication, technology and data to achieve all these (eberl & drews, 2021). it will certainly be digital leaders who lead and drive transformation in the new digital age. this understanding, which proceeds with the power of persuasion, attaches importance to continuous communication and dialogue, accepts change, can shape its business strategy accordingly, is fed from an agile, inclusive and egalitarian culture based on cooperation rather than hierarchies, and is accountable in the most transparent way when necessary, will also provide important developments in the field of health care (lapão, 2020). cross generational work stress puts high-risk employment environments in healthcare organizations and hospitals. this causes decreasing productivity and negative organizational climate. there are x, y, and z generations in almost all organizations as in hospitals and mailto:sema84car@hotmail.com the digital leadership behaviours of x, y, z generation nurses in the delivery of health services 116 healthcare organizations. researches shows that perceived behaviours across generations contribute to misunderstanding and conflict (kaifi et al., 2012; paros et al., 2022; easton & steyn, 2022). intergenerational, conflict in the health care context is exacerbated by the promotion of younger nurses to leadership positions, requiring them to oversee senior and more experienced nurses. because nurses serve in a high dynamic environment due to technology and industry 4.0. day by day they need to learn new technology and adapt them to sustain their work quality and the hospital they serve in. i. theoretical background and literature digital leadership theory sees technological learning as part of a social transfer, in which corporate practices are taught to new members through selective reinforcement. for this reason, nursing is a profession that requires manager and leader nurses, student nurses and nurses who have just started their profession, to learn and direct them in hospital environments (mthiyane & habedi, 2018). therefore, nurses new to the profession and student nurses learn high-quality digital nursing skills with the help of supplements such as clinical supervision, post-clinical conferences, and clinical training. the continuous implementation of technological innovations with digital leadership capabilities (massaro, 2021) is crucial for the development of many organizations, including those in the healthcare industry, during the covid-19 pandemic and future health crises (basile et.al, 2022; drago et.al, 2021). as a result of technological innovations in the healthcare industry, robotic medical devices are widely applied to provide many types of medical services, including monitoring patients, performing surgeries, and managing vital functions such as nursing care (guntur et al., 2019). nurses with high digital knowledge who will provide these services, manage technology and adapt the changes in technology to health institutions are more needed today. these can be expressed as young and dynamic nurses with digital leadership characteristics. in other words, generation z can be defined as a nurse. constantly and rapidly changing technology reveals sharp differences in knowledge, perception and management between generations. in this context, the aim of this study is to determine the digital leadership perceptions of x, y, z generations nurses in the digital age and to examine the relationship between these digital leadership perceptions, implicit resilience and commitment. i.1. the link between digital leadership, organizational resilience and commitment organizational commitment is defined as the desire of employees to stay in the organization, their identification with all the effectiveness and success of the organization, the loyalty and attitude of the employee to the organization, and the interest shown in order for the organization to be successful (yiing & ahmad, 2009). in this context, organizational resilience and agility are important concepts for nurses to serve to adapt to technology and hospital environment. moreover, despite the intense job stress, this adaptability can only be overcome by highly resilient nurses. the concept of digital leadership is an important variable for nurses' organizational commitment and resilience. due to the critical role digital technologies play in patient care, their use in nursing practices is increasing. in general, nurses recognize the significant benefits such sema üstgörül, bulent akkaya 117 technologies provide for patients and their families. these range from timely assessment information to patient monitoring, family information to nurses' workload and working conditions. for example, digital technologies can offer opportunities to tackle current problems and challenges in the healthcare industry. many healthcare systems are facing challenges due to the lack of skilled nurses with technology knowledge and the growing demand for long-term care. because x and y generations may be insufficient in adapting to this technology, managing it and transferring it to other people. therefore, generation z nurses born into the world of technology play a critical role in this process. in this process, having only digital leadership knowledge and behaviors is often not enough. at the same time, nurses' organizational resilience and organizational commitment should be high in order to ensure the sustainability of institutions and hospitals. so which generation of nurse can provide this? x? y? or is it z? this research will have a unique value in answering these questions not explained in the literature and will contribute to the literature by testing the following hypotheses. i.2. research model and hypotheses figure 1. research model hypotheses h1: digital leadership impacts organizational commitment in healthcare organizations. h2: digital leadership impacts organizational resilience in healthcare organizations. h3: organizational commitment relates with organizational resilience in healthcare organizations. ii. methodology ii.1. population and sample data were collected from 136 nurses of turkish healthcare organizations by three different scales. the questionnaire had 4 sections: the first section was regarding sample characteristics of the participants, such as gender, age, level of education, etc. the second scale was about digital leadership organizational resilience organizational commitment the digital leadership behaviours of x, y, z generation nurses in the delivery of health services 118 digital leadership developed by zeike et al. (2019) and adapted to turkish by sürücü e al. (2022). it included 6 statements. the third section is about organizational commitment developed by meyer et al. (1993) and adapted to turkish by bağcı & akbaş (2016). it consisted of 15 statements. the forth scale is organizational agility developed by sharifi & zhang (1999) and adapted to turkish by akkaya & tabak (2018). it consisted of 15 statements. the tool for collecting data was chosen to be a five-point likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). characteristics of participants are as follows: 77.9% (106) of respondents was female while 22.1% (30) was male. 67.6% (92) of the respondents was graduated from health vocational high school, the rest were graduated from other high schools (32.4%). moreover, we asked their current education level. 82.4% (112) had bachelor’s degrees, while 17.6%(24) had a master’s or ph.d. degree. 37.5% (51) participants was z generation that means they were born between 1996-2015, 40.4% (55) participants was y generation that means they were born between 1980-1995 while 22.1% (30) participants was x generation that means they were born before 1980s. ii.2. statistical analysis the analysis was executed using structural equation modelling with the spss 26 program. before testing hypotheses, we checked data normal distribution and reliability analysis. cronbach alpha (α) was used to measure internal consistency for reliability and the skewness and kurtosis were used to check the data normality distribution. cronbach alpha was found higher than 0.70 for each scale that showed the data is high reliable. the skewness and kurtosis values should be between +2 and -2 that presents data has normal distribution (george, 2011). table 1 presents the skewness and kurtosis has normal distribution. thus, we applied parametric analysis methods such as regression, anova and correlation in current research. table 1. normal distribution analysis (n=136) scale min. max. mean std. d. (α) skewness kurtosis statistics se statistics se p value digital leadership 1.00 5.0 3.84 0.48 0.92 -0.108 0.21 0.439 0.43 0.183 organizational commitment 1.00 5.00 3.16 0.86 0.93 0.719 0.21 0.906 0.43 0.256 organizational resilience 1.00 5.00 3.86 0.85 0.93 0.326 0.21 -0.455 0.43 0.192 sema üstgörül, bulent akkaya 119 iii. results characteristics of participants are as follows: the mean of age is 28.4; 40.9% (192) of the respondents were above 28 years, while 59.1% (277) were less than 28 years. 64.4% (302) of respondents were female, 35.6% (167) identified themselves as male. 39.0% (183) had high school degrees, 43.9% (206) had bachelor’s degrees, while 17.1% had a master’s or ph.d. degree. r value showing the positive and significant relationship between digital leadership and organizational commitment is 0.607. it can be stated that 36% (r2) of organizational commitment depends on digital leadership behaviours. in other words, there is a positive and significant relationship between digital leadership and organizational commitments (p<0.001) (table 2). thus, hypothesis 1(h1) is supported (digital leadership impacts organizational commitment in healthcare organizations). table 2 : model summary mod el r r square adjust ed r square std. error of the estimate change statistics t value f value df 1 df 2 sig . 1 ,60 7a ,36 8 ,364 ,6891 5 8,83 8 78,11 1 1 13 4 ,00 0 a. predictors: (constant), digital leadership r value between digital leadership and organizational resilience is 0.607. it can be stated that 61% (r2) of organizational resilience depends on digital leadership behaviours. in other words, regression test proved that there is a positive and significant relationship between digital leadership and organizational resilience (p<0.001) (table 3). thus, hypothesis 2 (h2) is also supported (digital leadership impacts organizational resilience in healthcare organizations). table 3: model summary mod el r r square adjust ed r square std. error of the estimate change statistics t value f value df 1 df 2 si g. 1 ,78 1a ,61 0 ,607 ,680 24 14,4 75 209,5 14 1 13 4 ,00 0 a. predictors: (constant), digital leadership we also applied pearson correlation to test the relationship between both independent (digital leadership) and dependents variables (organizational commitment and organizational the digital leadership behaviours of x, y, z generation nurses in the delivery of health services 120 resilience). the findings of the study indicate that the digital leadership outcome has a strong positive correlation with organizational resilience (r=781; p=.000) and organizational commitment (r=607; p=.000). organizational resilience has a positive correlation with organizational commitments (r=345; p=.000). this correlation supports hypothesis 3 (h3): organizational commitment correlates with organizational resilience in healthcare organizations. table 4. correlations variables digital leadership organizational commitment organizational resilience digital leadership pearson correlation 1 sig. (2-tailed) n 136 organizational commitment pearson correlation ,607** 1 sig. (2-tailed) 0 n 136 136 organizational resilience pearson correlation ,781** ,345** 1 sig. (2-tailed) 0 0 n 136 136 136 correlation is significant at the 0.01 level (2-tailed). we applied anova post hoc test to compare generations (x, y, z) perceived digital leadership organizational resilience and organizational commitment. as seen on table 5, the model is significant(p=.000). in other words, digital leadership has a positive and significant impact on the organizational commitment and organizational resilience. table 5. anova sum of squares df mean square f sig. organizational commitment between groups 63,680 44 1,447 3,554 ,000 within groups 37,058 91 ,407 total 100,738 135 organizational resilience between groups 117,858 44 2,679 5,932 ,000 within groups 41,093 91 ,452 total 158,951 135 sema üstgörül, bulent akkaya 121 post hoc test showed that the digital leadership mean scores were higher in the z generation than the x generation (p=0.025); however, there was no statistically significant difference between "x and y generation" and "y and z generation" (p>0.05). while the mean of organizational resilience scores was higher in the x generation than in the y generation (p=0.016); however, there was no statistically significant difference between "x and z generation" and "y and z generation" (p>0.05). the mean of organizational commitment scores was higher in the x generation than in the z generation (p=0.011); however, there was no statistically significant difference between “x and y generation” and “y and z generation” (p>0.05). table 5: multiple comparisons bonferroni dependent variable (i) generation (j) generation mean difference (i-j) std. error sig. 95% confidence interval lower bound upper bound digital leadership y x ,168 ,218 1,000 -,36 ,70 z -,524 ,254 ,124 -1,14 ,09 z y ,524 ,254 ,124 -,09 1,14 x ,692* ,258 ,025 ,07 1,32 x y -,168 ,218 1,000 -,70 ,36 z -,692* ,258 ,025 -1,32 -,07 organizational resilience y z -,111 ,213 1,000 -,63 ,40 x -,703* ,248 ,016 -1,31 -,10 z y ,111 ,213 1,000 -,40 ,63 x -,592 ,252 ,060 -1,20 ,02 x y ,703* ,248 ,016 ,10 1,31 z ,592 ,252 ,060 -,02 1,20 organizational commitment y z ,471 ,211 ,082 -,04 ,98 x -,267 ,246 ,842 -,86 ,33 z y -,471 ,211 ,082 -,98 ,04 x -,737* ,250 ,011 -1,34 -,13 x y ,267 ,246 ,842 -,33 ,86 z ,737* ,250 ,011 ,13 1,34 *. the mean difference is significant at the 0.05 level. conclusions one of the most important factors that lead a company or firm to success is to have a successful and digital leader in digital age during industry 4.0. although leadership is a concept that is in our lives, digital leadership is a concept that has recently come to the fore and wondered. digitalization has a positive effect on the individual performance of the personnel the digital leadership behaviours of x, y, z generation nurses in the delivery of health services 122 by increasing the quality of business life, increasing the speed of work of the personnel, completing the tasks on time, reducing the rate of mistakes made in the works and ultimately affecting the motivation of the personnel. the presence of digital leaders in companies in the digitalization process also increases the individual performance of employees (benitez et al., 2022; abbasov & tolay, 2021). in literature, researches from the perspective of leadership and digitalism is generally related to organizational commitment and resilience in the field of health. for example, the innovative leadership practices are more conducive innovative work behaviour and work performance of the company (purwonta et al., 2020; zuraik & kelly, 2019; asbari et al., 2019). the more positive the employee’s innovation practices are, the better employee's performance and organizational commitment will be. these findings are similar to our research result. and there are some other studies that support the result of current research, for instance, it has been found that transformational and digital leadership styles affect the performance of the organization positively and significantly (madanchian et al., 2020; al khajeh, 2019). the organizational commitment is higher in organizations with digital competence (yu & moon, 2021). cho, et al., (2019) found that transformational leadership increases organizational commitment, puliwarna et al., (2023) found that digital competence has direct positive and significant effect on organization performance. hack-polay et al. (2022) conducted research on guiding flexibility in nursing practice and examined the impact of digital innovations and enhanced emotional education on nursing competencies. they found that nurses could develop more outstanding modern capabilities with exposure to increasingly used technologies in the healthcare sector. ai and digital technology and health-related engineering equipment can help reduce stress in the profession. therefore, technology is not a threat. it is a necessary complement that can upskill nurses. health literacy, in particular, plays an important role in the delivery of health services by nurses. this is closely related to the digital leadership behaviours of nurses. the more effective the digital leadership behaviours are, the higher the sexual health and literacy levels will be. this is also important in the distribution of health services (üstgörül, 2022). lapão (2020) emphasized the importance of combining digital health with the leadership of nurses. a positive relationship was observed between transformational leadership and organizational commitment. in local literature, there are some studies supports the results of current research. aymaz (2014) found the positive the relationship between the perception of leadership behaviours and organizational commitment of nurses. yağız (2022), on the other hand, examined the relationship between the behaviours of nurses in the pandemic process and their organizational resilience, and resulted the positive relationship between those variables. canpolat (2012) evaluated the leadership and organizational commitment of nurses. as seen in literature, there are different studies in the literature for organizational resilience, digital leadership and organizational commitment. however, the relationship between organizational resilience and organizational commitment, which defines nurses' digital leadership characteristics, has not been studied yet. this provides the originality of current research. for this reason, it is necessary to conduct research on the effects of organizational resilience and organizational commitment for nurses operating and working in sema üstgörül, bulent akkaya 123 the digital age. therefore, we examined the relationship between digital leadership, organizational resilience and organizational commitment of the perception of x, y and z generation nurses. the results show that digital leadership has a positive effect on both organizational resilience and organizational commitment. moreover, organizational resilience and organizational commitment is positively correlated. the young nurses have more digital leadership skills and behaviours comparing senior ones. but the perception of organizational resilience and commitment of the x generation nurses was higher than the y and z generations. the results of this study may guide to the managers of healthcare organization to pay attention young nurses in adapting technology and guide to senior nurses through applying digital leadership behaviours. study limitations and future research the sample population at this academic research hospital in turkey did not represent the national nursing population. therefore, the study’s findings should be not generalized to the population. we reached just 136 nurses and analysed the data with parametric tests and a quantitate method. for future studies, here are several opportunities for more study on the issue of digital leadership among different generations of nurses. first, a deeper assessment of the linkages between leadership style and organizational commitment in the concept of x, y and z generations leadership in nursing would provide data that can help in new and digital leadership development programming. additional study employing a qualitative or mixed method should be undertaken to understand why digital leadership results in organizational commitment and resilience. finally, while this study investigated the links between digital leadership and organizational commitment and quiet, it may be applied to a large sample. references 1. abbasov, a., & tolay, e. 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(2019). digital leadership skills and associations with psychological well-being. international journal of environmental research and public health, 16(14), 2628-2641. 35. zuraik, a., & kelly, l. (2019). the role of ceo transformational leadership and innovation climate in exploration and exploitation. european journal of innovation management, 22(1): 84-104. medimond template 6 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 15 (2021) some issues on the correlation between wage income and labour productivity rica ivan1, călin tănase ladar2 1 faculty of electrical engineering and information technology, control systems engineering and management department, university of oradea, oradea, romania 2 faculty of environment protection, university of oradea, oradea, romania e-mails rika_ivan2005@yahoo.com, ladarcalin@yahoo.com abstract in romania, both the business environment stakeholders and the academics consider that the path on reaching the average level of development of the european union and implicitly the adoption of the euro currency, can be achieved only by improving the standard of living that is the citizens’ income, which can be reached only by increasing labour productivity. one of the objectives of the european union is to reduce the disparities between regions, as confirmed by the evolution of gdp/ capita in the less prosperous eastern europe countries in comparison with the more developed eu members states from western europe. there are a number of factors impacting the labour productivity and wage incomes, and the onset of the covid 19 pandemic has accelerated the adoption of automation, digitalisation and remote work, which will significantly contribute to the disappearance of less skilled jobs and the consolidation of those who are highly qualified ones, the latter being less sensitive to the adoption of new technologies. keywords: labour productivity, wage income, automation, pandemic, increased competitiveness, european union 1 introduction according to the national bank of romania, the relationship between the average gross wage and labour productivity marks two inextricably linked indicators. however, labour productivity is not the only factor that influences the dynamics of wage costs, the latter being also affected by the phase of the economic cycle, and how relaxed/ tightened the labour market is. according to nbr data, over the period 2009-2017 the average real wages increased by about 45%, while labour productivity increased by only 27%, urging caution in terms of wage increases. in order to join the euro area, in addition to other core economic indicators, romania must also reach a minimum level of real convergence of 75% of the eu average in terms of gdp per capita. romania’s per capita income gap is now much larger than the average of the top 10 eurozone members states, when compared to the income that portugal, slovakia or spain were facing with when they joined the euro area. therefore, in the absence of a per capita income close to the european average, romania cannot consider itself as being a developed economy, comparable to that of the euro area members states, and it remains part of the area of developing countries. in january 2021, the average gross wage in romania was 5,549 lei, that is an average net wage of 3,176 lei net. i.e. about 660 euros. a key factor in getting closer to the average level of development of the euro area member states is to increase competitiveness, i.e. productivity. however, capping the pace of wage growth in relation to the productivity rate increase leads to the continuation of the exodus of romania's labour force to developed economies, which, in turn, leads to a slowdown in economic development. mailto:rika_ivan2005@yahoo.com mailto:ladarcalin@yahoo.com 7 the salary level in a company depends on several factors such as: the size of the company, the economic sector in which it operates, whether it is a national or a multinational company, the relationship between labour supply and demand in that economic sector, its position on the market and its market share, the profitability of the business field, the employee's salary history, and, last but not least, labour productivity. the tremendous differences between wages paid within the developed countries when compared to the developing countries, such as romania, are not caused as much by differences in productivity rate per capita as by other factors such as immigration control. if free movement of labour was total, most workers in developed countries would be replaced by workers in developing countries, who would accept lower wages. in 2019, a bus driver in romania was paid on average net wage of about 3,000 lei net i.e. about 630 euros. in the same year, his peer in sweden was paid at least 34,000 sek i.e. about 3,200 euros. in other words, the swedish driver is paid more than 5 times more than his romanian peer, which is not related to a productivity more than 5 times higher. in order to build a truly fair society, the myth that a person is paid according to his personal worth cannot be accepted (chang ha, 2011). even in those sectors of developed economies where employees are truly more productive than their peers working in the economies of the developing countries, their high(er) productivity is largely due to the system, organizational structure of companies and not to individuals themselves. the productivity of these employees is due to the fact that they live in economies with superior technologies, better organized companies, better institutions, and with a more developed infrastructure, all these being factors that have been achieved in time, over generations. according to the data published by the oecd in 2019 and having 2010 as reference year, romania recorded almost the highest rate of increase in labour productivity per hour among all the 43 countries reviewed, reaching in 2019 to a ratio of 140.3 compared to 2010, being the second best after ireland (142.4), while the poorest performers were greece (93.0), luxembourg (100.8) and italy (101.2). according to the data presented in the “ziarul financiar” newspaper romania had the fastest increase in wage income over the period 20132018, as well as one of the largest increases in terms of labour productivity rates in the european union, but the share of value added that was transferred to labour factor was small. the business model of keeping labour costs low, especially below the level of labour productivity growth, especially in central and eastern european countries which was imposed by foreign investors has reached its limits. economic growth, as a consequence of increasing labour productivity in an economy, is directly proportional to the production and consumption of resources, which inevitably affects the environment. thus, societies need to rethink the economic model on which they rely on with a focus on sustainable and environmentally friendly growth, while improving the quality of people’s lives. 2 main productivity concepts used the oecd uses the concept of labour productivity in terms of gdp per hour worked as a basic indicator for calculating labour productivity. this concept measures the efficiency of the labour factor combined with other factors of production used in the production process. thus, labour productivity only partially reflects the capacity of workers or the intensity of their effort, and it depends on other factors such as invested capital, technological or organizational changes, economies of scale, etc. another concept used is total factor productivity (tfp), which refers to how efficient and intense the inputs used in the production process are. the increase in this type of productivity is the result of technological improvements and innovations adopted over time. technological 8 progress is inversely proportional to the labour factor, in the sense that an increase of technological progress leads to a decrease in the amount of labour incorporated. according to eurostat, labour productivity measures the amount of goods made and services performed by each person that is labour factor or the output/ input ratio of labour. in the case of structural indicators, labour productivity can be measured by multiplying gross domestic product (gdp) by the number of people employed or the number of hours worked. productivity is influenced by several factors, among which the most important to mention are: efficiency, a factor that means the amount of goods/ services that can be obtained using a certain volume of production factors; technology, a factor that includes scientific outcomes, organizational techniques, quality of the new elements generated meaning the goods produced and services provided; decreasing real costs while maximizing profit; correlation with the current economic cycle since there are periods of productivity increase or slowdown, depending on the phases of the economic cycle. firms tailor their capital and labour force according to fluctuations in terms of demand. another factor is the standardization of production processes, in the sense that the comparison of different production processes may lead to finding the less efficient production processes. structuralism is a contemporary theory suggesting that wage growth demands drive up the inflation rate, and the pace of wage growth rising should be one percentage point above the rate of productivity growth in order to achieve an annual inflation rate of 2-3%, which is targeted by central banks. labour productivity may also be defined as the production obtained in relation to the labour force unit, which can consist in the number of hours worked, as well as in the number of employees. the variant that is based on the number of hours worked is the most used, being considered the most appropriate; at the opposite pole is the labour productivity related to the number of employees which is appreciated due to its simplicity, yet it does not consider the changes in the average time worked or the role of those workers who do not have the status of employees, but who can have an important contribution in the production process. the theory of wage income efficiency (galgóczi, 2017) considers that firms that adopt the model of paying their employees wages over the market level compared to those that believe that revenues should increase only with increasing labour productivity is a rational solution, since this model acts reversibly, first by increasing wage income leading to increased labour productivity and thus avoiding the trap of maintaining low wages. the efficiency in using labour does not depend strictly on the material conditions of production, but also on the quality of the labour force. nowadays, the workforce is subject to higher demands than in the past when more rudimentary production techniques were used. the technical progress determined the change of the weight of the effort from the physical side to the intellectual side, determining more accuracy in the lucrative activity. thus, the increased qualification has become an important condition for the efficient use of human resources. the skilled workforce generates a greater amount of production in the same unit of time than in the case of the less skilled labour force. there is a strong positive correlation between the level of professional training and labour productivity. the advent and development of computers has led to improved efficiency of employees, leading to an increase in demand for highly skilled labour, which has triggered increased wages for the latter compared to lowor unskilled employees. the impact of unequal income in relation to economic growth depends on a number of factors, including the initial level of income and the geographical distribution thereof within an area or region. urbanization degree influences economic growth depending on the level of 9 development of an economy and the initial distribution of income. while high levels of income inequality can be limiting factors in long-term economic growth, increasing income gaps as well as urban agglomerations. thus, many developing countries currently face a high share of low per capita income, but also high income, yet in a much lower share. there is no emphasis in the literature on the fact that economic growth and income inequality are not equal in an economic space and that the effects of income inequality on economic growth may differ depending on the geographical concentration of economic activity. it is important to consider both factors i.e. income inequality and urban agglomeration factors, as well as changes incurred in these factors within an economy, but also how these two factors interact with each other. in conclusion, the literature emphasizes that, in the short run, there is a positive correlation between income inequality and economic growth, but in the long run, this correlation tends to become negative. moreover, high levels of income inequality appear to negatively affect low-income countries compared to those with high incomes. employees working in larger cities are paid higher wages, a kind of urban wage premium (ehrlich m., overman h. 2020), because they make workers more productive. larger cities also tend to attract better-educated employees who are more productive and have higher earnings. consequently, gdp per capita is higher in these cities. labour productivity should not be mistaken with the total factor productivity, which excludes human impact and the physical accumulation of capital, focusing only on the contribution of new changes in technology and in business management (mckinsey global institute, 2021). according to recent studies (ilo, 2020), income inequality tends to be less predominant in countries where there are a large number of employees who benefit from collective labour agreements. 3 the impact of the covid19 pandemic on the correlation between income and labour productivity the onset of the covid 19 pandemic was an incentive factor for many companies to accelerate the use of technologies such as digitalisation and automation, which has led to increased productivity by replacing employees or increasing production per employee. prior to the covid 19 pandemic, productivity growth was not always correlated with wage growth. for example, in the us, the average wages increase was 19% below productivity growth as compared to year 2000. if the average wage of a us employee had increased in the same pace with the productivity, by 2020 it would have been approximately 9,000 usd/ year higher. the onset of the pandemic has triggered a dramatic drop in terms of consumption but also to an increase in savings, especially in the case of high-income households, as well as job losses, especially in the case of lower-income households. the analyses made by specialists show that approximately 60% of the productivity increase is due to firms that have applied measures to reduce labour costs as well as other production costs, such as, for instance, via automation. since these productivity gains are not used to generate new jobs and increase wage incomes, then there will be a growing gap between productivity and wage growth. trade automation and liberalization have profoundly altered the labour market in the developed economies, offering disproportionate benefits for highly qualified employees to the detriment of other employees. technological changes have reduced the demand for lowand middle-wage employees, who work, for example, on factory assembly lines, and have increased demand for highly-skilled employees who are also better paid. 10 according to recent studies (mckinsey, 2020), in europe, approximately 53 million jobs will be subject to the automation process, and a large part of the jobs that will be lost will be replaced by technology and health investments based jobs. the outbreak of the covid 19 pandemic has led to an increase in remote work, leading to increased productivity, by reducing costs related to office space, equipment and supplies, giving companies the opportunity to hire highly skilled workers who do not reside in the locality where the companies have their headquarters. however, remote work is not possible in all industries, such as agriculture or construction, and differs from one country to another, depending on the degree of digitalisation thereof. with regard to the ever-increasing implementation of technology and especially of artificial intelligence (ai), it is very likely that it will significantly contribute to loss of jobs involving low or medium skill levels, but without having a major impact on jobs requiring high qualification. these technology-related professional changes are more likely to occur, especially in cities with large urban agglomerations. automation and use of ai in economic processes causes a major increase in labour productivity, but also a decrease in the number of employees. however, these factors do not evenly influence the industries or jobs in one industry. for example, the table below presents the jobs with the highest and lowest productivity are not likely to be affected by automation in the coming years in europe are shown in the following table: jobs most likely to be influenced by automation and artificial intelligence jobs less likely to be influenced by automation and artificial intelligence mine, construction, manufacturing, and transportation workers teachers machine operators and assembly line workers medical and bioscience personnel, physicists, mathematicians, engineers office workers managers and personnel in the legislative and administrative field vehicle operators skilled agricultural workers source: nedelkoska and quintini (2018) highly qualified jobs imply the existence of problem-solving skills, and they are not characterized by routine tasks or require high communication skills, which makes it difficult to adopt automation. countries such as sweden, which have a significant share of its workforce employed in areas involving high skills, are less exposed at risk entailed by automation. job market in northern european countries is less sensitive to automation than those in eastern europe, mainly due to the way the work is organized within the same economic sectors and only to a lesser extent due to the structure of the economy. the changes generated by the automation and digitalisation trigger a tendency of polarization of the labour market, in the sense of increasing inequalities; currently one finds that a greater focus is put on investments related to increased digitalisation and less on investments related to the qualification of manpower. 4 conclusions despite the fact that the gdp/ capita indicator is often used in comparing the level of development between different economic areas, given the high inequalities between the incomes of its inhabitants, gdp growth would only partially reflect the reduction of the poverty rate. the improvement of the living standard, of social welfare, the increase of the 11 labour productivity and implicitly of the national wealth, all of the above up determine the degree of development of an economy. in order to converge towards the level of developed countries in the european union, romania should focus on economic activities that involve creativity and innovation, an increased added value in the case of exports, which determines the existence of higher wage incomes, as against the current model which focuses on economic activities related to distribution, marketing, etc. which entail the presence of a less skilled labour force, lower wages and thus remaining caught in the poverty trap. in order to avoid the trap of low income capping and to achieve sustainable economic growth, romania needs to focus on at least four strands of action, namely: digitalisation, innovation, mitigating climate change, developing workforce skills and social inclusion. references [1] banca naţională a româniei (www.bnr.ro) [2] https://data.oecd.org/lprdty/gdp-per-hour-worked.htm [3] bērziņa s (2020), remote work – a forced experiment during the covid-19 era or a lasting value? https://www.macroeconomics.lv [4] brekelmans, s. and g. petropoulos. (2020) ‘occupational change, artificial intelligence and the geography of eu labour markets’, working paper 03/2020, bruegel [5] castells, vincente (2011), agglomeration, inequality and economic growth, research institute of applied economics, 2011/14 pp 40 [6] chang ha-joon (2011), 23 de lucruri care nu ti se spun despre capitalism, editura polirom, pp 41-48 [7] comisia europeană (2020), raportul de țară din 2020 privind românia, https://ec.europa.eu/ [8] dăianu d. & co (2017), românia și aderarea la zona euro: întrebarea este în ce condiții!, institutul european din romania, bucurești [9] ehrlich m., overman h. (2020), place-based policies and spatial disparities across european cities, centre for economic performance london school of economics and political science, cep discussion paper no 1726, pp 2 [10] galgóczi b (2017), why central and eastern europe needs a pay rise, european trade union institute, working paper 2017.01 [11] gereben a, wruuck p (2021), towards a new growth model in cesee: convergence and competitiveness through smart, green and inclusive investment, eib working paper 2021/01 [12] kolodko, grzegorz (2014), whither the world: the political economy of the future, palgrave macmillan, pp 209-240 [13] kohli ulrich (2015), explaining total factor productivity, university of geneva, www.business.unsw.edu.au [14] international labour office (2020), global wage report 2020–21: wages and minimum wages in the time of covid-19, ilo cataloguing in publication data, geneva [15] mckinsey global institute (2020), the future of work in europe. automation, workforce transitions, and the shifting geography of employment, www.mckinsey.com/mgi [16] mckinsey global institute (2021), the postpandemic economy. will productivity and growth return after the covid 19 crisis? www.mckinsey.com/mgi, pp 4-7 [17] mankiw n.g., (2015), principles of macroeconomics, cengage learning, pp 310 [18] mungiu-pupăzan m.c (2011)., productivitatea – modalitate de exprimare a performanţei şi eficienţei economice, analele universităţii “constantin brâncuşi” din târgu jiu, seria economie, nr.3./2011, p.124 [19] nedelkoska, l. and g. quintini (2018), automation, skills use and training, oecd social, employment and migration working papers no. 202, organisation for economic co-operation and development 12 [20] peterson institute for international economics (2021), how to fix economic inequality? mit press, pp 11-16 [21] taylor l., barbosa-filho n. (2021), inflation? it’s import prices and the labor share! institute for new economic thinking, working paper no. 145, pp 3-4 [22] https://playtech.ro/stiri/cat-castiga-un-sofer-de-autobuz-stb-si-de-ce-sunt-carati-pasagerii-precum-nistesaci-de-cartofi-29118 [23] https://www.thoughtco.com/total-factor-productivity-definition-1147262 [24] https://ec.europa.eu/eurostat/statistics-explained/index.php?title=glossary:labour_productivity [25] https://www.eea.europa.eu/publications/growth-without-economic-growth [26] https://www.zf.ro/profesii/fundatia-friedrich-ebert-romania-afla-primul-loc-ue-productivitate 12 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 16 (2022) value added tax on home purchases by individuals cornel silviu chiriac1, 1 faculty of economic sciences, agora university of oradea, oradea, romania e-mail silviu.chiriac@emantes.ro abstract starting from next year, the current system regarding value added tax for home purchases made by individuals will change. the change is made on the value ceilings of the transactions as well as on the number of transactions that can be carried out with the reduced vat rate. the work aims to highlight the changes brought by the government emergency ordinance no. 16 from 2022. keywords: purchasing houses, value added tax, reduced vat rate. 1. introduction ever since 2008, when the vat rate of 5% was introduced for the first time for homes delivered as part of the social policy, vat was one of the instruments used to encourage the real estate sector. the impact of investments in real estate developments is generally recognized as having a positive effect on the economy (and implicitly on budget revenues), but also on living conditions. as shown by the data published by eurostat at the end of last year, although an overwhelming number of romanians own privately owned homes, things do not look as good when we talk about the quality of living conditions, romania being the leader in the statistics on housing congestion and in last place in the eu when it comes to the size of the home. although the reduced vat rate for social housing has already been implemented for more than 14 years, the application criteria are in a continuous dynamic. the price ceiling of homes that can benefit from the 5% vat rate, as well as the number of purchases that can be made by one person have changed over time, currently there are even two such ceilings and the possibility of purchasing one or more houses depending on their price. 2. current provisions of the fiscal code in 2022, according to art. 291 para. 3 letter c) point 3 of the fiscal code as amended by geo no. 13/2021, the reduced vat rate of 5% is applied to the tax base for the following supplies of goods and services: the delivery of homes that have a useful surface of a maximum of 120 sqm., excluding household annexes, the value of which, including the land on which they are built, does not exceed the amount of 450,000 lei, excluding vat, purchased by individuals. the usable area of the house is defined by law no. 114/1996, republished, with subsequent amendments and additions. household annexes are those defined by law no. 50/1991 regarding the authorization of the execution of construction works, republished, with subsequent amendments and additions. the reduced rate applies only to homes that, at the time of sale, can be lived in as such; the delivery of homes that have a useful surface of a maximum of 120 sqm., excluding household annexes, the value of which, including the land on which they are built, exceeds the amount of 450,000 lei, but does not exceed the amount of 700,000 lei, excluding vat, purchased by persons individually or jointly with another person/s. the usable area of the house is defined by law no. 114/1996, republished, with subsequent amendments and additions. mailto:silviu 13 household annexes are those defined by law no. 50/1991, republished, with subsequent amendments and additions. the reduced rate applies only to homes that, at the time of delivery, can be lived in as such. any individual can purchase, starting from january 1., 2022, individually or jointly with another person/other persons, a single house whose value exceeds the amount of 450,000 lei, but does not exceed the amount of 700,000 lei, exclusively vat, with a reduced rate of 5%. the legislator's intention is to narrow the scope of the reduced rate of 5% to vat, lowering the upper price limit and imposing, generically, the purchase of a single house at a reduced price. taking into account the constant concern of the tax authorities, to maintain the social character of the reduced rate of 5% to vat, we can think that the existence of a higher ceiling, of 700,000 lei, for the purchase of a single house, as well as the possibility of purchasing more homes below 450,000 lei, are criteria that could favor investments in some cases and were not necessarily characteristic of the social policy in certain cases, on which the introduction of the reduced quota is based. the qualification of homes for the reduced rate of vat has been a topic of interest for both property developers and people interested in a new home over the years. thus, on the one hand, there is the signal of an increase in credit prices sent by the national bank of romania, by increasing the monetary policy interest rate above expectations, which could have the effect of tempering demand, and widening the scope of the reduced vat rate for the purchase of housing, which should lead to lower prices, at least in the segment targeted by this measure. on the other hand, inflationary pressures, tensions in the labor market, but also high demand call into question the direction of prices on this market in the coming period. returning to the increase in the ceiling for the application of the 5% vat rate, from 450,000 lei to 700,000 lei, it should be noted that the measure is applicable for a single purchase. in other words, any person, individually or in co-ownership with another person, can buy a single home with a 5% vat rate, if the purchase price is between 450,000 lei and 700,000 lei, excluding vat. it is not relevant if the mentioned person also bought housing with a reduced share in previous years, when the maximum ceiling was 450,000 lei. in order to keep track of these transactions, the authors of the law provided for the establishment of the register of housing purchases with a 5% vat rate, and its model was officially published at the beginning of february 2022. the register is completed and verified by public notaries on the date of authentication of salespurchase contracts that have as their object the transfer of property rights for homes with a reduced vat rate. it is completed both for homes with a value of less than 450,000 lei, without vat (in which case the number of purchases made is not relevant), and for those with a value between 450,000 lei and 700,000 lei, without vat (where the limitation applies on a single purchase). the tax relief offered in this price segment has the potential to boost purchases, both as a personal home and for investment purposes. here, however, the effect of the increase in the price of loans comes into play, which could affect demand, given that, in this price segment, mortgage financing is more present. but romania's case is not unique, similar situations can be found in most of the world's economies, in the real estate sector. on the other hand, in romania, the demand for housing has been on an upward trend for several years, and the supply is undersized, so it remains to be seen how the market will evolve in the next period. not infrequently in practice, buyers as well as sellers of residential real estate find themselves in the situation of having to obtain clarifications regarding the obligation to pay vat when purchasing or selling a home. 14 the situation can become quite complicated, especially in the case of future real estate transactions, when, as a rule, a preliminary contract is concluded between the parties, with the payment of the sale price in installments, in a foreign currency. although at the time of making the agreement of will regarding the bilateral promise of sale and purchase, the parties have in mind the legal provisions in fiscal matters regarding vat in force at the time of signing, often the numerous legislative changes that have occurred at short intervals in this field, the fluctuation of the currency exchange rate as well as the superficially drafted contractual clauses, create at the time of the actual sale, significant legal problems that can lead to the cancellation of commitments with the consequence of significant financial losses on both sides. therefore, it is good to know what risks we are subject to when we express our intention to buy or sell under conditions of vat taxation. a first condition that emerges from the fiscal regulation in question is that the person who buys a property that meets all the other conditions for the application of the reduced vat rate must be an individual. a second condition is for a buyer to purchase a single house at a price of more than 450,000 lei but less than 700,000 lei, and any price below 450,000 lei. the buyers will declare in front of the notaries that they meet the condition for buying the house with the 5% vat rate, and the declarations thus given will be kept by the sellers. the purchased home can be bought in exclusive ownership or in co-ownership. according to the legal provisions, sales of residential real estate are subject to taxation in the form of vat at a reduced rate. the notion of home is defined by art. 2 of law no. 114/1996 and consists of that construction made up of one or more living rooms, with the necessary dependencies, facilities and utilities, which satisfy the living requirements of a person or family. therefore, the sale of land without construction is not subject to the 5% vat rate. however, under the conditions provided by the fiscal code, these transactions may generate the obligation to pay the standard 19% vat rate. also, neither the sales of buildings with a destination other than housing, as defined in law no. 114/1996, does not benefit from the reduced vat rate. pursuant to art. 269 of the fiscal code, vat will be applied at the rate of 5%, to the sale of homes that have a useful surface of a maximum of 120 sqm., excluding household annexes. the law establishes that household annexes are those defined by law no. 50/1991 regarding the authorization of the execution of construction works, republished, with subsequent amendments and additions. the usable area referred to by the fiscal code is determined according to the housing law which establishes that it is represented by the sum of all the places (in a home) that can be used, furnished and arranged, regardless of whether it is a single plan or several. concretely, this includes: rooms (living room and bedrooms), bathrooms (with or without bathtub or shower), kitchen, all closed or open storage spaces and all transit areas – respectively hallways. the calculation of the useful surface does not include: the surface of loggias and/or balconies, door thresholds, niches where radiators are located, nor the surfaces occupied by stoves and bathroom boilers, if they are in the home. in the case of homes that have an internal staircase, this is not included in the calculation of the total usable area. the total useful area is not defined in any legal text, but it is frequently used by real estate developers, being considered the sum of the useful area, as described by law, to which is added the area of loggias and balconies related to the building or apartment in question. concerning the condition regarding the surface limit, problems of legal interpretation may arise for the inclusion of the legal operation of the transfer of ownership in the reduced rate or in the standard rate of vat, in the situation where the parties agree to sell and respectively buy a 15 future immovable property , regarding which a sale-purchase promise is concluded from the project phase of the future construction that will be purchased. first of all, for the establishment of the vat rate, it is important to analyze, according to the documentation attached to the preliminary sale-purchase contract (project, construction permit, plans, cadastral sketches) or the sales contract (cadastral documentation), the usable area and not of the built one. especially in the situation of the intention to purchase a future building, it is important to check according to the clauses of the pre-contract, the margin of difference between the areas of the building resulting from the cadastral sketches and those specified in the pre-contract because if, according to the estimates of the construction project, the usable area is close to size limit of 120 sqm., it is possible that the useful surface resulting after the completion of the construction will exceed the legal limit, the price of the property will increase significantly by changing the vat rate from 5% to 19%. on the other hand, the tax legislation establishes that when measuring the total usable area of the building, the area of the household annexes will not be taken into account. law no. 50/1991 classifies the notion of household annexes as the constructions of a definitive or temporary nature, intended to house specific activities, complementary to the housing function, which, by being located in the vicinity of the home, make up together with it a distinct functional unit. in the category of household annexes, as a rule in the countryside, are included: summer kitchens, stables for large animals, barns, warehouses, warehouses and the like. similarly, garages, conservatories, swimming pools and the like are assimilated to the notion of outbuildings. however, the household annexes as well as the land on which the constructions are located will be taken into account when meeting the value threshold condition of the transaction, under certain conditions. according to the relevant legal provisions in this area, for the applicability of the reduced vat rate, the transfer of ownership must concern a building that, at the time of sale, can be lived in as such. the phrase used by the legislator, "habited as such" does not benefit from a definition of the term, leaving room for interpretations that can generate problems regarding the classification of the transaction in one or another vat rate. thus, in a generalized interpretation, the fiscal body considers that a building can be inhabited as such by reference to the provisions of art. 2 lit. b) from law no. 114/1996 of housing, which defines the phrase "convenient housing", namely a "housing that, by the degree of satisfaction of the relationship between the user's requirement and the characteristics of the housing, at a given moment, covers the essential needs of rest, food preparation, education and hygiene, ensuring the minimum requirements presented in annex no. 1 to law no. 114/1996". appendix no. 1 to law 114/1996 includes a list of minimum requirements for convenient housing, such as free individual access to the living space, without disturbing the possession and exclusive use of the space owned by another person or family, space for rest, space for food preparation , sanitary group, access to electricity and drinking water, controlled disposal of waste water and household waste, etc. 3. provisions of the fiscal code starting january 1, 2023 but let's see concretely what are the news. thus, from january 1, 2023, the fiscal code underwent changes by o.u.g. 16 /2022, thus the 5% vat rate will be applied to the purchase of a single house with a price of no more than 600,000 lei, exclusive of vat. compared to the current rules (two existing caps, one with an unlimited number of purchases and another applicable for only one possible purchase), the new rules seem simpler: only one price ceiling and only one possible purchase. 16 if we take into account the recent changes made to the taxation of rental income for individuals, namely the elimination of the flat rate, which attracts a higher rent tax, as well as the limitation of access to a single dwelling subject to the reduced vat rate and within the limit of a reduced ceiling, a tendency can be observed that can discourage such investments among natural persons. it remains to be seen whether this will have the effect of a migration of this type of investment to companies, in which case they can apply reverse taxation to vat as well as certain expense deductions. on the other hand, the previous increase in the ceiling had the purpose of aligning this limit with the current price of housing, given the evolution of the real estate market. here is that, despite the maintenance of high prices on the market, the maximum ceiling under which you can buy a property with reduced vat will decrease by 100,000 lei, which will, however, limit the population's access to properties with a 5% vat rate. in addition to uncertainties in the planning of the development activity, due to frequent changes regarding vat in the current context of challenges related to inflation, price increases for construction materials, increases in labor costs, real estate developers will find themselves between the need to ensure an offer adequate to the new ceiling and to maintain the profit margin. good news would be, however, maintaining the 5% vat rate for buildings delivered in 2023, but which fall within the conditions applicable in 2022 and for which advances were paid in 2022. thus, from the transitional provisions, it is possible understands that real estate with a value below 700,000 lei will still be able to be purchased with reduced vat, if advances have been paid for them in 2022. a contrary interpretation would directly affect individuals who contract such real estate in 2022, for which the percentage increase might not be financially sustainable, from own sources or from lending. moreover, in such a situation we could see a blockage on the real estate market, which is not desirable under the current conditions. according to the same transitional provisions, deliveries made starting from 2023 for buildings with a price below 450,000 lei, for which preliminary contracts were concluded and advances received in 2022, would not be taken into account when calculating the limit of a building subject to the 5% quota to vat, for each individual. thus, the buildings purchased starting from 2023, according to the new rules, will be registered in a new register ("register of housing purchases with a reduced vat rate of 5%, starting from january 1, 2023"). this seems to indicate that, from january 1., 2023, a new chapter begins in terms of vat in the real estate market, and transactions contracted prior to this date remain on the rules of 2022. regarding the acquisition of real estate by individuals individually or jointly with another individual or individuals, a series of implications may arise in practice. thus, a first question would be related to the meaning of this phrase if it refers to persons with degrees of kinship or any form of co-ownership. in addition, there is the question of what happens if the purchase is made by two spouses who later decide to divorce. can they still purchase another property for which they can benefit from the reduced vat rate? basically, no. also, what happens if the two spouses purchased a property with a 5% vat rate during the marriage under the property separation regime? will the other spouse still be able to purchase a property with a 5% vat rate? certainly, a series of questions remain, which should be clarified in the coming period, as real estate developers have the task of applying the correct vat rate for the deliveries made. 4. conclusions in the case of the vat rate for the purchase of housing, the provisions of the fiscal code bring a simplification starting from january 1., 2023. there will be a single value ceiling, namely 17 600,000 lei and a small number of purchases to which a 5% vat rate can be applied, namely only one. the transitional provisions, regarding transactions for which an advance was paid in 2022, bring a clear and fair provision for individuals in this situation. changes brought to the taxation of rental income, in the case of individuals, namely the elimination of the flat rate, will attract a higher rent tax, as well as the limitation of access to a single dwelling subject to the reduced rate of vat and within the limit of a reduced ceiling, show a trend that can discourage such investments among individuals. the future will show us if there is an impact in the migration of this type of investment to companies, a situation in which they can apply reverse taxation to vat as well as apply certain expense deductions. it could be considered that one of the reasons for the expected change is the increase in revenues to the state budget and, perhaps, the tempering of the appetite of individuals to invest in more "social" housing with a reduced vat rate. references [1] law 227/2015 on the fiscal code [2] ordinance 13/2021 [3] ordinance 16/2022 [4] law no. 114/1996, republished, with subsequent amendments and additions [5] law no. 50/1991 agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 126-134 126 the microcredit as a short-terms instrument for sustainable development the north-west region of albania: shkodra case m. zeneli, a. reci mimoza zeneli¹, armalda reci² ¹ business university collage of albania, e-mail: mzeneli2017@gmail.com ² credins bank of albania abstract. the sustainable development goals are a global call to action to end poverty, protect the earth's environment and climate, and ensure that people, regardless of location, can enjoy peace and well-being. recently notice that albanians tend to move abroad. recent trend show that albanians tend to move abroad. this is characteristic especially for the north of albania. shkodra region is a northwest part of albania that is known for its wealth of natural recourses, culture and traditions. it is surrounded by a lake, a sea, and a river; also the people of shkoder are called “the creedal of arts and knowledge”. but the poverty indicators prove the opposite. the poverty in this region is nearly 15 %, and the unemployment level is very high. people tend to leave shkodra. they have land and professions but they don't have the property legality and cash to exploit these natural resources. to have a sustainable development region, the government needs to take measures to help people to work their lands and to create their company. interviewing a sample of 200 people in rural areas in shkodra (borrowers/not borrowers) we notice that microcredit has a short-term impact in increasing their incomes and consequently contributes to reduction of immigration. before and after is the method used for impact analysis in order to reach the above conclusion. keywords: sustainable development, shkodra region, poverty indicator, microcredit impact, immigration. introduction the sustainable development goals (sdg) are a global call to action to end poverty, protect the earth’s environment and climate, and ensure that people everywhere can enjoy peace and prosperity. 19 un agencies are working together to support albania’s achievement of the sdgs, united nations albania (una,2022). one of the important objectives of the sdgs is "no poverty" which means "the elimination of poverty in all its forms throughout the world". albania has prepared a number of strategies that address development policies in various fields of development, which focus on the socioeconomic improvement of albania in the years 2021-2030, but based on the current situation of albania, the urgent need is to reduce inequality between the regions regarding main areas of development, especially in the reduction of poverty. this is and the first objective of sdgs mailto:mzeneli2017@gmail.com mimoza zeneli, armalda reci 127 i. problem statement the aim of the article is to study the assessment of the impact of microcredit on socio economic indicator of shkoder region regarding the reduction of the level of poverty as a first objective of sdg. access to financial services is crucial for economic development. microcredit is a development model is a model that has been adopted in many countries of the world to provide loans to the poor who have no or little collateral. based on the results on our analyses it was noticed the microcredit has an impact on family incomes as well as in improving health. i.1. poverty in albania the comparison of the risk of being poor for 2021, between albania and other countries of the region and the european union show that: the highest value of relative poverty is recorded in latvia (23.4%), romania (22.6%) ), bulgaria (22.1%) followed by albania (22%). the lowest poverty rates are recorded in the czech republic (8.6%), finland (10.8%), slovenia (11.7%), slovakia (12.3%) and denmark (12.3%). the average of european union countries (27 countries) is 16.8%, institute of statistics (is, 2021) according to the world bank, from 2021 to 2023, poverty will decrease by only 1.5 % in total, even less than in the last seven years, which proves "the very slow trajectory that poverty reduction has in albania". what is important to emphasize is that the level of poverty, as well as other socioeconomic indicators, are different in different regions. the shkodra region is one of the regions with the highest poverty indicators, as it is shown in table 1 table 1.poverty indicators by prefecture, 2012. poverty measures district headcount depth severity berat 12.3 2.3 0.7 dibër 12.7 2.3 0.7 durrës 16.5 3.6 1.3 elbasan 11.3 2.3 0.7 fier 17.1 3.4 1.0 gjirokastër 10.6 2.4 1.0 korçë 12.4 2.5 0.7 kukës 22.5 3.8 0.9 lezhë 18.4 4.7 1.8 shkodër 15.5 3.7 1.6 tiranë 13.9 2.7 0.8 vlorë 11.1 2.4 0.8 total 14.3 3.0 1.0 source: living standart measurement survey, lsms 2012* instat * after publishing the revised data for population 2001-2014 in may 2014, the data from lsms 2005, 2008, 2012 are revised. the microcredit as a short-terms instrument for sustainable development the north-west region of albania: shkodra case 128 the district of shkodra does not have the highest level of poverty, but what makes us analyse this district is the fact that shkodra is one of the districts with many natural resources, with an admirable geographical position on the border, with a tradition in education and culture, but regardless of these assets, it is ranked in the high-level poverty districts. i.2. shkoder district and natural resources the district of shkodra lies in the northern part of albania, in a territory of 3,562 km2, with geographical limits with montenegro in the north and northwest, with the district of kukës in the east and with the district of lezha in the south, while it reaches the adriatic coast in the west and southwest. the favourable geographical position in terms of cross-border relations enables the economic and territorial connections of shkodra with montenegro and kosovo, turning the city into a strategic point of the district; the climate is mediterranean, with a mixture of continental and maritime. in the southeast of shkodra lies the rozafa castle, at a height of 130 m above sea level and with an area of 3.6 ha, shkodër district council (sdc, 2010). to the north and northeast lays the plain of mbishkodra, while to the north and northwest is bordered by the albanian alps. in the opposite direction, about 30 km southeast of the city, lies velipoja, a beach on the adriatic coast. thus, within 30 km of the city there are a number of natural attractions, ranging from the high mountains of northern albania to the mediterranean coast of the adriatic, from the shores of the largest lake in the balkans to rozafa castle, which stands majestically on a city, where a hundred years ago there was a navigable river that brought foreign ships and passengers to its heart. shkodra is also one of the cities with a university. thanks to the very good natural resources that the shkodra region possesses and the favourable geographical position, this region has a suitable environment for the development of mountain and sea tourism, the development of agriculture and other economic activities. i.3. socio-economic indicators of shkodra district the population of shkoder district has a decreasing trend. if we refer to the statistical data of the internal migration of the population, we will notice that the departures from the county are greater than the incoming flow. compared to the general data, shkodra is the fourth district in terms of population migration in the country. table 2.domestic movements by county by variable, year and county. shkoder district year 2014 2015 2016 2017 2018 2019 2020 2021 incoming flows 1172 1338 2239 1692 1099 1682 1559 1994 outcoming flows 1830 2277 3409 2980 1559 2230 2367 2666 difference 658 939 1170 1288 460 548 808 672 source: is referring to the data on gdp or dgp per capita, we note that the trend is in decline. the growth rate of shkodra gdp in real terms is increased by 4.6%, being ranked as the eighth district (out of 12 districts) for the contribution to the overall gdp growth. mimoza zeneli, armalda reci 129 table 3. dgp for shkodër region. indicators in region measuring units 2015 2016 2017 2018 2019 2020* gross domestic product, in current prices mill. euro 554 582 596 655 699 668 growth rate of regional gdp % 1.6 3.1 -1.0 3.5 2.3 -4.6 gdp per capita euro 2,616 2,784 2,888 3,214 3,471 3,363 *evaluation for the year 2020 are based on semi-final estimation of gdp also, the official statistics shows that starting from the 2011-2012 school year, there is a decrease in the number of students registered over the years in all the universities of the country, including the university of shkodra. specifically, in 2011 there are 158,963 registered students nationwide and 14,538 students registered at the university of shkodra, which account for about 9.1% of the total number of students registered in all universities of the country. while in 2018, we have 113,277 students’ registered nationwide and about 8,245 students at the university of shkodra, which make up 7% of the total number of students. so, there is a decrease of 28.7% in the total number of students in the country compared to 2011, this also explains the decrease in the number of students at the university of shkodra. ii. methodology theoretically, a number of econometric techniques are known for impact evaluation, but their use requires appropriateness of data and the fulfilment of certain conditions. we have considered the "log-linear model" with an independent variable dummy most appropriate model regarding to the type and volume of data collected for measuring the impact or effect of microcredit on the socio-economic indicators of families in rural areas, gillespie, m. w. (1977). the dummy variable consists of the state of the indicators "before and after" receiving the microcredit. dummy variable d (before-after) takes the value 1 for the state before access to microcredit and the value 0 for the state after access to microcredit in the borrower group. in this way, the coefficient next to the dummy variable shows the impact of microcredit on the variable of interest, alba, r. d. (1987). based on above, the log-linear model was estimated and the corresponding coefficients were analysed for the assessment of the microcredit effects on each of the socioeconomic indicators considered in this analysis. through the analysis of the log linear regression coefficients it will be shown: (i) the impact of microcredit on the level of income in the rural areas of the shkodër district; (ii) the impact of microcredit on the educational level of the inhabitants; (iii) the impact of microcredit on increasing the level of employment of the residents of the rural areas, mckernan sm (2002); (iv) the impact of microcredit on improving the living conditions of the residents in the rural areas, chliova, m., brinckmann, j., & rosenbusch, n. (2015). ii.1. population and sample based on the fact that the study refers to the shkoder region, then the population will be the borrowers (residents of the rural areas of the shkoder region). a sample has been chosen which consists of 200 families who are beneficiaries of a loan in one of the microfinance institutions operating in these rural areas. data were collected before and after receiving the loan through the questionnaire prepared for this purpose. the microcredit as a short-terms instrument for sustainable development the north-west region of albania: shkodra case 130 ii.2. statistical analysis as we mentioned above, the data were collected through questionnaires by interviewing 200 borrowers. the sample consists of 80% men and 20% women. from the data analysis, it appears that approximately 60% of the interviewed borrowers belong to the middle level of education, 35% to the low level, and 5% to the high level of education. 95% of the interviewees are self-employed and 5% are employed in the public sector. regarding the profession of the respondents, 75% are workers, 15% are veterinarians and 10% are agronomists. based on the fact that the impact of microcredit is to be evaluated, data has been collected for the indicators that will be analyzed in two main periods before and after obtaining the loan. the period of access to microcredit is marked with t. t-3, t-2, t-1 are the periods before access to the microcredit, and t+1, t+2, t+3 are periods after access to microcredit. if there is a difference between the two periods, we will conclude that access to microcredit has an impact on the indicator that is being analyzed. iii. results the following table summarizes the results of processing the data collected from the selection of some key socio-economic indicators in two main periods, before and after access to microcredit. table 4. key indicators “before and after” loan in the borrower group. indicators unit 1 2 3 4 5 6 7 before after t-3 t-2 t-1 t t+1 t+2 t+3 income / family / month (all) 69,550 70,012 69,813 72,020 72,593 72,901 expenses for education/family/month ( %) 1.37% 1.45% 1.50% 1.87% 1.92% 1.98% expenses for social activities / family / month ( % ) 2.75% 2.75% 2.75% 2.78% 2.78% 2.78% average number of hospital visits (average number of medical visits / family/month) 2.6 2.4 2.3 1.95 1.8 1.75 average number of employees (average number of employees /family/month) 2.527 2.53 2.53 2.55 2.554 2.555 expenses for residence reconstruction (%) 6.69% 6.03% 6.71% 11.13% 11.56% 11.58% referring to the above table, it can be seen that all the indicators have an increasing trend, mimoza zeneli, armalda reci 131 starting from the period t-3 to the period t+3, exception for the number of visits to the hospital, a variable which has a negative trend. referring to the data in table 4, it is observed that the main indicators such as: "income", "employment", "education", "social activities" and "living conditions" have a shift in the increasing direction after receiving the loan in comparison with the dynamics of the indicators in the period before receiving the loan. the opposite happens with the "number of hospital visits", which moves in a decreasing direction after receiving the loan compared to the period before receiving the loan, which is evident due to the improvement of living conditions, the number of health visits is expected to decrease. iii.1. the impact of microcredit on the level of income in the rural areas of the shkodra district the following table shows the results of the "log-linear model", where the independent variable is the dummy variable itself and the dependent variable is "income". table 5. income change after access to microcredit. dependent variable: log(tr1) method: least squares sample: 1 200 included observations: 200 variable coefficient std. error t-statistic prob. c 11.32933 0.042750 265.0116 0.0000 dparpas -0.195406 0.060458 -3.232085 0.0025 r-squared 0.215628 mean dependent var 11.23162 adjusted r-squared 0.194986 s.d. dependent var 0.213085 s.e. of regression 0.191185 akaike info criterion 0.422442 sum squared resid 1.388967 schwarz criterion 0.337998 log likelihood 10.44884 f-statistic 10.44637 durbin-watson stat 1.433585 prob(f-statistic) 0.002541 referring to the data, it is noted that the coefficient near d is negative. this shows that after access to microcredit there is an increase in income by 1.16 percent points. when d has the value 1 (i.e. before access to microcredit), then log (tr) = 11.33-0.195, while if d = 0, then log (tr) = 11.33, a fact which shows that the impact of access to microcredit is approximately 1.16 percentage from the table, it is also observed that the p-value is 0.0025 less than the significance level 0.05, which means that the coefficient is statistically significant. meanwhile, based on the fact that r2 is around 0.22, it can be said that the model is statistically significant. referring to the graph, there is a positive shift of the graph (change which is identified with a dashed line) through which the increase in income as a result of access to microcredit is shown. 1 tr = “incomes”. the microcredit as a short-terms instrument for sustainable development the north-west region of albania: shkodra case 132 figure 1. income’s change after access to microcredit. referring to the above analysis, at the 5% significance level, there is sufficient evidence to support the statement that microcredit has positive impact on incomes. iii.2. the impact of microcredit on improving the health care level of residents in the rural areas of shkodra district the same methodology as above is used to evaluate the impact of microcredit on improving the health care level. below we will present the conclusions reached from the analysis. the dummy variable will be the same access to microcredit and the dependent variable will be the average number of visits to the hospital. from the processing of data, it can be observed that the the positive coefficient next to dummy variable (+ 0.498) shows that access to microcredit reduces hospital expenses by 4.98 percent points. the p-value is 0.0060 less than the 0.05 significance level, which means that the coefficient next to the dummy variable is statistically significant. meanwhile, based on the fact that r2 is around 0.18, it can be said that the model is statistically relativly significant. in conclusion, we can say that microcredit affects the improvement of the health level. iii.3. the impact of microcredit on increasing the level of employment of residents of rural areas of shkodra district the dummy variable will be the same, access to microcredit and the dependent variable will be the average number of employees. from the data analysis, we notice that the coefficient next to the dummy variable is 0.189000. also from the data table it is observed that the p-value is 0.4267 greater than the 0.05 significance level, which means that the coefficient next to the dummy variable is not statistically significant. this indicates that with a significance level of 5%, there isn’t sufficient evidence to support the statement that microcredit has impact on the level of employment. in the same way, it has been shown that microcredit has a positive impact on the improvement of living conditions. -0.6 -0.4 -0.2 0.0 0.2 0.4 10.8 11.0 11.2 11.4 11.6 11.8 5 10 15 20 25 30 35 40 residual actual fitted mimoza zeneli, armalda reci 133 conclusions microcredit has an important role in reducing poverty and improving the standard of living of families that have had access to microcredit, and therefore it is an instrument that contributes in the short term to sustainable development, microcredit summit campaign (msc,2009). achieving the objectives of sustainable development requires comprehensive planning and a cross-cutting strategy to unite common policies and solve the problems that arise in the horizontal plane. regardless of the existence of strategies and investment by the government in different areas of the economy, it is necessary to support the vulnerable population at the same time, since the impact of the macro economic regulations reaches this segment of the population later, demoralizing them. hubka, ashley, zaidi, rida. (2005) indicate that ““scaling up” will require increasing the scope (number of individuals reached), impact (effect on the well-being of borrowers), and depth (ability to reach the poorest of the poor) of microfinance. the idea is to make microfinance available not just to the moderate poor at whom it has traditionally been targeted, but also to the extreme poor and the vulnerable non-poor, and to expand the set of microfinancial products offered (cgap, 2003b)” (p.6) refering to the above results, it is noticed that the access in microcredit increases the incomes approximately by 1.16 percent points, that is a good result for poor families. also reduction of the hospital expenses by 4.98 percent points is another important impact of microcredit. also armalda reci (2021) estimated that “access to microcredit increases spending on the consumption of essential food products by 2.6 percentage points” (p.98). but with regard to the problems that albania has faced recently, immigration, it is necessary for the government to identify financial and political instruments that have an immediate impact in order to prevent the immigration of citizens from albania. one of these instruments can be considered exactly "microcredit". the creation of microcredit financial institutions in the region of shkodra specifically for crediting or guaranteeing loans to farmers who invest in agriculture, livestock and the field of agro-processing in accordance with agricultural development policies. the creation of training and advisory institutions and their financial support from the state, which enable counseling, training and orientation of the residents of rural areas towards appropriate and effective investments within the framework of the use of the resources they have available. the creation of the necessary advisory and guarantee instruments by the shkodra local or central institutions, which enable residents to benefit from the eu grants applicable for making investments in the framework of the development of rural areas. these measures are very important because they create premises for poverty reduction, and economic development of the rural area and consequently limited the abandonment of the country. references 1. alba, r. d. (1987). interpreting the parameters of log-linear models. sociological methods & research, 16(1), 45-77. 2. armalda reci (2021). socio-economic impact of micro-credit in rural areas of microcredit in shkoder district. (doctoral thesis, tirana university albania). form the microcredit as a short-terms instrument for sustainable development the north-west region of albania: shkodra case 134 https://unitir.edu.al/impakti-socio-ekonomik-i-mikrokredive-ne-zonatr-rurale-rasti-imikrokredive-ne-qarkun-shkoder 3. chliova, m., brinckmann, j., & rosenbusch, n. (2015). is microcredit a blessing for the poor? a meta-analysis examining development outcomes and contextual considerations. journal of business venturing, 30(3), 467-487. https://doi.org/10.1016/j.jbusvent.2014.10.003. 4. gillespie, m. w. (1977). log-linear techniques and the regression analysis of dummy dependent variables: further bases for comparison. sociological methods & research, 6(1), 103-122. 5. hubka, ashley, zaidi, rida. (2005). impact of government regulation on microfinance. ©washington, dc: world bank. from http://hdl.handle.net/10986/9133. 6. institute of statistics (2021). measuring income and level of living in albania, 2021. https://www.instat.gov.al/media/11129/anketa-e-t%c3%ab-ardhurave-dhe-nivelitt%c3%ab jetes%c3%abs-n%c3%ab-shqip%c3%abri-2021_final_publikim.pdf 7. mckernan sm (2002). the impact of microcredit programs on self-employment profits: do non-credit program aspects matter? review of economics and statistics, 2002. 8. microcredit summit campaign (2009). the state of the microfinance institutions and their clients’ world-wide, from http://www.syminvest.com/market/news/microfinance/state-of-themicrocredit summit. 9. shkodër district council (2010) “the strategic concept of shkodra's development” from https://www.qarkushkoder.gov.al/dw/mk/koncepti%20strategjik%20i%20zhvillimit %20rajonal_kszhr.pdf. 10. united nations albania (2022). our work on the sustainable development goals in albania (2023). from https://albania.un.org/en/sdgs/1. https://unitir.edu.al/impakti-socio-ekonomik-i-mikrokredive-ne-zonatr-rurale-rasti-i-mikrokredive-ne-qarkun-shkoder https://unitir.edu.al/impakti-socio-ekonomik-i-mikrokredive-ne-zonatr-rurale-rasti-i-mikrokredive-ne-qarkun-shkoder https://doi.org/10.1016/j.jbusvent.2014.10.003 https://www.instat.gov.al/media/11129/anketa-e-t%c3%ab-ardhurave-dhe-nivelit-t%c3%ab%20%20%20jetes%c3%abs-n%c3%ab-shqip%c3%abri-2021_final_publikim.pdf https://www.instat.gov.al/media/11129/anketa-e-t%c3%ab-ardhurave-dhe-nivelit-t%c3%ab%20%20%20jetes%c3%abs-n%c3%ab-shqip%c3%abri-2021_final_publikim.pdf http://www.syminvest.com/market/news/microfinance/state-of-themicrocredithttp://www.syminvest.com/market/news/microfinance/state-of-themicrocredithttps://www.qarkushkoder.gov.al/dw/mk/koncepti%20strategjik%20i%20zhvillimit%20rajonal_kszhr.pdf https://www.qarkushkoder.gov.al/dw/mk/koncepti%20strategjik%20i%20zhvillimit%20rajonal_kszhr.pdf agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol 10 (2016) 14 the information management of the projects creț vasile 1 abstract methodologically point of view, the management of a company is studied based on the systems, methods, methodologies and techniques (general and specific) that the managers apply to fulfill the managerial functions. the managerial tool consists of systems, methods and management techniques that appeal to managers for foresight exercise, organization, coordination, assessment and control. informal subsystem is perfect adapted to the profile of the organization. it is integrated in the informational system of the mother company, being advantaged, because of its physical distance between locations, the electronic communications in detriment of paper. this fact implies the existences of a very good communication infrastructure. the main characteristic of a project is its newness. a project is a walk in unknown, full of risks and uncertainness. there are no two identical projects and even a project which repeats will be every time different in one or more commercial, administrative, social, politics or physic aspects. key words: project management, market, subsystems 1. project management the management is considered, by almost all the authors, to be the most important factor that influences the behavior of a company on the market. the person that works in this activity, the manager, is the one who takes the decisions that have a large or low influence upon the company, depending on the position he is in. the study of the organization management consists in a management system (a set of methodological, decisional, informational, organizational, psychological, motivational elements and the relations between them, so as to enable the objectives outlined 2 ), formed out of a lot of subsystems:  the methodological subsystem  the decisional subsystem  the informational subsystem  the organizational subsystem the most important are the management systems, management methods, design methodologies, redesign and maintenance of operation management and its components. 3 through decision making system of an organization we refer to all the decisions adopted and applied in its frame, structured correspondingly to the system, its objectives and configuration of the management hierarchy. the decisions are choices of the managers – chosen from several possible – that influence the behavior of decision making and operational behavior of other people. the decision making process is influenced by several factors, including the type of decision maker, the decision objective, the number and complexity of variants, the criteria and the consequences of the decisions. the information system can be defined as a set of data, information, flows and circuits’ information, procedures and means of information designed to help establish and achieve the organization objectives. 4 these 1 agora university of oradea, tineretului square nr.8, 410526, oradea, romania, vasilecret@univagora.ro 2 i. verboncu, organizaţii orientate pe proiecte, note de curs, a.s.e., 2009 3 i. verboncu, organizaţii orientate pe proiecte, note de curs, a.s.e., 2009 4 niculescu, o., verboncu, i., management, economica publishing house, bucharest, 1999 15 information and data are offered by informational procedures and together with the informational means (manual and automated) used inside a company creates the informational system. every company has a formal organization, based on internal documentation, which determines the existence of some functions, and posts required for the objectives, and an informal organization, determined by informal groups, necessary to fulfill the personal interests of the company’s members. the management personalization, and the people that implement it, is necessary to assure the adaptation of the company to a fast rhythm of changes which happen every day. the personalization implies profound changes of the management subsystem, and the implementation of different classic management system ( as for example: management through profit centers, management through objectives, management through projects, management through exceptions, management on product). in the business affairs from romania, the principles of the professional management began after the revolution from 1989, in especially because of the appearance of foreign managers. these principles where first applied at the multinational companies, and this thing forced the local companies to adapt, being threatened with bankruptcy. with all of these, in many romanian companies, in especially the state ones, the professional management remained an unknown, despite the certain advantage which this management can bring to a company. 1.1.the organizational subsystem the leader is “the person which, because of its formal and/or informal status (power, prestige, influence), mobilizes, organizes and leads the members and the group activities through establishing and touch their purposes” 5 . the documents which regulates activity in a company are internal regulations (ir), collective work contract and job description. in the last one are specified: the position of the employee, the department from which the employee is apart, study requirements and the years of experience for occupying the job, hierarchical relations, functional and cooperation, the duties and responsibilities associated to the work. besides the formal leaders, there are team leaders (that might be considered informal leaders), which coordinates the activity of a 4-5 members. these are not signed as managers in the company documents, but they have a functional authority above other team members. in general, from this category are elected the future managers, putting a smaller accent on external recruitment at this level 6 . structural organization of the company it’s a way of trimming of some organizational subdivisions in a certain configuration, for achieving the objectives 7 . in most of the companies, the structural organization is adapted to certain needs. management functions are reduced as much as they can; the accent is moved on execution functions. the numbers of hierarchical levels are low, realizing a flattened structure, in which the information moves vertically very fast. informal organization, which is formed from informal groups and their connections 8 , varies from a project to another. the groups are formed especially in accordance with putting different teams in a commune physic space and their experience in the company, and less on friendship relations between employees. the authority relations are established in the company between managers and subordinates (the hierarchic authority), but even in different departments. cooperation relations are established between jobs and compartments placed on the same hierarchic level, especially in the case in which compartments are involved to realize a project (for example between developing and testing). methodological subsystem from methodological side of view, the company uses in a higher grade than most of the romanian companies a modern managerial instrument. so, in the moment in which the company leadership is changed, 5 s. chelcea; p. ilut; enciclopedie de psihosociologie, economica publishing house, bucharest,2003, pag.207 6 nicolescu, o., verboncu, i., management, economica publishing house, bucharest,1999, pag. 42 7 i. verboncu, organizatii orientate pe proiecte, note de curs, a.s.e. 2009 8 op.cit. 16 there takes place a total reorientation of society management, moving from the classical management to the management through project, to be more exact, project management with staff. management through project is a management system with a limited duration, which facilitates resolving some complex problems, with a innovational character, by specialists, which work side by side with the formal organization structure. 1.2.informal subsystem informal subsystem is perfect adapted to the profile of the organization. it is integrated in the informational system of the mother company, being advantaged, because of its physical distance between locations, the electronic communications in detriment of paper. this fact implies the existences of a very good communication infrastructure. the information that can be transmitted in the company, between different compartments, are:  technical documents, which contain information regarding realizing the company products (for example the design of different new capabilities integrated in products, the documentation of products, different trainings etc.);  administrative documents (announces, requests, reports);  information regarding the evolution of current activities, designated to management. beside these information, there are exogenous information (from the exterior of the company), which contain data about the perception of clients about company products, information regarding the progress of rivals products and the university researchers from the interested domain 9 . the way of treating the information should be, in a big way, automated. the internal network (intranet) of a company can include equipment’s and specialized programs for the majority of the administrative activities, but also of project management. where is not possible the automated way of information, it is preferred using the email than paper, and this is how we can obtain a “paperless desk”. the advantages of using electronic information’s are:  the fact that finding information’s take seconds, comparing with minutes or even hours in paper documentation;  reducing operating costs by avoiding large archives and replace them with electronic archives;  reducing the risk of spreading information to unauthorized persons, secure information, destroy information quite easy 10 . 1.3.decision subsystem from the decision way, in the majority of the companies we mostly find the participative style, in which all the decisions are discuss with the involved parts. the final decision is individual, being taken only by the manager. in the annual prevision plan there is a larger decisional circle, where are included even lower level managers (even employees with experience), especially from the productive compartments. the decisions adopted at all levels have to target the following conditions: to target one or more precise objectives so that their achievement to be quantified exactly; to have more options from which to choose the optimum solution for achieving the objective, as well as a back-up solution; to take notice of economic, financial, temporal and social limitations. control function of management assumes the evaluation of results, comparing them with the objectives, finding the cause of the main positive and negative source and taking decisional solutions with corrective or 9 g. johns, comportamentul organizational, economica publishing house, bucharest, 1998 10 i. verboncu, organizatii orientate pe proiecte, note de curs, a.s.e. 2009 17 prophylactic character 11 . in the studied company, this function is tied with the rewards given to employees, the control result being the base foundation for material rewards. in the studied company, the control is decentralized, being made for each team. the results obtained are compared with the initial objectives for each employee, for each project, and in the quarterly and annual evaluation. the procedures are changed every year, based on the experience from the last years. with all of these, there are some management components that could be better. from these we remind:  learning from positive and negative experiences  treating employees with respect as well as to suppliers and clients, realizing a overlapping of the personal objectives with the company objectives  better work conditions, to increase productivity  to make a relation between the wage and performance  to respect the principles of the management through projects: involvement of all team members; approval from all the members of the project, measuring the success ( in terms of quantity, quality, time, efficiency and costs), compromise, strategy, control, unique communication channel, culture 12  reviewing and improving the methods used to identify the proper person for a job, he can a leader or worker, using in this way the optimum available human potential, rewarding of those who are worthy, avoiding conflicts between employees because of promotions on vague criteria, the bosses possibility to give orders to its employees etc 2. the computerized management of projects project management appeared as a planning, coordination, realizing and controlling instrument of complex activities from industrial, commercial, social, cultural and modern politics projects. it uses software applications in computerized management of projects 13 . the main characteristic of a project is its newness. a project is a walk in unknown, full of risks and uncertainness. there are no two identical projects and even a project which repeats will be every time different in one or more commercial, administrative, social, politics or physic aspects. project management is the process of planning, organizing and control of phases and results of a project with the purpose of obtaining a well-defined objective which usually has time restrictions, resources and costs. project management imposes planning, organizing, monitoring and control of all aspects and motivating all who are involved to realize the project objectives safety, in time limit, costs and targeted performance criteria. before starting project management it must be very clear identified its purpose. there are no projects without measurable objectives. the way the objective is set is specification. this is defined as a measurable expression of characteristics at which the product/service meet, being known by specialists as quantitative and qualitative needs offered by user. strictly, specification is a document which, in technical terms, the requirements which the realized product has to fulfil. the specification shows an actual solicitation of the client or can be a prediction for potential clients gathering drawings, models, plans, instructions or a written documentation which describes the projects objective. 2.1.the concept of project 11 i. verboncu, organizatii orientate pe proiecte, note de curs, a.s.e. 2009 12 d. savescu, a. budala, metode si intrumente pentru managementul proiectelor, brasov,2007 13 n. popescu, managementul informatizat al proiectelor – course notes 18 project is defined as a no repetitive process which realizes a new quantity, well defined, in some specialized organizations. projects characterizes as a unique action, specify, composed from a logic succession of activities, component, coordinate and controlled, with an innovation character by different nature, realized in an organize manner methodical and progressive, having time constrains, resources and costs, for obtaining with success complex results, needed to fulfill the objectives that are clear defined. in some projects, objectives can be better, and, the characteristics of the project are defined and adapt progressively by project developing. an individual project can be part from a bigger project. the realizing of a project is made through decomposing it in activities after “work breakdown structure” (wbs) method. the activities (work elements) are grouped in logical crowds “subprograms/work packages” with its subdivision in” activities/phases”. the project is developing in an organization which creates only on the existence of project 14 . the new created organization is called “consortium”. the performance of consortium is measured by its adaptability at realizing the projects objectives. the speed with which the employees of consortium unite their abilities and knowledges for finding solutions at realizing objectives is important. once a project objective is realized, the members of consortium make new different structure for realizing a new objective. the members of consortium have to have professional competences in the objectives problematics. a finished project leads to dissolution of the named consortium and regrouping the members of consortium for new projects. the flexibility and adaptability which characterizes a consortium, permanently permits the regrouping and recombining of human, physics and informational resources for realizing objectives. 2.2. life cycle of a project life cycle of a project is defined as the time period in which the project take time, as follows: marketing, elaboration of project proposal, winning the funding contest, thematic research for project realization, design for thematic research, production with realizing the thematic of the project, evaluation of project result, selling the project result with obtaining benefits, reusing and recycling some project results. the project realization impose crossing it through all stages of life cycle. life cycle of a project has the following stages: 1. identify, analyze, formulation; 2. preparing, estimation ( according with the fixed criteria), assuming; 3. implementation, monitoring, reporting; 4. final evaluation. the integrated conception on project management takes in sight 4 basic elements of a project:  time  budget(resources) – people, technology, money  quality ( a certain technology, performance, some characteristics of a product)  participants expectations ( financiers, members of project team, project manager, the beneficiaries, stakeholders – those involved in realizing projects – employees, shareholders, suppliers, public interest organism etc.). 15 so the stages of a project are:  project conception;  project planning;  project implementation;  evaluation/control and project revision dividing the project into several activities/tasks is needed from certain reasons: 14 d. hodgson, disciplining the professional: the case of project management, journal of management studies, volume 39, issue 6, pages 803-821,2002 15 d. hodgson, disciplining the professional: the case of project management, journal of management studies, volume 39, issue 6, pages 803-821, 2002 19 1. the project looks like a logical line of activities which help determining the optimum time graphic; 2. the activities can be easily controlled and evaluated; 3. it can be easily determined the need of personal and their skills. in the project management, planning means the “8p”:  project – why are we doing it?  paradigm/politics/procedures – how we do it?  paradigm refers at companies vision, what wishes it to obtain in future;  politics take care to establish the purposes, as modalities to reach a strategy, and procedures represent the action modalities through which the targeted objectives will be realized.  personal – who works?  program – when we do it?  performance – what we do?  price – who much does it cost? project implementation includes activities like monitoring, management of risks at which the project is exposed, finishing the project. in the evaluation stage of the project, the evaluation strategy will be established. it is necessary to make the periodical control in a time process to identify the deviations from the plan and the corrections that must be made. the fundamental processes can be found in the periodical reporting’s regarding project execution (the stat of the project, the forecasts for the projects future) and global control of the changes. helpful processes are:  the control of purpose change  the control of schedule planning  the control of costs  the control of quality  the control of risk answers. the processes of closing are:  closing contracts;  administrative measures of closing – gathering and disseminating information to give a legal form to shut down the project. 16 the post analysis of the project is a structure which gains a bigger importance. this is due the fact that the experience gathered on the course of the project will lead to avoid some past mistakes for the new projects. there are situations when projects can end abnormally. the causes that are at the base of these failures are:  wrong initial planning  insufficient resources  changes that occurred in the companies strategies and interests  quitting some key people from the project  exceeding the given time. bibliography 1. c. grey, management as a technical practice: professionalization or responsibilization, systemic practice and action research, volume 10, issue 6, pages 703-725, 1997 16 n. popescu, managementul informatizat al proiectelor – course support 20 2. d. hodgson, disciplining the professional: the case of project management, journal of management studies, volume 39, issue 6, pages 803-821, 2002 3. d. schweryler, professionalizing family business management, understanding family business, april 2008 4. g. benveniste, professionalizing the organization: reducing bureaucracy to enhance effectiveness, jossey bass, san francisco 1987 5. g. johns, comportamentul organizational, economica publishing house, bucharest, 1998 6. m. reed, p. anthony, professionalization management and managing professionalization: british management in the 1980s, journal of management studies, volume 29, issue 5, pages 591-613, 1992 7. n. popescu, managementul informatizat al proiectelor – course notes, 2009 8. o. nicolescu, i. verboncu, fundamentele managementuui organizatiei, tribuna economica publishing house, bucharest 2002 9. o. nicolescu, i. verboncu, i. cochina, c. nicolescu, d. popescu, abordari moderne in managementul si economía organizatiei : vol. 1 managementul general al organizatiei, economica publishing house, bucharest 2003 10. o. nicolescu,i. verboncu, management, economica publishing house, bucharest,1999 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 12 (2018) the use of relative statistical indicators, of central trend indicators and their interpretation cristina ioana antik1 1 agora university of oradea, tineretului square str., no. 8, oradea, romania e-mail antikcristina@yahoo.com abstract statistics is one of the economic evidence form in charge with the study of socioeconomic staple phenomenons, quantitatively speaking, in close connection with their qualitative side, in concrete conditions of space and time. the present article uses the importance of statistical indicators in the economic analysis of an economic entity, showing the calculation of theoretical and practical relative indicators, and the central trend indicators. keywords: statistical indicators, relative indicators, relative sizes, interpretation of statistical data, arithmetic mean, harmonic mean, geometric mean, mean square value, statistical interpretation, economic analysis. 1 introduction relative indicators are expressed in relative quantities and are used to analyze the evolution of economic phenomena over time. it is calculated as the ratio between the size it compares and the size taken as a basis for comparison. this ratio is a coefficient, which can be multiplied by: a. 100 and the result is called a percentage; b. 1000 and the result is called a promil. the types of relative sizes are [2]: structure of the dynamics coordination intensity of the plan (provisions) 2 types of relative sizes 2.1 structure related sizes it is calculated as the ratio between the size (in absolute amount) of a group and the size of the whole community [1]. calculation formula: o the size of a group o the size of the community they are also called specific weights or weights, ie how much a group represents in the community. obs: the sum of the group weights = 100% example: mailto:antikcristina@yahoo.com 2 table 1. the structure of clients at a company with tourist activity in 2018 (conventional data) categories of clients number of clients weight % internal clients 1.200 30 external clients 2.800 70 total 4.000 100 calculation of shares: internal clients no. 1.200 a.internal clients = ---------------------x 100 = ------x 100 = 30% total clients no. 4.000 external clients no. 2.800 b.external clients = ---------------------x 100 = -----x 100 = 70% total clients no. 4.000 interpretation: the number of external customers represents over 2/3 of the total number of customers (70%). 2.2 dynamics related sizes it is calculated as the ratio between the size of the indicator in the current period (1) and the size of the indicator in the base period [3]. calculation formula: the size of the indicator in the current period (1) the size of the indicator in the base period (0) they can be expressed in percentages (%) and promils. the relative quantities of the dynamics express the evolution in time of the economic phenomena (increase or decrease) [4]. example: table 2. the dynamics of the customer structure in 2018 compared to 2017 at a company with tourist activity categories of clients no. of clients year 2017 base period (0) no. of clients year 2018 current period (1) weight (%) 2017 2018 internal clients 1.200 1.760 30 40 external clients 2.800 2.640 70 60 total 4.000 4.400 100 100 calculation of customer shares in 2018: 1.760 a.internal clients = -----x 100 = 40% 4.400 2.640 b.external clients = -----x 100 = 60% 4.400 dynamics indicator: 1.760 c.internal clients = ----x 100 = 146,66% 1.200 2.640 d.external clients = -----x 100 = 94,28% 2.800 4.400 e.total clients = ------x 100 = 110% 4.000 3 interpretation: the total number of tourists at the analyzed travel agency increased in 2018 compared to 2017 by 10% or 110% or 1.1 times. the situation by categories of customers is as follows: in the case of domestic tourists, the number of domestic customers increased in 2018 compared to 2018 by 46.66%; in the case of foreign tourists, the number of foreign customers decreased in 2018 compared to 2017 by 5.72%. 2.3 coordination related sizes they are calculated as the ratio between the values of two groups, phenomena (communities), different territorial units [5]. calculation formula: the size of a group (communities), territorial unit to be compared (xa) ------------------------------------------------------------------------------------------- the size of a group (communities), territorial unit base of comparison (xb) or xb xa example: comparison of wheat production at two farms (data are conventional for 2018): farm a (1) the production was 30,000,000 lei farm b (2) the production was 24,000,000 lei wheat production at farm 1 30.000.000 lei a. variant 1 = ---------------------------------x 100 = -------x 100 wheat production at farm 2 12 mil result = 125% interpretation: wheat production on farm 1 was 25% higher than wheat production on farm 2 in 2018. wheat production at farm 2 24.000.000 lei b. variant 2 = ---------------------------------x 100 = -------x 100 wheat production at farm 1 15 mil result = 80% interpretation: wheat production on farm 2 was 20% lower than wheat production on farm 1 in 2018. 2.4 intensity related sizes they are calculated as the ratio between the value of two related primary characteristics and express how much of the value of the compared characteristic returns per characteristic unit basis of comparison. example: table 3. average production per worker (w) at two companies in 2018 with the same object of activity (textile garments) commercial company production value no. of workers average production per worker a 200.000 1.000 100 b 240.000 1.000 120 wb 120 size related to intensiy = ----x 100 = ---x 100 = 1,2 wa 100 4 interpretation: the average productivity per worker is 1.2 times higher in company b compared to company a, in 2018 2.5 provisions related sizes it is calculated as relative quantities of: planned volume in the current period a.plan tasks = -----------------------------------------------x100 achieved volume in the base period this index can be: sub-unitary, when a reduction is planned compared to the achievements of the previous period (expenses, costs); supra-unitary, when an increase is planned compared to the plan load (production, sales) achieved volume in the current period b.other plan achievements = -------------------------------------------- planned volume in the current period this index can be: sub-unitary, when the achievements of the current period are lower than the provisions (reduction); supra-unitary, when the achievements of the current period are higher than the provisions (increase). example: table 4. the volume of goods sales at the sc fresh fruct srl store in 2018 commercial company sales volume actual sales 2017 provisions 2018 actual sales 2018 sc fresh fruct srl 2.000.000 2.400.000 2.640.000 → the relative sizes of the plan task for 2018 provisions 2018 2.400.000 --------------------x 100 = -----------x 100 = 120% achievements 2018 2.000.000 interpretation: the company has forecast (scheduled) for 2018 an increase in sales volume by 20% (growth rate). → the relative sizes of the 2018 plan implementation achievements 2018 2.640.000 -----------------------x 100 = ----------x 100 = 110% provisions 2018 2.400.000 interpretation: the company registered an increase in sales compared to the annual provisions by 10% in 2018. the central trend indicators used in the statistical analysis of mass socioeconomic phenomena are studied using: average indices position indices 3 average sizes (indices) these average sizes are grouped by the nature of the characteristic into the following categories: -arithmetic mean harmonic average square mean geometric average chronological average 5 each average is calculated as: • simple average: when the number of characteristic variants is equal to the number of observed units; • weighted average: when the same variant is found in several observation units. 3.1 the arithmetic mean it can only be calculated for quantitative variables. the arithmetic mean can be simple and weighted. 3.1.1 simple arithmetic mean it is calculated as the ratio between the sum of the values (levels) of the characteristics and their number. where: n = number of variants xi = variants of the characteristics x = statistical characteristic example: a student obtained the following grades in the discipline "statistics" in the school year 2017/2018: 4,5,6,7,8,9 the average student at the end of the school year is: 4 + 5 + 6 + 7 + 8 + 9 ms = ------------------------= 39 / 6 = 6,50 6 3.1.2 weighted arithmetic mean where: n = frequencies i= number of characteristic variants example: the situation of students in a class according to their average in mathematics for a semester is as follows: table 5. the situation of students in a class according to their average math average (x) no. of students (n) xn 5 7 35 6 7 42 7 5 35 8 6 48 9 5 45 total 30 205 the general average of the students in this class in mathematics is calculated as follows: 205 mp = ----= 6,83 30 example: calculate the weighted arithmetic averages for a series of intervals: the distribution of students in a class of students at the end of a school year, according to the number of absences. n x x i =   = i ii n nx x 6 table 6. distribution of students in a class by number of absences groups of students by number of absences no. of students (f) the center (middle) of the range (x) xf 0-10 18 5 90 11-20 4 15 60 21-30 3 25 75 31-40 3 35 105 41-50 2 45 90 total 30 420 ma = σxf / σf = 420 / 30 = 14 interpretation: the average number of absences per student is 14, it is between the first interval (with the highest number of students) and the second interval. example: application for calculating the average for the alternative characteristic with answer variants: yes no. at the end of a school year, in a class, the situation of students' promotion is as follows: out of 30 students, 24 are promoted and 6 are not promoted. no. of promoted students no. of promoted students (%) = --------------------------= 24/30 = 80% total no. of students no. of failed students no. of failed students (%) = ----------------------= 6/30 = 20% total no. of students 3.2 the harmonic mean it is calculated as the inverse size of the arithmetic mean from the inverse values of the terms. a) simple: 𝑋h= 𝑛 ∑ 1 𝑥 ∙𝑓 , where n= number of series terms; x= characteristic variants. b) weighted: 𝑋h= ∑ 𝑓 ∑ 1 𝑥 ∙𝑓 , where f= frequencies (weights) x= characteristic variants. this average is used in different situations: calculation of the average harvest per "hectare" on a farm; calculating the average salary of a company, when the salary fund for different departments and the average salaries of employees are known. application: table 7. calculation of the average salary at s.c. fresh fruct s.r.l. compartments average salary / employee (𝑺) salary fund / lei (fs) sales administrative 2.200 2.500 110.000 80.000 total s.c. fresh fruct srl 190.000 (𝚺𝑭𝑺) the number of employees is at the sales department 50, and at administrative 32. the average salary on the company in 2018 was 2,317.06 lei. average salary per company is calculated: 𝑆= σ𝐹𝑆 σ𝑁 = σ𝐹𝑆 σ 1 𝑆1 ∙𝐹𝑆 = 190.000 50+32 = 190.000 82 =2.317,06 lei the number of employees is calculated taking into account the average salary by compartments: 𝑁𝑠= 𝐹𝑆 𝑆 = 1 𝑆 ·fs 7 in the "sales" section: 𝑁𝑎𝑛𝑔= 1 2.200 ·110.000 = 1.100 11 = 100 in the "administrative" section: 𝑁𝑎𝑛𝑔= 1 2.500 ·80.000 = 8000 125 = 64 3.3 the square mean it is calculated by extracting the square root from the arithmetic mean of the squared terms of the series. it is used to calculate the variation of the characteristic (mean square deviation) or when it is indicated to give importance to higher levels in a series of statistics [6]. calculation mode: a) for simple series: 𝑋p= √ ∑ 𝑋2 𝑛 b) for the frequency series: 𝑋p= √ ∑ 𝑋2𝑓 ∑ 𝑓 application: calculation of the average number of products made by a worker, who works according to a company with production activity. table 8. average number of products made by a worker workers no. of products (x) 1 2 3 4 12 18 10 20 total 60 (∑ 𝑿) if simple arithmetic mean is used, 𝑋a= ∑ 𝑋 ∑ 𝑛 = 60 4 =15, where: n = no. of variants workers x = characteristic variants if simple quadratic arithmetic mean is used, 𝑋p= √ ∑ 𝑋2 ∑ 𝑛 = √ 122+182+102+202 4 =√ 968 4 =√242~ 15,56 so, the average number of products made by a worker calculated according to the arithmetic average is 15, and according to the square average is 15.56. 3.4 the geometric mean it is based on the product relationship between the series terms and is used when the lower terms are given importance in the absolute value [7]. it is mainly used for the calculation of averages in the case of relative quantities of dynamics, respectively for establishing the average growth rate. the geometric mean is the value, which by replacing the terms of the series and the effect of their product, the resulting value is equal to the product of the terms, meaning: 𝑥1 ∙ 𝑥2·𝑥3 ∙ … ·𝑥𝑛 = π𝑥, where: 𝛱𝑥 = the product of the series terms. geometric mean: 𝑋𝑔= √π𝑥 𝑛 this average is used if there is a negative or zero term in the statistical series. 8 3.5 the chronologic mean it is used in the case of the statistical series of dynamics (chronological) for the calculation of the average level. 𝑋𝑐𝑟= 𝑥1 2 +𝑥2+𝑥3+ …+ 𝑥𝑛 2 𝑛−1 where: x = characteristic variants; n = number of terms. calculation mode: make the sum between half the value of the first term and the last term, with the full value of the other terms of the series; divide the total amount obtained by the number of series terms minus 1. a) simple: it is used in the case of the dynamic series of moments with equal intervals, usually for the statistical calculation of the average stock (goods, materials) application: table 9. the situation of the stock of goods at a store for the second quarter of 2018 period goods stock (lei) average stock april may june july 10.000 10.400 11.600 10.800 the average stock of goods in each month of the second quarter was 7,133.33 lei. average level of stock of goods = 10.000 2 +1 10.400 2 + 11.600 2 + 10.800 2 3 = 5.000+5.200+5.800+5.400 3 = = 21.400 3 =7.133,33 lei b) weighted in the case of dynamic series with unequal intervals. 𝑋𝑐𝑟= 𝑥1+𝑥2 2 ·𝑓1+ 𝑥2+𝑥3 2 ·𝑓2+⋯+ 𝑥𝑛−1+𝑥𝑛 2 ·𝑓𝑛 𝑓1+𝑓2+⋯+𝑓𝑛 applicațion: table 10. the situation of raw material stocks at a company with production activity in 2018 period good stock (lei) (x) january march july september december 16.000 (x1) 13.000 (x2) 10.000 (x3) 15.000 (x4) 12.000 (x5) time intervals (in months) are: 𝑓1 = 2 𝑓2 = 4 𝑓3 = 2 𝑓4 = 3 average annual stock = = 16.000+13.000 2 ∙2+ 13.000+10.000 2 ∙4+ 10.000+15.000 2 ∙2+ 15.000+12.000 2 ∙3 2+4+2+3 = 29.500+46.000+25.000+40.500 11 = 141.000 11 = 12.818,18 lei the average annual stock of raw materials for 2018 was 12,818.18 lei. 4 position sizes (indicators) they are used for distribution series. 9 4.1 the median represents the central value of a statistical series ordered ascending or descending, which divides the terms of the series into equal parts: half of the terms are smaller than the median and half are larger than the median. if the series has an odd number of terms, the median represents the value of the central term, which is calculated by the relation 𝑛+1 2 , 𝑛 = serial term number. example: statistical series 3,7,8,9,4,2,5, n = 7 place of the median = (7 + 1) / 2 = 8/2 = 4 the median is 9, ie the fourth term. if the series has an even number of terms, the value of the median is calculated as the arithmetic mean of the two central terms. example: statistical series in ascending order: 6,8,9,12,15,16 the median = 9+12 2 = 21 2 =10,5 the series has an odd number of terms, the series is ordered ascending: 5,5,6,7,7; the series has 5 terms, therefore the formula is used: (n+1) / 2 the place of the median is 5+1 2 =3 the median is 6, occupying the 3rd place (middle). application: the series has an even number of terms (4). the series is ordered in ascending order: 10,12,18,20. place of median between term 2 and 3: the median = 12+18 2 = 30 2 =15 4.2 the module represents the characteristic level that has the highest frequency. calculated only for frequency distribution statistical series. in table no. 1, the maximum frequency is 7, so the modulus, ie the corresponding value is 5 and 6 (averages of 5 and 6). in table no. 4, the highest frequency is 20, so the module corresponds to worker no. 4, which made this number of products (20). 5 conclusions the importance of the statistical calculation lies not only in the calculation of the arithmetic ratio of these indicators, but in the examples and their interpretation, from which the top-level management (managers) can come out to conclusions and arguments in order to correct the business evolution. the theoretical and practical presentation of these statistical indicators is addressed to practicing accountants, economists, students enrolled in an economic profile, departments of economic analysis within companies, as well as those interested in the introduction of the calculation methods and the interpretation of statistical indicators. references [1] anghelache, c., statistică teoretică și economică – teorie și aplicații, editura economică, 2004 [2] dorin, v., stan, f., statistică și analiză economică,editura cd press, bucurești, 2007; [3] ișfănescu, a, colectiv, analiza economico-financiară, editura ase, bucurești, 2002; 10 [4] isaic, m.a., colectiv, statistică – teorie și aplicații, editura cison, bucurești, 2006; [5] meșter, i. simuț, r., statistică economică – aplicații practice, editura universității din oradea, 2009; [6] meșter, i., silaghi, s., statistică economică – aplicații practice, editura universității din oradea, 2008; [7] wagner, p., colectiv, statistică, editura didactică și pedagogică, bucurești, 1995. medimond template 20 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 15 (2021) modern options for financing real estate investments chiriac cornel silviu1 1 faculty of economic sciences, agora university of oradea, oradea, romania e-mail silviuchiriac@yahoo.com abstract the realities of the period we live in with limited resources, uncertainties, speculations, radical upheavals, put their mark on the entities in many respects. the situation requires a rethinking of the business so that it can remain viable, to meet the needs of customers and to obtain a maximum profit. the decision-making process is one that thus outlines the major importance it has for each entity. the options that the entity can use to finance its investments are the objective of this material, our analysis aims to present the main characteristics of these options. keywords: investments, leasing, financial leasing, lease-back. 1 introduction the society of the third millennium is characterized by limited resources, uncertainties, speculation, radical upheavals. these situations have an impact on the entities in all the aspects that these processes involve. therefore, the new era may, more than ever, require a process of rethinking the business so that it can withstand the new conditions while meeting the needs of customers and making the most of it. therefore, more and more participants in economic life often end up rethinking their business. in this context, the performance capacity of an entity increasingly depends on the ability to make decisions, the decision-making process being very important. in contemporary economic theory, concepts such as: real estate investment, real estate or investment valuation are frequently used. these concepts have different meanings and characteristics for some professionals. the definition of these concepts, the classification and the methodology of valuing real estate investments are processes that raise some difficulties caused by the novelty of these concepts. 2 real estate financing options 2.1 mortgage loan for real estate investments a mortgage loan is a loan granted exclusively by authorized institutions, in compliance with the legal regulations in force in that country, for the acquisition or construction of real estate. thus, in countries such as the usa, germany, the united kingdom and others, mortgage banks are those institutions that grant long-term loans for real estate investments and the loans granted are secured by mortgages on real estate (căpraru et al., 2013:47). mortgage banks obtain financial resources by issuing specific securities, respectively, mortgage bonds that are sold on the secondary market of mortgage financing, being forbidden to attract deposits, obtaining income from commissions and interest charged on loans. but in countries like france or spain, mortgage banks are not the only institutions that issue mortgage bonds, they can also be issued by commercial banks (căpraru et al., 2013:47). in romania, law no. 32/2006, regulates the mortgage loan for real estate investments (căpraru et al., 2013:47). mailto:silviuchiriac@yahoo.com 21 the real estate market knows two main categories of real estate loans (căpraru et al., 2013:65): -fixed interest mortgages which are those loans whose interest rate does not vary over the repayment period, and remains fixed. thus, the loan rates are also fixed, and the debtor will know before how much he will pay to the bank during the repayment period; variable-rate mortgages are characterized by the fact that the interest rate may vary over the repayment period. it may increase or decrease, depending on the default benchmark (euribor, libor, robor). variable interest loans are disadvantageous to the client in that a possible increase in the level of the index could lead to an increase in the level of the loan rate. the higher the growth and the longer it lasts, the lower the likelihood that it will pay off credit rates. of course, for the bank, the variability of the interest rate is favorable and the rate on loans is adjusted to the market interest rate, but to the extent that the client will be able to keep up with the payment of monthly loan installments. otherwise, the loan may become non-performing, which is why the bank will perform a stress test for each client and will corroborate its results with the degree of indebtedness and repayment capacity after which the client will qualify or not as eligible. 2.2 development of a real estate project through a bank in the opinion of the authors căpraru and onofreis (căpraru et al., 2013:72), in the context of the development of a project financed through a bank, which would contribute to ensuring the success of obtaining this financing, the following general principles are considered: -establishing a new company for the purpose of independent project development; attracting investors to partially support the project and to participate in the establishment of the new project company; guaranteeing the financing of the project with the assets of the established project, and not with the assets of another business; -consider as a primary source of repayment the financing the cash flow generated by the financed project, in no case other sources obtained from other older businesses carried out. usually, in the context of developing a project proposed for financing (such as, for example, a commercial real estate), the newly established project company with the contribution of already selected investors who will partially contribute to the financing of the project has to establish first collaboration relations. with a number of partners involved in the project, before proposing the project for financing to the bank (căpraru et al., 2013:73). these would be: a general contractor for construction, a works supervisor, who will represent his interests in the relationship with the general contractor and who will monitor the costs and quality of works, an insurer (insurance company) to insure the project in case of events that could disrupt the progress of the work. in the case of the development of residential complexes, the bank can participate through financing offers for the clients of the future project, offering them real estate loans. 2.3 non-reimbursable financing for investment projects one of the recent external financing options available to entities is that relating to accessing european funds to finance real estate investments. european funds, according to geo no. 63/1999 on the management of non-reimbursable funds allocated to romania by the european community, as well as their co-financing funds, are defined as the financial contribution of the european union, represented by amounts transferred to the government of romania by the commission of the european union with the title of non-reimbursable financial 22 assistance. the structural funds are post-accession funds funded by the european union budget, which aim to support member states in areas of interest such as: education, research, agriculture, sme development, etc (ceccar, 2011:54). real estate investments that are eligible for funding from european funds mainly aim at the regeneration of disadvantaged areas, investments in the real estate infrastructure of smes and the various investments materialized in: rehabilitation of buildings, ensemble of buildings, modernizations, restorations, etc. 2.4 real estate leasing leasing, as a complex concept, has encountered over time several types of formulations, each trying to emphasize the common aspects of this phenomenon. the difference between the concepts can be seen concretely when the perspectives by which the lease is defined are different. the economic outlook approaches leasing as a financing activity concluded on the basis of a leasing contract, whereby the funds necessary for the investment are guaranteed by the financier. basically, the one who rents the property (owner) allows the user (tenant) to use a certain property provided that he pays a series of payments (leasing rate) for the entire duration of the lease. the financial benefits related to the lease do not arise from the ownership of the good but from its use. the user is the one who establishes the good and the related specifications (brand, model, manufacturer, installation, warranty, service, delivery, etc.), negotiates the price with the owner and then concludes the lease, specifying the duration of the contract, leasing rates and other optional considerations. the legal perspective defines leasing as a complex contract that allows the user to purchase a good without immediately paying its price. the romanian legislative framework does not provide a concrete approach to the lease term but defines the leasing operation as that operation by which a party, called the lessor, undertakes at the request of another party, called the lessee (user), to buy or take over to a third party, called a supplier, a certain movable or immovable property, and then to transfer to the user the right to use it in exchange for a monthly payment called royalty, for the purpose of using, or, as the case may be, purchasing the property (ordonanța 51/97). from the beneficiary's point of view, leasing is a form of lending according to which the value necessary for the purchase of the good is achieved through its use, its repayment is made in installments, in the form of leasing rates and, finally, the residual value. in this case, the lease appears as a sale in installments, in which the ownership is transferred with the payment of the residual value. from the point of view of the leasing company, the lease determines the purchase of a good in order to be rented, aiming at transforming the lease into a sale. buy at the end of the contract, after the related rent and the residual value have been paid. the purpose of the leasing operation (with the transfer of the property to the user) is similar to that of the sale-purchase with payment in installments, but the difference appears from the perspective of the transfer as follows: money, while leasing assigns the right to use the property. the first attempts for definition attributed to leasing are found in french literature, but the definition addresses the concept of real estate leasing (credit-bail), and refers to the fact that an economic unit can lease real estate, built on its own or bought, having as an objective its use by the lessee and implicitly the possibility of the purchase of the good by him. the german tax circulars of 1971 and 1972 complete the concept of leasing, but not entirely, what appears new compared to existing concepts is the determined duration of the contract 23 and the inclusion in the royalty paid by the user, in addition to the acquisition cost, of all additional expenses financing unit. leasing has its origins in antiquity in this way: around 210 bc, the owners of agricultural tools in the samaritan town of ur rented the goods of the farmers who needed them and recorded their records on clay plates. thus, people have noticed that the benefits generated by a good do not arise from ownership of the good, but from its use. the first forms of leasing took place in the united states, in the late nineteenth century, when telephones were rented to customers under a contract called a "lease." in 1936 the owner of "safe stores inc." bought a land on which he built a huge store, but needed capital to continue, so he sold his store to a group of investors, who later re-leased it to the former owner on a "lease" basis. this type of operation is called sale and lease-back. the united states strongly encouraged this type of activity, offering multiple tax advantages that led in 1950 to the employment of more than 150 higher education institutions in lease-back transactions. at the time, the backers were the insurance companies. financial leasing appeared in the middle of the 20th century, due to the need for a manager to place an important order for food but without the necessary equipment. the person in question, d. p. bootle, decided to rent the equipment he needed in order to honor his order. this moment of bootle's brilliance would lead to the emergence of an entire leasing industry. this experience led bootle to set up his own leasing company, us leasing corporation, and then, together with his partner schoenfeld, set up the first company specializing in furniture leasing operations, which is still active in the leasing market today. the two have historically been known as the "founders" of leasing. banks were the ones who centrally encouraged and supported the leasing of industrial equipment, and in 1963 the banks also received authorization to carry out leasing operations. the first banking network to operate on the leasing market was national banks, followed by bank holding companies, and by 1975 they had been authorized to conduct leasing operations directly in 41 us states. the rapid expansion of leasing in the us was mainly due to the fiscal facilities granted but also to a growing economy. this trend was also taken over in continental europe, the united kingdom being the first country to adopt this activity, being strongly supported by credit institutions. western countries have also adopted the phenomenon, each imposing its own legal regulations. leaseurope was established in 1972, the european federation of leasing companies, which came to include 25 affiliated countries and 1054 member institutions in 1993. today the federation has expanded to 32 countries and controls about 80% of the european leasing industry. in romania, the first leasing company was established in 1994, and the first leasing regulations appeared in 1995, and in the following year the national union of leasing companies-unslr was established. the year 1997 marks the adoption of the first law specific to leasing operations og 51/1997. financial leasing is a strong starting point for financing companies that want to buy goods but do not have the necessary financial resources to purchase them. this financing activity helps economic agents who do not have the possibility to attract loans from banks, or do not want to encumber their assets, whether movable or immovable, by setting up mortgages or pledges. leasing, as a way of financing, primarily aims at economic agents that seek to expand the activity and improve economic performance, and in general aims at technical optimization. the user's decision on the purchase of a good must take into account, in addition to the net cost of purchase, a number of elements that influence its size: the discount factor, additional costs specific to each type of purchase, taxation and compulsory insurance required. 24 a sale and leaseback transaction involves the sale of an asset owned by an economic operator to a specialist company and the leasing of the same asset to the original seller. sales price and leasing rates are interdependent variables because they are negotiated together. the accounting treatment of these transactions differs depending on the lease that is concluded. if the sale and leaseback transaction has as its purpose a financial leasing, it is a means by which the lessor grants financing to the lessee, the negotiated property having the role of guarantee. the difference between the sale price and the carrying amount of the good must not be recognized immediately as income in the lessee's financial statements, it is deferred and amortized over the term of the finance lease. on the other hand, if the result of the transaction is an operating lease, the asset is sold at fair value, and the difference between fair value and carrying amount will be recognized immediately as profit or loss, as the case may be. if the price at which the good is sold is less than the fair value, the loss will be recognized immediately, unless the loss is offset by lower future leasing rates (below market price), it will also be deferred and amortized in proportion to leasing rate, for the entire duration of the contract. a price higher than fair value involves the same deferral and amortization mechanism as loss. if at the time of the transaction, as a result of an operating lease, the fair value is less than the carrying amount, the difference will be recorded as an adjustment for impairment. in the case of financial leasing, the book value will be reduced only if there are signs of depreciation of the asset, but up to its recoverable amount. in practice, there are different ways of carrying out and financing financial leasing operations, in the following lines we have presented the main types encountered. the classic financing operation this assumes that the lender has sufficient liquidity to purchase the asset that will be the subject of the lease, and the leasing rate will also include interest, which will cover the risk of the amounts involved. the interest will be set in a way that is attractive to the user, but proportionate to the interest on a loan if the user purchases the good through a loan. schematically this operation can be presented as follows: figure 1. the classic financing scheme of the leasing operation external credit financing delivers the good 25 this type of financing is the most widely used in practice and is due to the fact that the leasing company does not have the necessary liquidity to cover the entire volume of leasing operations. financing is based on sources attracted, generally from banks, where the interest charged by the bank is transferred within the leasing rates that the user has to pay. figure 2. external credit financing scheme direct financing operation from the supplier this type of operation presupposes that the supplier is the producer of the good, at the same time being the leasing company that concludes the leasing operation. it is the simplest way to finance. figure 3. scheme of direct financing from the supplier supplier credit financing operation in this situation, the supplier sells the leasing company's assets on credit, and will recover the value of the investment as the user pays the leasing rates. figure 4. supplier credit financing scheme the bank credits 26 leaseback financing operation in this financing operation intervene only two parties, the beneficiary-seller and the leasing company, that are involved in this type of financing. the operation involves the sale of the property that will be the object of the leasing contract by the beneficiary to the leasing company, then moistening its lease to the owner who initiated the sale. at the end of the contract, the good is returned to the beneficiary's possession after the payment of the residual value. figure 5. leasing financing scheme similar to financial leasing is the shareholder leasing, the difference is that the beneficiary does not sell goods but own shares of his company to an investment fund. these will be leased through a lease set out in the lease, and the shares will be redeemed at the end of the lease. the "leasing leverage" financing operation this operation is specific to high-value assets, such as air transport, and refers to the fact that the leasing company cannot fully cover the cost of financing, the difference in financing being obtained from various creditors, which they will recover their investment through a certain perceived interest as well as from the advance and the leasing rates. the guarantee offered to the creditors is the good that is the object of the leasing contract. figure 6. "leasing leverage" financing scheme 27 3 conclusions a mortgage loan is a loan granted exclusively by institutions authorized for the acquisition or construction of real estate. mortgage banks obtain financial resources by issuing specific securities, respectively, mortgage bonds that are sold on the secondary market of mortgage financing, being forbidden to attract deposits, obtaining income from commissions and interest charged on loans. the real estate market has two main categories of real estate loans: fixed rate mortgages and variable rate mortgages. development of real estate project financed through a bank, general principles regarding the establishment of a new company for the development of the project, attracting investors, guaranteeing the financing of the project with the assets of the established project and considering as a primary source of financing the flow of cash generated by the funded project. one of the recent external financing options available to entities is that of accessing european funds to finance real estate investments. investments in real estate that can use this form of financing are mainly aimed at regenerating disadvantaged areas, investments in real estate infrastructure of smes and various investments materialized in: rehabilitation of buildings, or set of buildings, modernizations, restorations, etc. leasing is a strong starting point in financing entities that want to purchase goods but do not have the necessary financial resources to purchase them. this financing activity is offered to entities that do not have the possibility to attract loans from banks, or do not want to encumber their assets, whether movable or immovable, by setting up mortgages or pledges. leasing, as a way of financing, primarily targets entities that seek to expand the business and improve economic performance, and generally aims at technical optimization. the user's decision on the purchase of a good must take into account in addition to the net cost of purchase and a number of elements that influence its size: the discount factor, additional costs specific to each type of purchase, taxation and mandatory insurance required. it can be seen that leasing is similar to investment credit, even if the user does not immediately become the owner of the property. the financier regards leasing as a loan for a certain period, guaranteed by the property right, and the user as a form of credit through which the good generates the purchase value through its use, thus the credit obtained is material and not monetary. cash payment can be considered the ideal form of acquiring a good, but as opposed to financial leasing, it coins the full existence of the liquidity needed for the purchase. the advantage that appears in this way of purchase is that the user becomes the owner of the purchased good at the time of delivery. it is true that cash acquisition leads to a lower financial effort compared to leasing. it is true that the purchase of cash leads to a lower financial effort compared to leasing, but it presupposes the existence of own funds made from previous actions and not those resulting from the exploitation of the good. it is noted that the only advantage offered by the lease is the non-existence of the time gap between the time of payment and the deduction of expenses, and the fact that it does not require the full existence of liquidity for the purchase of the good. summarizing the above, we can see that the advantages and disadvantages of leasing are different for each of the three participants in the leasing operation, giving different importance depending on their needs and requirements. the beneficiary will choose the financing through leasing according to how much he can negotiate the payment of the lease installments or if he has the possibility to use the good even after concluding the lease contract, based on lower rents (if he does not want to buy the good, paying the residual value). at the same time, the fact that he may have access to more 28 advanced technologies through which he can develop his activity, or the lack of guarantees should be important considerations in the leasing decision. the leasing company, the one that finances, first of all pursues the additional gains that may arise from the re-leasing or resale of the goods that were the subject of a leasing contract. thus we can say that the leasing company tends to keep the property right over the good, in order to exploit it later. the supplier will always try to attract new customers and beneficiaries through leasing operations, in order to increase its sales, it will also try to overcome the possible difficulties related to the import legislation, if they opt for an import good. promoting high quality goods and high prices that will lead to higher profitability is another way to show the importance of leasing to the supplier. references [1] achim m.v., analiză economico-financiară, editura risoprint, cluj-napoca, 2010 [2] andronic c., performanţa firmei, editura polirom, iaşi, 2000 [3] anghel i (coord.), evaluarea întreprinderii, editura economică, bucurești, 2010 [4] anghel i., onofrei m., dezvoltarea imobiliară – analiză şi principii, editura economică, bucureşti, 2013 [5] anghelache c., statistica teoretică şi economică, editura economică, bucureşti, 2004 [6] armeanu d, enciu a., poanta d., proprietăţi ale criteriilor de selecţie a proiectelor de investiţii în mediul incert, economie teoretică şi aplicată, volumul xviii (2011), no. 7(560) [7] bădescu g, oancea-negescu m.d. analiza investiţiilor imobiliare, editura economică, bucureşti, 2009 [8] bistriceanu gh. d, adochiţei m.n., negrea e., finanţele agenţilor economici, editura economică, bucureşti, 2001 [9] căpraru b., onofrei m., investiţii imobiliare – fundamente, practici şi studii de caz, editura c.h. beck, bucureşti, 2013 [10] căruntu c., lăpăduşi m. standarde internaţionale de raportare financiară viziune de ansamblu asupra adoptării şi aplicării acestora la nivelul firmei. în: analele universităţii „constantin brăncuşi”, târgu – jiu, 2011 [11] ceccar, ghid privind accesarea, contabilitatea, fiscalitatea, auditul şi managementul proiectelor cu finanare europeană, editura ceccar, bucureşti, 2011 [12] ciobanu a., analiza performanţei întreprinderii, editura ase, bucureşti, 2006 [13] jianu i., evaluarea, prezentarea şi analiza performanţei întreprinderii, editura ceccar, bucureşti, 2007 [14] matiş d., timbuş r.(coord), evaluarea proprietăţilor imobiliare, editura risoprint, cluj-napoca, 2013 [15] onofrei m., finanţele întreprinderii, editura economică, bucureşti, 2004 [16] peumans h.. ,valoarea proiectelor investiţionale, deusto, 1967 [17] stan s., anghel i, (coord) – evaluarea întreprinderii, ediţia a cincea revizuită, editura iroval, bucureşti, 2013 [18] stoian m., gestiunea investiţiilor, bucureşti, editura a.s.e., 2003 [19] vintilă n., evaluarea şi finanţarea investiţiilor directe, editura ase, bucureşti, 2009 agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol. 13 (2019) the role and functions of public finances in perspective cristina ioana antik1 1 agora university of oradea, tineretului square str., no. 8, oradea, romania e-mail antikcristina@yahoo.com abstract the emergence of public finances is due to objectively determined needs and causes, their main function being to procure the financial resources needed by the state to exercise its responsibilities and, in this way, to intervene in the economy and society in general. public finances are necessary, subjectively and objectively, because they contribute to the accomplishment of the tasks and functions of the state, which could not be accomplished without the financial leverage. public finances are indispensable related to the existence of the state, and to the role of the public sector in the economy. thus, they express social relations, of economic nature that arise in the process of establishing and using public financial resources between the state, on the one hand, and the members of society on the other hand, in order to meet the general interest needs of society. thus, the role of public finances is to meet needs of general interest, or collective needs. keywords: public, finances, role, function, state. 1 introduction as a generalized expression of a certain group of processes and economic relations, public finances have to fulfill a certain social mission, in the sense that through them certain economic and social processes are carried out and play an important role by contributing to the achievement of private or economic objectives. general development of society, including the performance of various economic and social activities. the concept of function assigned to public finances designates their ability to mediate (under optimal conditions) the direct realization of certain economic processes expressed in monetary form and the development of appropriate relations between participants, as well as influencing the way they are carried out. most often, the fulfillment of public finance functions is materialized in the formation, distribution and use of public funds (financial) resources in the context of economic and social activities in which public authorities are involved. 2 the functions of public finances the specialized literature retains, most often, as functions assigned to public finances the distribution function and the control function, to which is sometimes added a function of regulating the economy, each of them mediating economic processes of distribution of a part of gdp. , achieving financial control, respectively stimulating the development of positive phenomena or counteracting negative phenomena in the economy and society [1]. three functions are assigned to public finances, namely: the function of distribution (or distribution) of resources; control function; the function of stabilizing (regulating) the economy. the distribution function appears as a component of the distribution one, meaning the mediation by the public finances of some processes of redistribution of resources between the natural and legal persons, with the involvement of the public authorities. this function is manifested by mailto:antikcristina@yahoo.com 2 taking over from public funds some parts of the income or assets of various individuals or legal entities in the form of taxes, fees, etc., and then distributing them in the form of public expenditures made according to criteria of equity or social justice. by default, its fulfillment materializes in the redistribution of a part of the gdp between the members of the society [2]. public finances also manifest themselves as a mediator of exercising control over money over various aspects of economic and social life. their ability to mediate the monetary-financial control over the development and results of different economic and social activities defines their control function. thus, the management of resources, in general, and financial ones, in particular, requires as accurate records as possible, on their existence and movement, knowledge and monitoring of their formation and use, ensuring maximum positive results, including compliance with certain management principles. and the regulations regarding the financial activity at the level of each entity or functional structure. in this context, public finances are also meant to mediate the exercise of monetary control over certain areas of economic and social activity by fulfilling the function of control. the stabilization function expresses the mediation by public finances of stabilizing influences on the evolution of economic and social life, thus having the ability to contribute to ensuring price stability, a high degree of employment, maintaining balance in relations thus helping to maintain an acceptable pace of balanced economic growth. 2.1 the function of public finances for the distribution of gross domestic product the function of the public finances of gdp distribution expresses their capacity to mediate the distribution in monetary form of the product created in the material activities, as a premise of accomplishing this process and in material form, to satisfy the needs of public consumption. in this function, public finances ensure the distribution and redistribution in cash of a large part of this product, and first of all, the redistribution of primary revenues achieved in the first phase of distribution, by individuals and legal entities, in favor of public authorities or entities. the manifestation of finances in this function implies, implicitly, the realization of financial flows aiming at the establishment of public funds and their distribution at various levels of the organization and functioning of the company. in terms of the processes of distribution and redistribution in monetary form of the national product, materialized by the financial flows (corresponding), the fulfillment of this function of public finances involves two phases (sides), namely: setting up (public) funds at the disposal of public authorities and entities; distribution on adequate destinations of the respective funds for the achievement of public objectives and actions. the two phases of the distribution function represent two moments of the same process, between them there are close links, of interconditioning. thus, the first phase is manifested by the mobilization of financial resources at the disposal of the state, respectively of public entities and the formation of their financial funds, not as an end in itself, but in accordance with the needs to be met, materialized by the destinations to be be given to the mobilized resources. the second phase involves the distribution by destination of the public funds established, being inevitably conditioned by the previous development of the processes of mobilization of resources to these funds, in the amount and moments imposed by the needs to be met. logically, it is acceptable that the procurement of money resources to public financial funds, in the manifestation of this function, is justified only in terms of directing them to meet specific public needs, and the distribution and use of such funds can take place only if , previously, the respective funds were set up. within the interdependence relations between these two phases of the distribution function, each fulfills both the role of determining factor and that of determined factor. thus, the establishment of funds, in the first phase, is objectively determined by the existence and size of 3 the financial resources needs assumed to be satisfied at the level of the respective entities as an expression of the second phase. these needs concretize, moreover, the destinations that must be given to the funds set up, depending on the actions, respectively the activities for the realization of which the resources that are accumulated in the first phase are consumed. therefore, the size and types of public funds that are constituted, in the first phase, depend directly on the destinations that will be given by their distribution and spending, in the second phase, which implies the need to correlate the dimensions of the needs to be covered with possible resources to be procured. however, the proportions of these processes of constituting public funds have an objective basis given by the real dimensions of the realized national product, although sometimes parts of the national wealth are used in the same framework. in its turn, the way of setting up the public money funds conditions, objectively and directly, the accomplishment of the second phase, first of all through the dimensions at which the accomplishment of the processes corresponding to the latter is ensured. thus, the distribution processes can be carried out only to the extent that the funds were created in the first phase of the distribution function. at the same time, the destination given to the money resources is dependent on the evolution of the constitution process, as dynamics and sources of formation of public funds. at the same time, we find that the interdependence of the two phases is amplified by the fact that the resulting destinations, in this second phase, include the possibility of creating favorable premises for the establishment (or non-establishment) of financial funds in the first phase. in this sense, it is typical the financing from public funds of some economic objectives that put into operation a national product, as a new value subject to the distribution and mobilization of new financial resources. or, if the dimensions of the allocation of resources with such destinations are larger, the processes of constitution and distribution of public financial funds are intertwined and condition each other to a greater extent. viewed at the macroeconomic level (in terms of public finances) the processes characteristic of the financial flows of establishment, respectively distribution and use of funds within the distribution function are dependent on those in which gdp is created subject to distribution, including public finances. thus, the product created and distributed in monetary form becomes the source of financial resources that later reach consumers and become a solvent demand addressed to the market and thus to the sphere of production, generating new values. the value distribution of the created product takes specific forms of money distribution, firstly, by making income in money by the participants in the directly productive processes, and secondly by establishing and then distributing financial funds at the disposal of public entities, respectively the state. . it should be noted, however, that the distribution of the product created in both phases is achieved by other means than financial ones. the financial forms through which the establishment, distribution and use of public funds by different public entities, including by the state, materialize differ significantly in time and space, meaning allocations or withdrawals of resources from and to the respective funds. by allocating parts of these funds to meet various consumption needs, those entities meet their own consumption needs in the form of goods and services in a natural-material form. the aggregate consumption demand itself also includes the one formed on account of financial resources, addressing the sphere of production, in order to create goods and services of the appropriate size and structure. thus, the accomplishment of the distribution function that belongs to the public finances is intertwined with the processes of creation, distribution and use of the national product in natural-material form, highlighting the interaction between the cash-financial flows and the real ones. first, financial inflows into public funds can have various sources of money (including 4 financial markets), just as (financial) outflows include a multitude of destinations given to money resources. the participants in the relations and financial flows characteristic of this function of public finances are public entities, respectively the state and natural or legal persons, either as taxpayers in setting up various public financial funds, or as direct or indirect beneficiaries of financial resources distributed from these funds. in the phase of setting up the financial funds, the natural and legal persons or the economicsocial entities transfer parts of their resources or incomes, in order to set up funds at the disposal of the different public entities or authorities. in the distribution phase, the participants in the respective financial relations directly or indirectly benefit from sums of money or social utilities at the expense of the expenses financed from these public funds. the main forms under which it is made are: taxes, fees, mandatory contributions, penalties, fines, royalties, revenues made by public institutions, state loans, financial aid, donations to the state. in their turn, the forms under which the phase of distribution of public financial funds materializes, within the same function are, mainly, public expenditures, which are differentiated on specific fields and actions (education, health, social protection, national defense, public order, etc). . they take forms of the expenses related to the creation of the material base of the public entities or of those of their functioning, cash resources as well as on the one of the personnel expenses. they are assimilated to the allocations from public funds, representing amounts of money transferred in favor of natural or legal persons, also known as subsidies. as an expression of the distribution function, the processes of constitution and distribution of financial funds have an objective character, but the technical modalities under which these processes are carried out, including the mentioned forms, have a subjective character. they are established by decisions adopted by the management and administration bodies of the various entities under the impact of the policies promoted at one time or another [4]. 2.2 the function of public finances to control economic and social activities the recognition of the control function of public finances has objective support in the fact that the manifestation of financial phenomena creates the necessary framework for the execution of financial control. by comparison, the work of financial control performed by certain persons who fulfill, within the created legal framework, administrative functions that confer attributions of financial controller’s imprints on this control a subjective component. the objective side of control through public finances lies in the fact that it can be performed by persons appointed to perform such control work where, in the foreground, processes and financial relations take place in which public authorities or entities are directly or indirectly involved, respectively public resources. the exercise of control through public finances therefore presupposes in an objective plan the existence, as its support, of public financial relations, including the development of activities based on the use of money with impact on the formation and use of public money resources, implicitly assuming the distribution function. two of its phases. naturally, the financial control considered as an expression of the fulfillment of this control function, is grafted on the operations and the monetary relations regarding the constitution and distribution of the public financial funds. therefore, between the two functions of public finances there are certain relations of determination, highlighting in the foreground the fact that the financial activity that materializes the distribution function provides the ground for the execution of financial control. on the other hand, the fulfillment of the financial control function favors the manifestation of the distribution function, including in the sense of generating new processes of constitution or distribution of public funds. 5 at the same time, it should be noted that, necessarily, the sphere of manifestation of the control function, although based on the manifestation of the distribution function, has larger dimensions, extending to other economic and social processes in interconditioning relations with those financial. from this point of view, there are two main categories of material processes included in the scope of the control function compared to the distribution one, namely: those consuming financial resources; respectively those generating new value and implicitly new financial resources. from this perspective, the exercise of financial control through public finances includes not only the sphere of distribution but also those of production, circulation and consumption, as in each of them processes are consumed or generate financial resources. thus, for example, financial control is exercised over production, because in this phase the values are created, which are subject to exchange and consumption, as well as the added value, which is subject to financial distribution, targeting expenses, revenues and results recorded. similarly, in the consumption phase, financial control aims at the structure, proportions, opportunity and efficiency of expenditures materialized in the intermediate and final consumption of public entities. on a broader level, expressing the ability of finance to mediate the exercise of control through money, based on financial relations, it is also known as monetary control involving the manifestation of money in their functions. thus, for example, the level of costs, the volume of investments, the value of goods production, the amount of profit, etc. it is evaluated by using money in its function of measuring (standard) value, but by the function of controlling finances it analyzes the correlations that are established between different value indicators for choosing the advantageous options for achieving objectives or actions. concerned. particularly important is the fulfillment of the function of money as a means of preserving or reserving the value that intertwines with the control function of public finances (especially), by monitoring and analyzing the processes of accumulation of money resources in centralized and decentralized public funds, respectively control over the mode of administration and the efficiency of their use. the fulfillment of the control function of public finances presupposes the creation of the adequate organizational framework, including the structures and regulations regarding the functioning of the control bodies in relation to the content of the economic and social activities subject to control. in this sense, the financial control can be exercised both from inside the public entities and from outside, through specialized institutions, distinguishing, as forms, the internal control and the external control. internal financial control is integrated into the functional structures of public economic and social entities, most often in the form of current preventive and operational control, especially at the level of operational structures. in turn, the external financial control is based on the creation and operation of institutions or bodies specialized in its exercise usually located at the level of other administrative structures than that of the entities subject to control, and within it, the central place belongs to state financial control. through bodies of the ministry of finance (public), respectively of the court of accounts, etc. 2.3 the function of public finances to stabilize the economy the existence of such a function of public finances is part of the context of the assumption by the state or other public bodies of an active role in the economy, either by indirect involvement in economic actions, or indirectly by influencing private economic activities. in both cases, however, this function outlines the manifestation of public finances as a means of influencing economic and social life and especially the economy in accordance with the general policy objectives promoted by public authorities. 6 by fulfilling this function, public finances mediate the counteracting of destabilizing phenomena (recession, crisis, unemployment, etc.) that disrupt the economic and social processes on the one hand, respectively stimulating the positive evolution of these processes, on the other hand. it is noteworthy that the development of modern theory of public finance by recognizing their possible stabilizing impact on the market economy subject to specific factors, which disrupts its imperfect mechanisms, provides scientific support for the realization of this function through appropriate public financial policies [5]. on the other hand, the quantitative and qualitative dimensions of new value-creating material processes are interconditioned with those of the formation and use of public financial resources. the possible regulatory impact of public finances on economic and social activities can be summarized in the following main directions: countercyclical adjustment or stabilization; stimulating economic expansion (growth); modernization, restructuring and adaptation of the economy to the requirements of the internal and external market. under the first aspect, the manifestation of this function consists in the use of public financial techniques and instruments as means for counteracting the economic crisis as a real or possible phenomenon, and of the unemployment that accompanies it, seeking to ensure a certain stabilization of production and employment. respectively, the attenuation of the cyclical oscillations, determined by the alternation of the periods of prosperity with those of economic decline. it involves financial facilities or restrictions designed to help avoid major syncopes. the second aspect aims at using financial techniques and instruments as propelling factors of economic activities, by stimulating investments and boosting the growth rate of production ensuring not only the relaunch of the economy or combating the growth slowdown, but also its expansion. under the third mentioned aspect that considers the involvement of public finances through specific techniques and tools for the processes of modernization and restructuring of national economies, either supporting the efforts of private economic agents or developing directly within the public sector, certain segments, branches or sub-branches either by restricting another and by ensuring that it adapts to the evolution of demand in the internal and external markets. the regulatory impact of public finances, based on the interaction of material processes with financial ones, is reflected in economic and financial variables whose dimensions condition the achievement of objectives, and the main tools used for this purpose are taxes, public spending, public budget. thus, for example, as objective premises of the regulation of the economy through public finances must be considered the interrelationships dependent on total income, composed of disposable income and tax on the one hand, with the size of total consumption (expenditure), structured in personal consumption and investments, on the other part, according to the following relations: v t = v d + t (1) ct = c p + i (2) where: v t = total income; v d = disposable income; t = taxes, fees, contributions; ct= total consumption; cp= personal consumption; i = investments. from the equalization of the two relations, in the form vt = ct, derives the correlation of the structural variables, reaching the finding of specific interactions, both between the two relations 7 and between the variables included in them. among these, it is obvious the indirect conditioning between the variables such as tax and investments in the sense that the change of the size of the former favors the change in the opposite direction of the latter. in conclusion, the regulation of the economy through taxes involves the adaptation of the size of the tax to the total income with its impact on disposable income and thus on the volume of investments. thus, if there is a trend of stagnation or recession, the recovery of the economy is possible by reducing the proportion of taxes, which will lead to increased disposable income, much of which can become a source of financing for investment. this resizing of the size of taxes becomes a premise for increasing investment and production capacity, including the creation of a large number of jobs and a significant reduction in unemployment. such an intervention through financial means is specific to the situation when there is a decline in economic activities, accompanied by the restriction of private investment and the increase in the number of unemployed in the total active population. on the contrary, admitting that there is a too accelerated pace of production (which corresponds to a small number of unemployed), which threatens to overheat the economy and create the conditions for its decline, it becomes possible to regulate in the opposite direction by raising taxes, reducing income available, private investment and production and thus moderating the too high rate of economic growth. similarly, but adapted to the content of specific processes, there is also regulatory intervention through public spending, considered a financial variable with an impact on the size of total consumption, aggregate demand and thus on supply. it materializes through adaptations of their size and structure, depending on the requirements of ensuring an upward, continuous evolution of the economy. the regulatory impact lies in the fact that an increase in budget expenditures, both an increase in public final consumption demand and public investment, can lead to an increase in investment, production and therefore the economy in periods when there are decreases of greater proportions. its large. in contrast, the option to reduce public spending results slowing down the pace of economic activities and, implicitly, attenuating cyclical oscillations in the opposite direction. in the same context, the regulatory action promoted by public finances includes the use of the public budget, by accepting the budget deficit and its financing from extraordinary resources, in the phases of economic decline, this becoming a factor of economic recovery and growth. 3 conclusions public positions have appeared with the evolution of society and are part of the objective process of the evolution of human society and requires the existence of minimum conditions to be able to manifest the character of economic relations. the conditions that made necessary and possible the appearance of public positions were: − the emergence and development of commodity-money relations able to allow the formation and use of state resources in monetary form; − the emergence of the state, which for the exercise of functions and tasks internally and externally, needed significant financial resources, which could not be procured in the commodity-money relations. following the historical evolution of finances based on the two conditions, it was concluded that public finances appeared with the arrangement of the primitive commune. this period did not know the appearance of the state or the monetary relations, and the economy had a deeply natural character. in the absence of the state, public functions were performed by people elected from among the community. the public authorities did not have a special coercive apparatus. as the production process developed, which was marked by the social division of labor, there was an increase in labor 8 productivity, an increase in production, and the development of exchange. production, exceeding individual consumption needs, determined the emergence of private property, the emergence of wealth inequalities and the division of society into social classes. in this way arose the need for an institution to protect the private property and privileges of wealthy people. this institution is the state that has played several forms in society over time. thus, as a final conclusion, i consider that the state is as that form of organization, an institution through which political power is exercised within the limits of a certain territory by a group of organized people who impose their will and interests on society. references [1] beleanu pavel şi anghelache gabriela , finanţe publice, editura economică 2005; [2] inceu adrian, pop florin, lazar dan, elemente definanţe publice, c.f.c.i.d., presa universitara clujeana, cluj-napoca, 2000; [3] moşteanu tatiana , finanţe publice, editura universitară 2005, [4] talpoş ioan, finantele romaniei, ed. sedona, timisoara, 1996 ; [5] văcărel, iulian, finanţe publice, editura didactică şi pedagogică, bucureşti, 2007 the european funds and their economical effects in romania agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol 10 (2016) 21 the european funds and their economical effects in romania liliana marcela durgheu 1 , rica ivan 2 abstract: the absorption of the communitarian funds constitutes an objective on its own in the post-adherence strategy, taking into consideration the huge contribution that these funds will have in the recovery of the gap between our country and the other european union member states. using the european policy of cohesion, the access to these financial resources represents one of the main economical benefits. key words: european funds, european union, pnd, operational programs introduction: nowadays, the european union is going through a period of identity redefinition and of its internal cohesion, in the context of the necessity of acknowledging itself as a competitive and dynamic actor in a continuously globalizing world, having as a background the “digestion” of the fifth wave of extension, started in 2004 with ten states and ended with romania’s and bulgaria’s adherence on the 1 st of january 2007. the union goes through a process of reconnection with its own citizens and of regaining their sustaining for the european political project based on their preoccupations, at the beginning of the 21 st century, perceived differently in comparison with the ones in the previous century. the union has to face the challenge of permanently adapting to the changes generated by a series of factors, internal ones (the integration’s deepening parallel with the extension, the aging and the decrease of the population number, the necessity of adapting to the european unions’ institutions, the efficiency, the transparency and the decision’s legitimacy at a communitarian level, the communication with its own citizens) as well as external ones (the world crises of the natural resources and of the raw materials, the competition coming from the other poles of power, but not only, the terrorist threat, threats regarding the environment, such as: climate changes, natural disasters, diseases, etc ). 1 chamber of accounts, bihor address: chamber of accounts, str. roman ciorogariu, no.65, oradea, romania, e-mail: ldurgheu@yahoo.com 2 faculty of electrical engineering and information technology, head of control systems engineering and management department university of oradea university of oradea, oradea, romania correspondence: rica ivan, university of oradea, postal address (1, university street, oradea, romania) e-mail: rika_ivan 2005@yahoo.com 22 in conclusion, the european union is a continuously moving construction in an internationa context characterized by a profound dynamics. thus, romania’s profile takes into consideration the existent opportunities, having as a goal the decrease of the typical vulnerability of a new member state of the european union a coherent policy’s accession of a coherent policy resulting in the development of the romanian citizens’ wealth. after a decade of structural, legal and institutional reforms, as well as economical and social ones, for preparing the moment of adherence to the european union, romania must face a significantly changed context, having an increased level of interdependent member states, that need a rational and efficient strategic behavior. first of all, the adherence to the european union represents the opportunity and the means of increasing the standard of living of the romanian citizens along with the european ones. the fact that, romania, at the moment of adhering to the european union, was a member state having a gnp a lot smaller than the european average, underlines the necessity of efficient use of the national resources and of the communitarian funds, as well as the active encouragement of the domestic and foreign investments. thus, romania needs to maintain the rapid, balanced and durable economical increase, on a long term, and it also needs strong and efficient institutions, a coherent legislative system and a predictable fiscal system. from the convergence point of view, the macro-economical frame has the role to sustain the durability of the economical growth, including the financing of physical infrastructure development and of the human capital. the assurance of a permanent macro-economical frame for the period between 2007-2013 has represented a fundamental objective, characterized by the enhancement of the correlation process of the existent policies with the new policies, the continuation of the fiscal consolidation, of the inflation lowering and of the budget deficit level, according to the european union’s requirements. the monetary, budgetary and fiscal policies, as well as the preparation for the adherence to the euro zone will be thus subject to the logics of the multi-annual budgetary programming, that allocates the necessary sums to the key sectors (including the public-private partnerships’ development) and to rationalize the expenses, taking into account the principle of tributaries. . . in order to become a direct beneficiary of the communitarian funds, romania has to assure a high level of absorption of these. the funds that romania will get from the european union are potential, while the contribution to the communitarian budget is certain and it represents an assumed absorption as a member state. complementary to the communitarian funds, the budgetary resources of the state and the ones extracted from the private sector are engaged in priority directions of development. 1. the european context of the structural funds’ entry and development the european union is an economical and political union, developed in europe, being composed of 28 states. the origins of the european union go back to the european community of coal and steel (ceco) and to the european economical community (cee), formed of six member states in 1958.during the following years, the european union has been expanded by the adherence of new member states and has strengthened its powers by adding new economical, social and political domains in its abilities. the treaty from maastricht has put the basis of the european union under the present name in 1993. the last 23 constitution amendments of the european union have been represented by the treaty from lisbon that came into force on the 1st of december 1009. (source wickipedia). this union of states having different levels of development has imposed, in time, through the adherence of new state and the deepening of the economical and social disparities, a convergence policy whose goal has been to reduce the differences between the development levels of different regions. in this context, the economical and social policy of cohesion (pces) finds its place. thus, the pces represents the fundamental policy of the european union having as a goal the decrease of the economical and social development disparities between the member states or regions of the european union; the improvement of the unique market’s functioning; the promotion of a permanent and durable development of the european union. 1/3 from the european union’s budget is allocated to this politics. the pces’s intervention objectives are the following:  convergence for the regions where the gnp/citizen is under 75% of the european union’s average;  regional competitiveness and labor force – for the regions which are not eligible for the convergence objective;  the european territorial cooperation – for the regions, counties and cross border zones; (regulation ce 1083/2006, art.3). the financial means by which the pces is implemented are called structural instruments and contain: structural funds (the european fund of regional development and the european social fund) and the cohesion fund. these three funds are known under the generic name of structural funds and funds of cohesion (fsc). structural funds and funds of cohesion contribute, each of them, to the fulfillment of the three objectives, thus:  the convergence objective is financed by the european fund for regional development (fedr), the european social fund (fse) and the cohesion fund (fc);  the objective of regional competitiveness and employment is financed out of the european fund for regional development (fedr) and of the cohesion fund (fc);  the objective of the european territorial cooperation is financed out of the european fund of regional development (fedr). the european fund for regional development (fedr) sustains a durable economical development at a regional and local level by levying the local capacities and by varying the economical structures in fields such as technological development and research, innovation and entrepreneurship, informational society, small and medium size companies, environment protection, tourism, and energy. the european social fund (fse) contributes to the increase of the adaptability of the labour force and enterprises, the increase of the access on the labor force market, unemployment prevention, the prolonging of the active life and of the women’s and immigrants’ attendance level on the labor market, the advocacy of social embedded ness of the disadvantaged persons and the fight against discrimination. the cohesion fund (fc) finances projects in the field of the environment protection and of transport across the european union, projects in the field of durable development as well as projects on the improvement of air and road traffic, the updating of the urban transport, the development and updating of the multimodal transport. because of the fact that the basic objectives, more exactly the objectives regarding the convergence, the competition and the european territorial cooperation cannot be sufficiently fulfilled, in better conditions, taking into consideration the disparities’ size and the limited financial tools that the member states have, in order to fulfill the convergence objective, they can be achieved in better conditions by means of a multi annual guarantee of the communitarian funding that permit the focus of the cohesion policy on the community’s priorities. this desideratum can be achieved by means of subventions. according to the ce regulation no. 1605/2002 these represent direct financial contributions, given as donations from the budget to finance: 24 either an action destined to promote the fulfillment of an objective that is part of the european union’s policy; either the functioning of an organism that has as an objective a general european interest or an objective that is part of the european union’s policy. the subventions form the object of a written agreement and are part of an annual program published at the beginning of the year. this is brought into force by an invitation to make suggestions, except for the cases of exceptional urgencies. all the subventions given during this financial exercise are published annually, following the confidentiality and safety demands. the subvention’s grant is subject to the principles of transparency and equal treatment. the subventions cannot be cumulative, they cannot be given retroactively and they suppose co-financing. moreover, these cannot have as a target or result the idea of producing profit on the beneficiary’s behalf. one action can get only one subvention allocated from the budget in favor of the same beneficiary. a subvention cannot be given for an action that has already been started unless the applicant can prove the necessity of starting a business before the signing of the agreement. in such cases, the eligible expenses for financing cannot date back before subvention request’s handing in. retroactive subventions cannot be given for actions that have already been finished. eligible requests of subventions are the ones presented in writing by the juridical persons who, on behalf of the beneficiary, when being in the situation of attribution, certify the fact that they are not in one of the situations presented in art.93 (debts at budgets, bankruptcy, convicted for fraud, corruption) and art.94 (conflict of interests, false declarations). the criteria of selection must permit the evaluation of the applicant’s capacity to fulfill the action or the proposed working program. the attribution’s criteria previously announced in the invitation must permit the evaluation of the applications’ quality, from point of view of fixed objectives and priorities. the applications are evaluated, on the previously announced criteria of selection and graduation, by an evaluation committee, in order to establish the applications that can be financed. afterwards, being based on the evaluation, the main competent credit release authority shortlists the approved beneficiaries and the amounts. he is the one who informs the applicants in writing upon the decision regarding their request. in case of the application’s rejection, the institution presents the reasons of rejection, especially regarding the previously announced selection criteria. 2. the european funds and their economical effects in order to evaluate in detail the economical effects of the structural financings we begin from the objectives and the priorities declared between 2007 and 2013. the main objectives have been connected to convergence as well as competitiveness through effects on the labor market. for instance, among the priorities we mention: equal easing to labor access, more productive and innovative methods of work, the increase of employees’ level of qualification and engagement, institutions’ modernization on the work market, active measures of work market’s support, integration of under-privileged categories on the work market, educational reform, etc. it is well known that the european financings taking place between 2007 and 203 had a series of objectives connected to the increase of the european union’s convergence and competitiveness at an international level. that’s why, the majority of these refer to the work market, by increasing the equality of the chances and qualification of the work force. in the analysis of the convergence level, the used indicators are the gnp/citizen and the human development indicator. 25 the national strategic frame of reference 2007-2013 (csnr, 2006) represents the ”world strategy for application” (the govern of romania, 2012) the european funds in romania. there have been seven operational programs established by means of this: 1. the regional operational program (por), 2. the sector operational program for increasing the economical competitiveness (poscce), 3. the medium sector operational program (pos medium), 4. the transport sector operational program (pos transport), 5. the sector operational program on human resources development (posdru), 6. the operational program on management capacity development (podca), 7. the operational program on technical assistance. thus, csnr is implemented by means of the operational programs which are part of the convergence and european territorial cooperation objectives. an operational program represents a document presented by a member state and adopted by the committee, defining a development strategy according to a coherent and complete set of priorities, for whose fulfillment there is a need of a certain fund. each of these programs has been divided into priority lines and major directions of intervention (dmi). the most important information for each type of operational program that has been developed in our country in the”convergence” objective, mostly its structure and objectives, are presented in the following lines. the details regarding the implementation strategy of the programs financed out of european funds are found, as it has already been said, in the national reference strategic frame 2007-2013. being elaborated in 2006 when romania was in its economical ascension, the declared goal was ”the decrease of the disparities in the economical and social development between romania and the european union’s member states by generating an auxiliary increase of 15-20% of the gnp until 2015 ”. (csnr, 2006). the forecasts have been exaggerated and rootless, as it has been proved afterwards. they have been built on a background of a continuous economical development. romania’s economical development lasted until the year 2008. from a real rate of an increasing 7,3% gnp in 2008, there has been registered a dramatic decrease in the following year, the value being of 6,6%, thus having an almost double decrease in value. during the entire period of the financial program, between 2007 and 2013, romania’s economy had fluctuant evolutions. along with the first signs of crisis, the strategy of using the structural funds in our country has been changed. the goal has been the increase in the degree of the absorption and usage of the european funds for countervailing the effects of the international financial crisis. moreover, the last one has had different effects in using the financings out of european funds in the member states (healy&bristow, 2013). but, in the majority of the cases, these have represented the help given in economy, despite the technical and institutional problems that have been met along the process of accessing the respective sums. the decisions taken by the romanian authorities have been to improve the absorption process. however, in the middle of 2012, the total rate of the european funds’ absorption was of 9,17% for romania (the govern of romania, 2012), the lowest in the european union. unfortunately, this position has been kept during the years, but the number of the absorbed funds has significantly increased, becoming more than 26 20%in 2013. out of the seven operational programs, the most performing ones have been por, pos medium, posdru and podca. posce, pos transport and poat have registered lower contracting levels. the interesting thing is that exactly the last ones have “benefited” out of the international financial crises. thus, the strategy’s restructuring for adapting to the new economical conditions have ended in the reallocation of the money, as follows: 60% for infrastructure, 20% invested in the human capital and 15% for increasing the competitiveness on a long term. regarding the economical impact of the decision of relocating the funds, the opinions are divided and an evaluation of its fairness is requested. as previous analyses done on a older reveal the structural funds cannot fulfill their initial goal just because of the fact that the investments in the infrastructure do not have a significant impact on the long run (rodriguez-pose & fratesi, 2004; dall’erba & le gallo, 2003). the annual implementation rapports present succinctly the development of the implementation process on every type of program, out of the 7 existent ones in romania. but, as the existent specialty literature shows ((litan et al, 2013), the information given to the general public are incomplete. the european union has an institutional frame that regards the promotion of its values, the fulfillment of its objectives, the support of its interests, of its citizens and of the member states, as well as, assuring its coherence, effectiveness and continuity of its policy and actions. the european union’s institutions are the following: the european parliament; the european council; the council; the european committee; the european union’s court of justice; the european central bank; the court of accounts. according to the european union’s cohesion policy, romania’s social-economical development’s orientation is made of a strategic plan document and multi-annual financial programming, authorized by the govern and elaborated in a large partnership. it is about the national development plan (pnd), which is a characteristic concept of the european policy of economical and social cohesion (cohesion policy), designed to offer a coherent and permanent conception regarding the development of the european union’s member states, transposed in development priorities, development, programs, projects, according to the principle of structural funds’ programming principle. in the context of romania’s adherence to the european union in 2007, pnd has a major role of aligning the national development policy to the communitarian development priorities, by promoting the measures considered to be incentives of durable social-economical development at a european level. regarding the coherence policy, pnd represents a tool of establishing the priority of the public investments for development, mainly oriented on the priorities and objectives compatible with the intervention domains of the structural and cohesion funds. in this context, the underlining of the pnd’s 2007-2013 specific character is necessary, which does not substitute the national strategy of the economical development, but it represents one of its major components. among other things, pnd 2007 27 2013 fundaments the priorities and the objectives of the development’s strategy that will be negotiated with the european committee for financing out of structural and cohesion funds between 2007 and 2013. the elaboration of the pnd 2007-2013 has been fulfilled according to h.g.no.1115/2004 regarding the elaboration, in partnerships, of the national development plan, which establishes the methodological principles, the institutional frame of work and the consulting mechanisms of partnership. thus, the national development plan between 2007 and 2013 has as a target “the fast decrease of the social-economical disparities between romania and the european union’s member states”. at the elaboration of pnd, it has been estimated that, between 2007 and 2013, romania gained 10%points out of the existent development gap, the pnd strategy being financed out of multiple sources: internal ones (state budget, local budgets, etc) and external ones (structural tools of the european union, the european union’s funds of structural type for rural development and fishing, external credits, etc). for the programming period between 2007 and 2013, pnd has been elaborated in accordance with the orderliness of the specific programs’ principles established in the council’s regulation (ce)no.1260/1999 21 st of june 1999 regarding the general dispositions for structural funds (art.8 – the complimentary and the partnership, art.11 – the appurtenance, art.15,16 – development plans, art.41 – evaluation, art.46 – informing and publicity), as well as other demands resulted out of the european committee’s recommendation regarding the programming and the management of the structural tools. for the programming period between 2007 and 2013, the national development plan fundaments romania’s access to the structural instruments, representing the basic document on which the fostering communitarian frame has been negotiated with the european committee. in this context, the priorities and the objectives of the pnd 2007 -2013 are concentrated on the fields which are eligible for structural interventions (structural funds and cohesion fund). pnd 2007-2013 fundaments the financial aid given by the european union to approximately 4% of the gnp, yearly, at a commitment level, to which the national co financing is added. the pnd development priorities are the following: the increase of the economical competitiveness and of the economical development based on knowledge, the development and updating of the shipping infrastructure, the protection and the improvement in the environment’s quality, human resources development, the occupation promotion and the social inclusion and the strengthening of the managerial capacity, the development of the rural economy and the productivity’s improvement in the agricultural sector, 28 the decrease of the development disparities between different regions of the country. the financial programming of the pnd aimed at fulfilling a realistic general frame of the finance resources’ development that should be used between 2007 and 2013 in order to increase the growth of convergence with the european union, concluding with a global estimated sum of approximately 58,7 billion euro, allocated on six pnd national priorities of development. financial world programming pnd 2007-2013 mil. euro – pnd priorities 2007 2008 2009 2010 2011 2012 2013 total p1. competitiveness 651,4 8 620,72 793,14 882,76 842,95 761,25 682,12 5.234,43 p2. transport infrastructure 2.094, 99 2.517,4 8 2.465,2 5 2.071,2 9 1.819,8 4 1.832,2 0 1.853,7 5 14.654,7 9 p3. environment 753,1 8 898,70 1.099,1 1 1.160,4 5 1.069,5 4 810,78 806,23 6.597,98 p4. human resources 711,6 5 912,51 1.297,0 8 1.317,5 9 1.313,2 2 1.115,8 5 940,72 7.608,60 p5. rural development 1.585, 56 1.757,7 2 2.200,9 6 2.335,4 9 2.395,0 8 2.445,1 5 2.517,3 7 15.237,3 2 p6. regional development 1.294, 79 1.280,9 9 1.397,9 6 1.336,3 7 1.342,3 5 1.344,5 5 1.342,9 7 9.339,98 total 7.091, 65 7.988,1 2 9.253,5 0 9.103,9 5 8.782,9 8 8.309,7 8 8.143,1 6 58.673,1 0 and, the pnd structure of the financing resources between 2007 and 2013 are presented as follows: communitarian funds -43% national public sources (central and local, including ifi credits) – 48% private sources (private co financing associated with the communitarian funds) -9% the implementation of the 2007-2013 pnd provisions, according to the established strategy and under the conditions of efficiency, accuracy, transparency and financial correctness, implies significant efforts coming from the public institutions and of the beneficiaries. the pnd represents the document on whose basis the national reference strategic frame 2007-2013 as well as the operational programs out of which these funds will be implemented, have been created. in this respect, the pnd’s elaboration has developed in parallel with the one of the operational programs for implementing the structural funds and the cohesion funds, thus assuring the coherence between these documents. 3.conclusions the european funds have been created in order to help the member states to reduce the disparities between them. an evaluation of the structural funds’ effects and their economical implications is extremely important as the structural funds must be taken into consideration together with the declared objectives of these programs. it is important to see if these objectives have been fulfilled and the degree of their fulfillment. 29 bibliography 1.dall'erba, s., & le gallo, j., regional convergence and the impact of european structural funds over 1989–1999: a spatial econometric analysis. papers in regional science, 87(2), 2008, 219-244 2. dogar c., mare c., a”what if” analysis for sound financial management decisions in romanian european social fund grants evaluation, elsevier 2nd world conference on business, economics and management, wcbem-2013, 25-28 april, antalya, turcia, 2013 3.gherghinescu o., rinderu p., econometric model for analysing the structural funds absorption at regional – case study sw region, timisoara journal of economics, vol. 4, no. 3, p. 161 – 174, 2011 (http://ideas.repec.org/a/wun/journl/tjev04y2011i3%2815%29a05.html) 4.haţegan camelia-daniela, study regarding the financial auditing for verification of the european projects in romania în „ audit financiar”, anul xi, nr. 102-6/2013 5.healy adrian and gillian bristow, economic crisis and the structural funds, espon applied research project ecr2 – economic crisis: resilience of regions, espon 2013 programme/article, luxembourg, september 2013 6.ienciu alin-ionel, bonaci carmen-giorgiana, the external public audit in the projects having european source of finance, ed. eikon, 2013 6. romania’s govern, the national strategic report 2012 regarding the implementation of the structural and cohesion funds, 2013 7.litan cristian marius, mare codruța, popa irimie, a brief perspective on the regional distribution of sophrd financing in romania, revista de studii şi cercetări economice virgil madgearu / review of economic studies and research virgil madgearu , an vi, nr. 2 – nr. 2/2013, p 81-98 8.rodríguez-pose a. si fratesi u., between development and social policies: the impact of european structural funds in objective 1 regions, regional studies , vol 38, nr 1, p. 97–113, 2004 9.***, the strategic frame of national reference 2007 – 2013 10.***, informative guide regarding the prevention of the irregularities at the level of the beneficiaries, 2009 11.***,the guide of the european committee for exercising the compliance’s evaluation 12.***, guide – accounting procedures associated with the projects financed out of structural and cohesion european funds ccid, 2011 13.***, isa 315 the understanding of the entity and of its environment and risk evaluation of significant deformation 14.***, isa 320 significance level in audit. 15.***, isa 330 the auditor’s procedures 16.***, isa 530 sampling in audit and other procedures of selective testing http://ideas.repec.org/a/wun/journl/tjev04y2011i3%2815%29a05.html general considerations on the impact of transfer pricing by multinational companies on a national economy agora international journal of economical sciences, aijes, issn 2067-3310, e issn 2067 – 7669, vol 11 (2017) general considerations on the impact of transfer pricing performed by multinational companies on a national economy rica ivan 1 , călin tănase ladar 2 1 faculty of electrical engineering and information technology, university of oradea, str. universității, nr. 1, oradea, romania 2 faculty of environment protection, university of oradea, str. universității, nr. 1, oradea, romania e-mails rika_ivan2005@yahoo.com, ladarcalin@yahoo.com abstract the presence of an increasing number of multinational companies leads to an increase in the number of international transactions due to trade between entities belonging to these companies, but also due to exchanges with other international companies. transactions made by the entities belonging to the same multinational company are influenced by the laws in force which apply to a national economy and which regulates international money flows; such laws have different provisions from one country to another, and thus generating income losses for these companies. at the same time, revenue transfers made by multinational companies can cause revenue losses to the budgets of those host states where these revenues are generated, governments being very concerned about transfer pricing. thus, it is worth noticing the main methods used by multinationals in terms of transfer pricing policy, what is the impact of these transfers on a national economy, especially on romania's economy, and what measures governments take to counteract the loss of budget revenues due to transfer pricing. keywords: multinational companies, rules, transfer pricing, profit 1. introduction an extremely important factor that has led to an increased globalization of international markets and transactions is the revolution in information and communications technology (ict) and the development of an efficient communication system. thus, multinational companies have come to represent a large share in many of the national economies, characterized by a high integration process between the component entities, generating large sums resulting from the financial transactions concluded between the branches of a multinational company. these transactions occur between entities subject to different tax regimes belonging to different national economies. thus, multinational companies will seek to use their most favorable tax regimes to maximize revenue and, implicitly, the profit earned by the parent company to the detriment of the national economy where those revenues were made. many countries have put forward a series of rules to force companies to use transfers in order to get higher profits in other areas with more favorable tax arrangements. these rules are mainly based on the arm’s length principle, which means that the transactions between the parties involved must be economically comparable with similar transactions made by independent parties. the organization for economic co-operation and development (oecd) has made many efforts to establish the arm’s length principle as the basic principle in the case of transfer pricing theory, by issuing a series of guidelines and guides in the matter thereof. however, there are still many differences in the way this principle applies both between oecd countries and non-member countries. last but not least, since rules and regulations in this area are changing very often, it is very difficult to collect reliable and up-to-date information. mailto:rika_ivan2005@yahoo.com mailto:ladarcalin@yahoo.com 2 2. the concept of transfer pricing multinational companies comprise multiple sectors of activity, being involved in the manufacturing/rendering and sale of many products and services. the management of such companies can not control all the financial flows of each parent company’s entity. for this reason, these companies are usually structured on the divisions (also known as related parties), each division being an autonomous entity. the parent company's management has the role of coordinating the activity of subordinated divisions, in order to maximize the overall profit of the organization. these organizations include financial flow tracking mechanisms for each product/ service as well as for each subordinated entity, being organized on cost centers. each division needs to be evaluated, which is why it is necessary to have clear monitoring methods of measuring the performances of such entities. this can be done by setting prices for transferable goods from one division to another, also known as transfer prices. the transfer pricing is defined in accordance with article 7, paragraph 26, letter d) of the law no. 227/2015 on fiscal code, as "the price at which the tangible or intangible assets are transferred or the services are rendered" between related parties. although such related parties may be doing business within the same country, the tax authorities are more concerned with those entities of companies that are located in different countries. if there were no legislation regulating transfer pricing, it would be extremely easy for a multinational company to transfer profits made within a territory of a country to any other country. the main reason for which profits are transferred from one country to another is the difference a company may obtain from different corporate tax rates between the countries. the difference between the tax rates applied by tax authorities in different countries is not the only reason for transfers made by companies. the latter wish to have lower transfer pricing, to make ensure, for instance, that their subsidiaries have competitive pricing on their local markets (schlegelmilch, b, 2016). another important reason is the presence of foreign currency exchange controls. transfer pricing not only applies to property, but also to services, intangible assets, administration fees, and financing. funding in multi-affiliated companies is a matter of interest to the tax authorities of a country where the amount thereof is very high and transfer pricing may be very subjective. in addition to the implications of charging multinational companies, the planning of the transfer pricing may also influence the allocated resources, the way of supplying the component entities or the managers’ benefits package. the transfer pricing techniques and methods consist mainly in the incorrect invoicing of commercial transactions (palan et al, 2010), this being done through the following methods: invoicing less the exports to a tax haven where the amounts will be expatriated. the goods are sold at the real value, the resulting difference being the value of the transfer capital; invoicing to a higher value of the imports to a country where the amounts will be expatriated. the resulting difference, i.e. the transfer capital, is often deposited in the bank accounts of the importer in the tax heaven; incorrect reporting of the quality or type of imported products to support the over or underestimation of the declared value for the reasons outlined above; setting-up fictitious transactions for which payments are made. a widely used tactic is to pay for goods or services that will never actually exist. a distinction must be made, on the one hand, between tax planning, which is a legitimate and accepted way by tax authorities to minimize taxes and tax evasion, on the other, which is illegal. tax cuts are achieved by producing temporary or permanent tax savings. the temporary tax savings a company can make is only postponing the payment of taxes up to a certain point in time. permanent savings are made irreversible, using for example fiscal losses or by transferring taxable income to tax heavens. (lohse et al, 2012). 3 multinational companies, in their quest to achieve continued profitability growth, are continually seeking to identify ways of transferring profits to countries with favorable tax arrangements. there are two ways to achieve this: one way is to transfer people, goods or services to a low-tax country, as has been done in the past by moving production capacities to china or romania. another way is to transfer revenue to a country with a favorable tax regime, such as cyprus. this revenue can be moved in several ways, such as adjusting prices for trade transactions between parent companies' subsidiaries, through internal financing between subsidiaries or centralizing the company's functions. these ways of action can be followed because the entities subordinated to a parent company are treated as independent companies by the tax authorities. these companies encourage the development of bilateral agreements between different countries, aiming exclusively at obtaining benefits from the transfer of income to the country with a more favorable tax regime. governments have become aware of this in time, and besides issuing transfer pricing rules have sought to introduce measures to prevent the transfer of profits from the country where they are made. in the oecd, some guiding principles were developed fro the first time in 1995; these principles provide guidance on arm’s length principle, pricing methods and transaction comparability, as well as recommendations (oecd, 2017). 2.1. transfer pricing rules the oecd member countries' fiscal codes contain measures regulating inter-company transactions based on the arm’s length principle used as the standard for transfer pricing. although romania is not an oecd member, the arm’s length principle, has been taken over into domestic legislation as a market value since 1994 and was applicable to transactions concluded between related parties, including those between a foreign legal entity and its permanent establishment in romania. thus, only transactions between romanian entities with non-resident related parties could be verified by the tax authority. since 2010, transactions between related parties representing romanian legal entities fall within the scope of the transfer pricing rules. in addition to the general framework adopted by the oecd, many countries have also adopted specific transfer pricing rules over the past two decades. this was due to the globalization and increasing sensitivity of the taxpayers of the countries adopting these rules, in order to protect taxable income. most countries applying these rules are states that have adopted a high tax regime, such as germany, the usa or japan. other countries, such as ireland, switzerland or austria which have not adopted such specific transfer pricing rules are countries that attract many international investments due to their generous tax regime. all these specific rules are applied to transfer pricing between related parties. two entities are considered related parties if they have at least one percentage point (1%) of participation in the share capital of the other. in the case of romania, this percentage is at least 25% of the value/ number of participation titles (shares) or voting rights in the other legal entity (law 227/2015 on the fiscal code). for other countries, this percentage differs from 5%, for example in poland, to 25% in the case of china, which is actually the most used percentage, to 50% in the case of argentina or japan. there are also cases of countries such as brazil, chile, venezuela, which apply transfer pricing rules to unrelated parties. 3. the main methods used for transfer pricing by making use of the arm’s length principle, several methods have been established to determine the correct transfer price for certain transactions. according to the oecd, the first methods put forward and which are considered traditional methods are the cost plus pricing method, which compares the gross profit margins achieved over cost; the resale price method, which compares gross sales margins; the price comparison method, which is the most used 4 and which compares prices in similar transactions. in the 1995 oecd guidelines, besides traditional methods, there are two other transactional methods, namely: the transactional net margin method, which compares net profit margins obtained by a company with net margins obtained by independent companies carrying out similar activities; as well as the profit sharing allocation method, which starts from the profit obtained from transactions carried out by the related parties and which is shred among the participants according to the contribution thereof. 3.1. price comparison method under this method the price of a transaction in which no related parties are involved is compared with the price of transaction of a related party. the main prerequisite is the comparability of the transaction. thus, there must be several common features such as product type, availability, quality, contractual terms, economic circumstances, etc. however, there are also cases where this method can not be applied despite the above prerequisites, such as in a non-competitive market or in the case of products with rare or unique characteristics that can not be compared to others or in the case of intangible assets whose trading is based on the negotiating power of the parties. the price comparison method directly compares the price of a related party transaction with the price of an uncontrolled transaction, being the most direct method for calculating the price the arm length principle. (nta japan, 2017) this method is used mainly in setting the transfer pricing of fees, commissions, royalties and the level of interest rates applicable between related parties. 3.2. resale price method by this method, a price is sought for a product that has been purchased from a related party and resold to a third. this resale price is reduced by an appropriate gross margin. gross margin is calculated as follows: gross margin = (sales cost of goods) / sales x 100. gross margin can be compared to margins obtained from transactions of unrelated persons. what results from the downward margin operation can be considered as a market price for the transfer of goods between related parties. the main condition for applying this method is that gross margins are comparable for all products, meaning that the transaction takes place under similar conditions. the oecd guideline suggests the need for some adjustments in the application of this method due to the fact that gross margins are not generally equal for different companies. the resale price method may be applied subject to the similarity of the functions performed by the company, the risks assumed, and the contractual terms used. there are important shortcomings in using the sale price method when there are differences between the accounting standards used by companies to calculate and report gross margins on sales. in the case of romania, in the financial statements the expenses are presented according to the nature/type thereof and not in relation to their destination/purpose, which makes it difficult to distinguish between the cost of goods sold and the operational expenses of comparable goods. the resale price method is used most effectively in running the analysis of distribution activities when the reseller has not made a substantial change to the physical properties of the product or added some marketing attributes such as the trademark before re-selling. 3.3. cost plus method this method is similar to the previous method, but refers to the fact that the company sells similar products to both related and unrelated parties. thus, the profit margin made by the related party from the selling to another related person will be assessed by comparing it with the profit margin obtained from selling to a third entity. at the cost of the supplying company, 5 a profit margin corresponding to the field of activity shall be added. if the profit margin is at market value, then the transfer pricing is at market value. the profit margin should represent a profit that reflects the functions performed, the market conditions and the risks assumed by the company. the profit margin is calculated as follows: profit margin = (sales cost of goods) / cost of goods x 100. there are the same shortcomings in using the cost plus method as in the case of the resale price method. the cost plus method can be applied subject to the existence of similar transactions so that current differences do not have a significant material effect on the profit margin or adjustments can be made to eliminate such differences. it is necessary to clearly define the categories of costs that come under the cost base. if the cost structure of transactions between related parties is different from uncontrolled transactions and no adjustments can be made, then the cost plus method can not be used. the cost-plus method tends to use a net profit margin. the cost plus method is most useful when analyzing the sales of semi-finished products, processing services, rdi services, etc., as well as long-term sales and purchase contracts. 3.4. net margin method this method works in the same way as the cost plus method and the resale price method, the main difference consisting in the fact that the net margin method analyzes the net profit margins obtained by companies that have similar activities within the same industry on the same market and which tend to equalize in time. the net margin method is based on the calculation of profit margins determined as the report between operating profit derived from a transaction between related parties and a certain base consisting of sales, assets or costs. market value is determined by comparing the net margin realized in a transaction between related parties and the transaction of the same related parties and an unrelated one or between unrelated, independent parties with a similar functional and risk profile. the net margin method is used in the documentation of transfer prices that are used during a tax period. the net margin approach is most effectively used in the case of financial data on the basis of which various financial indicators can be calculated to test the profitability of related persons. the big advantage of the net margin approach is that net margins are subject to lesser influence by transactional differences that have a direct influence on the transaction price. net margins have a higher tolerability than profit margins to some functional differences between transactions between related parties and uncontrolled transactions. the net margin method should only take into account those profits of the related person that derive exclusively from the transaction under consideration. the financial indicator used is chosen in relation to the functional and risk profile of a related party. the most used financial indicators to find out the market value of transactions between related parties are as follows: the net margin of sales, which is used in the case of distributors (it is calculated as the report between operating profits and sales); asset rate of return (calculated as the ratio between the operating profit and the assets used, less the financial assets and cash availability), which is used in the case of the manufacturers; the profit margin on costs (calculated as the ratio between operating income and total operational costs), which applies to manufacturers or service providers. the financial indicators used will be calculated for an average period of 3 or 5 years to reduce the influence of external factors such as the shelf life of the product. a statistical benchmarking is used to calculate the market value of the net profit margin. if related parties have a net profit margin falling within the comparison period, it can be said that related parties conduct transactions in line with market value principles. 6 3.5 profit sharing allocation method this method is based on determining the aggregate profit resulting from transactions between related parties. the profit obtained is divided between the related persons in such a way as to simulate how the profit would have been allocated if the transaction had taken place between two unrelated parties on the basis of market value. the allocated profit must respect the functions performed, the assets used, and the risks assumed by each of the parties. profit can be allocated into two ways, namely by running an analysis of contributions and a residual analysis, respectively. by analyzing the contributions, the aggregate profits from the transactions concluded between related parties are divided between them according to the value of the functions performed by each party, taking into account external market data showing how the non-affiliated parties would divide the profit resulting from transactions carried out under similar conditions. this profit is, in general, the operational profit. the residual analysis is a two-steps analysis, namely: in the first part, each related party is allocated a profit to secure a profit margin deemed natural for the type of transaction performed; in the second stage, what remains is to be known as residual profit and is allocated between the related parties involved in the transaction, while analyzing the circumstances in which this profit would be distributed among unrelated persons. the profit sharing allocation method is used when related parties have intangible assets with a high value or where the transactions between related parties are so complex that they can not be separated into independent, stand-alone transactions. a related party that owns a tangible or intangible single asset is entitled to receive a portion of the residual profits thereof. the great advantage of this method is that it does not focus on transactions that are highly comparable and can therefore be used in cases where similar transactions between unrelated parties can not be identified. the disadvantage is that the unrelated parties do not ordinarily use the profit sharing allocation method and it is therefore difficult to identify external data. 4. penalties, taxing arrangements and litigations 4.1. penalties in the case of transfer pricing the penalties to be applied for detecting violations of transfer pricing rules vary according to severity thereof. in most cases, sanctions consist in applying a percentage of the misappropriated sums subject to taxation or the amount of the illegal transfer price. almost half of the countries use as a penalty less than 100% of the additional tax/duty thus due. thus, austria applies a 2% sanction, and at the opposite end there is a sanction of 400% in the case of argentina. another issue is the interest payable for the late payment of taxes and duties on transfer pricing adjustments. while some countries only use a time-to-pay rate, other countries use interest rates that include late payment penalties which may reach 3% per month, as is the case of vietnam. many countries impose penalties for mispredicting documentation and for lack or delay of delivery thereof. these penalties may take the form of a fixed amount, a percentage of the unpaid tax/ duty or may be another specific factor defined by domestic legislation thereof. countries that impose a fixed fee as a penalty for incomplete or erroneous documentations are romania or argentina, while countries such as belgium or great britain only impose a fine if there is no documentation at all. other countries like brazil or colombia imposes sanctions in the form of a percentage of the transaction value for which the information is wrong or missing. in the eu member states, sanctions may vary between 10-200% of the unpaid tax/ duty or represent 5-30% of the misappropriated amounts subject to taxing (cooper j et al, 2016). 7 4.2. taxing arrangements for transfer pricing rules, litigation may occur between companies and tax authorities. in the absence of agreements between countries representing trading parties, double taxation of the same transaction is very possible. double taxation is generally recognized as an obstacle to international trade and investment. thus, in order to promote trade and investment, countries sought to avoid and eliminate double taxation situations by concluding tax agreements. the number of tax agreements is steadily increasing, with more than 3,000 such agreements now in place worldwide (w.c.o., 2015). two approaches to resolving tax disputes have been set up within the oecd, namely the mutual agreement procedure and the corresponding adjustment procedure. in the case of the first approach, it is emphasized that tax authorities have to settle disputes by establishing clear provisions in the agreements to prevent double taxation. in the event of misunderstandings, tax authorities are required to settle disputes within two years, otherwise companies may call for arbitration. the appropriate adjustment procedure refers to the related party’s request according to which tax authorities should coordinate the adjustment activity in order to avoid double taxation. at eu level, important steps have been taken to resolve disputes relating to transfer pricing. thus, there is an arbitration agreement, signed by 27 members of the eu, which applies to transfer pricing that is not deliberately wrongly established and does not involve large sanctions. this convention also sets out the duration of mutual agreements between two or more eu member states. by signing in advance pricing agreements, predefined features of the transaction between related parties are established for a certain period of time. some member states set unilaterally such agreements for the tax authorities and companies within their jurisdiction, but this affects the tax liability of related parties and requires the presence of an agreement procedure between the jurisdictions involved (convention 90/463/eec). many countries start by making unilateral advance pricing agreements, being easier to manage, and then extending the procedure to bilateral agreements. there are also countries that only offer bilateral agreements before introducing transfer pricing rules, as is the case with germany. in conclusion, countries tend to offer increasingly pricing agreements in response to the need for multinationals to reduce their transfer pricing related risks. 5. conclusions due to the particular impact of transfers made by companies located in different countries on a country economy, many countries are interested in regulating transfer pricing to ensure consistent tax revenues for their budgets. transfer pricing rules usually apply only to foreign related parties. with regard to transfer pricing methods, there are few a methods which apply between countries, mainly those presented by the oecd. there are differences only on the priority of using methods, most countries preferring traditional methods. a major goal of many governments is to obtain budget revenue for budget consolidation, so tax authorities are interested in identifying and collecting taxes and duties which apply to corporate income made within the country. tax control measures that a country's authorities and bodies can take to prevent the transfer of profits from multinational companies will not completely eliminate this phenomenon. a new win-win approach in the relation with foreign investors is needed to prevent major macroeconomic imbalances leading to economic crises at the scale of national economy. references [1] oecd (2010), “transfer pricing guidelines for multinational enterprises and tax administrations”, oecd publishing, cap.ii 8 [2] palan r, murphy r, chavagneux c (2010) „tax havens: how globalization really works”, cornell university press, p. 68-69 [3] convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises, 90/436/eec, oj, l 225, p. 10-24 [4] lohse t, riedel n, spengel c (2012), “the increasing importance of transfer pricing regulations – a worldwide overview”, oxford university centre for business taxation, working papers, no. 1227 [5] international transfer pricing 2013/14 (2013), http://www.pwc.com/internationaltp [6] world customs organization (2015) „wco guide to customs valuation and transfer pricing”, version 1.0 – june 2015, p.15-22 [7] parlamentul româniei (2015), „lege nr. 227 privind codul fiscal”, monitorul oficial nr. 688/10.09.2015, cap. iii, art.7 [8] schlegelmilch, b (2016), „global marketing strategy: an executive digest”, springer international publishing switzerland , p. 124 [9] cooper j, fox r, loeprick j, mohindra k (2016), „transfer pricing and developing economies: a handbook for policy makers and practitioners”, the world bank, p. 105-107 [10] oecd (2017), “transfer pricing guidelines for multinational enterprises and tax administrations 2017”, oecd publishing, cap. ii și iii [11] national tax agency japan (2017) „reference case studies on application of transfer pricing taxation”, https://www.nta.go.jp/foreign_language/08.pdf http://www.pwc.com/internationaltp https://www.nta.go.jp/foreign_language/08.pdf agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 14-23 14 intelligent packaging as a marketing tool. are digital technologies re-shaping packaging? i. gigauri, m. palazzo iza gigauri,¹ maria palazzo² ¹ st. andrew the first-called georgian university, georgia (orcid.org/0000-0001-6394-6416) e-mail: i.gigauri@sangu.edu.ge ² university of salerno & universitas mercatorum, italy (orcid.org/0000-0002-8710-9054) e-mail: maria.palazzo@unimercatorum.it abstract. rapid technological advancements, digitalization trends, changes in consumer behavior, and call to achieve sustainable development goals induce transformations in the packaging industry. digital technologies are enabling the packaging to move from its core passive functions to more enhanced features such as prolonged preservation, traceability, communication, sustainable supply chain, life-cycle evaluation, and extended shelf-life of a product. intelligent packaging can provide information about the conditions inside and outside of the packaging preventing contamination of the product. monitoring of food products allows consumers, producers, and retailers to avert potential spoilage and unnecessary waste. consumer behavior determines the success of intelligent packaging. their acceptance of new technologies, environmental concerns, attitude towards sustainability issues, as well as safety and quality preferences define customers’ buying behavior. the innovative features of packaging have not yet attracted much attention from academics and practitioners. in addition, the design and development of such packaging are associated with high prices, which encourages manufacturers to avoid it. therefore, a comprehensive understanding of current packaging trends can shed light on the benefits and potential barriers to its use. this paper provides a literature review of intelligent packaging and explains its functions. it defines the role of packaging in marketing in the current digital era. the paper discusses the definitions of smart, active, and intelligent packaging and suggests how intelligent packaging can serve as a marketing tool while achieving marketing strategies. keywords: packaging, intelligent packaging, marketing, digital technologies, communication, sustainability introduction the unprecedented advancements in digital technologies in the past few years have empowered companies to reshape marketing tools and strategies. the emergence of artificial intelligence, virtual reality, big data analytics, mobile internet, internet of things, blockchains, automation, and robotization enabled marketers to respond to consumers’ needs in an effective and efficient way. the advent of the digital economy along with the new normal caused by the recent pandemic has altered social systems and business models toward innovative solutions (skala, 2019; gigauri, 2021). technological progress and accelerated digitalization influenced packaging and created new opportunities for the packaging industry. mailto:i.gigauri@sangu.edu.ge mailto:maria.palazzo@unimercatorum.it iza gigauri, maria palazzo 15 consumer requirements towards packaging are changing in line with digitalization trends. changed lifestyles and the current digital age imply consumers’ decisions on more convenient packaging, especially for food and drink products (jinkarn & suwannaporn, 2015). packaging makes impression on buyers as they first come into contact with the packaging before the product. therefore, the visual effects of packaging including shape, size, and color are significant marketing elements. the positive feelings and emotions evoked by the packaging can lead to a purchase decision. for this reason, packaging as a marketing tool has become attractive for researchers and marketers, who have more and more improved packaging systems. as a result, intelligent packaging emerged combining digital, innovation, and marketing tools. the importance of packaging is not only represented for supply chain management but also for improving packaging sustainability. demand for traceability features is growing and the need for the safety and quality of products is increasing. intelligent packaging provides information about the conditions inside and outside of the packaging enabling timely decision-making. its potential to prevent waste aligns with sustainable development goals. in this vein, packaging has become essential not only from the marketing perspective but also for the implementation of sustainable business strategies. this review paper addresses the role of intelligent packaging from a marketing perspective. to achieve its aims, the paper provides definitions of active, intelligent, smart, and sustainable packaging and discusses the functions and benefits of intelligent packaging for marketing strategies. i. about the definition of intelligent packaging and related terms the advancements in the intelligent packaging system resulted from the current technological progress, changes in consumer preferences, and sustainability trends (palazzo et al., 2023). the term is related to smart, active, interactive, responsive, intelligent, and sustainable packages (figure 1). figure 1. relationship of packaging systems source: authors’ elaboration based on the discussion of definitions. intelligent packaging as a marketing tool. are digital technologies reshaping packaging? 16 smart packaging offers improved functions utilizing new technologies (kerry & butler, 2008). incorporated sensor technology enables smart packaging systems to monitor products such as food and pharmaceuticals aiming to transmit information about their quality, safety, and freshness (schaefer & cheung, 2018). smart packaging contains characteristics of intelligent packaging and active packaging (vanderroost et al., 2014). in this regard, schaefer and cheung (2018, p. 1023) summarize the smart packaging notion in the following way: “smart packaging allows to track and trace a product throughout its lifecycle and to analyze and control the environment inside or outside the package to inform its manufacturer, retailer or consumer on the product’s condition at any given time”. active packaging includes additives to maintain the quality and shelf life of a food product (biji et al., 2015). it is mainly used for rapidly perishable products to reduce the number of active materials causing food damage and avoid bacteria from entering the product (schaefer & cheung, 2018). usually, active packaging systems contain oxygen scavengers, ethylene scavengers, flavor and odor absorbers/releasers, antimicrobial and antioxidant packaging technologies (prasad & kochhar, 2014). european food safety authority defines intelligent packaging as “materials and articles which monitor the condition of packaged food or the environment surrounding the food (regulation (ec) no 1935/2004 article 2.2.b and regulation (ec) no 450/2009 article 3.b)” (efsa, 2009, 4). intelligent packaging systems inspect food condition and transmit information about its quality during storage or transportation (biji et al., 2015). the system contains various indicators such as time-temperature, gas detectors, and freshness or ripening indicators (prasad & kochhar, 2014). intelligent packaging is a complex system embedded with intelligent functions to detect, record, track, and communicate information about the quality of a packaged product (yam et al., 2005). these functions are achieved through hardware components such as different indicators and sensor devices as well as radio frequency identification (rfid) systems (kerry, o’grady & hogan, 2006), which trace, record, and provide information about discovered alterations in a product and its environment inside packaging (realini & marcos, 2014). thereby, for example, changing oxygen or ph levels, the freshness of food, or temperature can be detected (yam et al., 2005). responsive packaging responds to specific stimuli in the food or surrounding environment, such as microorganisms, with the purpose of monitoring and enhancing food quality (brockgreitens & abbas, 2016). interactive packaging enables two-way communication between consumers and packaged goods through the incorporated technological systems (butler, 2013). the research conducted by lydekaityte and tambo (2020) found that smart interactive packaging improves the effectiveness of a product and increases consumers’ experiences as they can engage with it. active packaging systems react to the food environment to enhance the quality, safety, and shelf-life, while intelligent packaging aims to monitor the conditions of the product (drago et al., 2020). accordingly, intelligent packaging detects and shares information, whereas active and responsive packaging takes actions to improve the quality of food and environment (vanderroost et al., 2014). as a result, both types of packaging can cooperate under the concept of smart packaging (müller & schmid, 2019) to enhance product quality (figure 2). sustainable packaging refers to eco-friendly packaging that also considers social and iza gigauri, maria palazzo 17 economic aspects (boz, korhonen & koelsch sand, 2020). sustainable packaging is sourced from renewable and sustainable materials, it can reduce waste as well as resource and energy use. sustainable packaging is recyclable and reusable. figure 2. systems and properties of active and intelligent packaging source: authors’ elaboration based on drago et al., 2020. ii. functions and benefits of intelligent packaging for marketing strategies in general, packaging plays a significant role in the consumer market being an essential marketing element of marketing communication strategy (rundh, 2009). moreover, packaging design must suit to the working lifestyle of consumers taking into account urbanization. since customers’ expectations are constantly changing and their demands are never fully satisfied, companies are motivated to create consumer-oriented offers attracting purchasers to participate in the process (baruk & iwanicka, 2015). packaging functions involve not only the protection of a product but also represent marketing tools (robertson, 2013) as a communication trait is an integral part of packages. the communication strategy of marketing incorporates brand concept and product quality for influencing consumer decisions. customers first encounter packages when touching a product and get their first impression of a brand and product through packages. successful marketing communication through packaging covers not only information about the product but also packaging design, fonts and colors used as well as logos, illustrations, and symbols on it (koutsimanis et al., 2012; renn, 2007; van den berg-weitzel & van de laar, 2001). therefore, intelligent packaging as a marketing tool. are digital technologies reshaping packaging? 18 packaging involves an important task to promote and sell commodities by providing information about a product (rundh, 2005). in addition to the communication function, packaging has logistics, environmental, and marketing chain functions (prendergast & pitt, 1996; rundh, 2005). packages must protect products during shipment, distribution, storage, and transportation. furthermore, convenience features are the most demanded function of packages because of modern lifestyles. for consumers, packages of food, home care, or pharmaceutical products must be easy to open, re-close, unwrap, store, and carry, while for manufacturers, the packaging system should be convenient in order to pack and distribute goods (jinkarn & suwannaporn, 2015). therefore, packaging design including such convenience functionality is a significant marketing tool (silayoi & speece, 2004). intelligent packaging detects and conveys information about the condition of the product. however, it does not have a function to address the problem it detects but stimulates active packaging function to tackle the changed environment or alterations in the product. intelligent packaging aims to reveal the quality conditions of the product and therefore, improve its safety. for this reason, it includes several devices and detectors such as time-temperature indicators, freshness indicators, and tracking services to monitor the transportation and storage of perishable products. in addition to indicators, intelligent packaging contains data carriers to track product movement throughout the supply chain and chemical sensors to transform chemical information into a measurable signal (azeredo & correa, 2021). consumers have access to the information intelligent packaging is gathering. prior studies conducted through 600 interviews with consumers revealed that the most essential feature of food and drink packaging was the opening characteristics, which impact purchasing decisions, and consumers even were ready to pay more for convenient packaging including tamper-evident design (jinkarn & suwannaporn, 2015). moreover, baruk and iwanicka (2015) found that environmental aspects of dairy product packaging positively affect the consumer purchasing decision. blankenbach et al. (2018) developed smart packaging with bluetooth and smartphone application for pharmaceutical products to provide information to patients about medicine intake. through e-paper and sensors, it is possible to control the amount of liquid, number of tablets, and time to take tablets, equipped with alarm and reminder systems (blankenbach et al., 2018). logistically, it helps to monitor environment, temperature, and enables data transfer; it includes qr code and active tag for security, data exchange, and reordering purposes (blankenbach et al., 2018). the importance of packaging for marketing is increasing due to the following factors. first, consumer products require packages in order to bring them to market (baruk & iwanicka, 2015). second, increased competition, a large number of available, and continuously more new products offered force companies to find innovative ways for differentiation (wells et al., 2007). in this sense, packaging acts as an outstanding marketing tool to attract the attention of buyers. third, changes in the marketing environment such as cultural, social, economic, and technological factors influence buying decisions, and hence, the packaging is expected to meet the expectations (albino et al., 2009). fourth, self-service facilities on the market are growing, where packaging serves as a “silent salesman” (baruk & iwanicka, 2015; rettie & brewer, iza gigauri, maria palazzo 19 2000). in this regard, packaging can not only convey product information in a persuasive way but consumers also can feel and see the packaging before making a purchase decision. additionally, consumer awareness and demand for knowledge are growing. they want to know about the origin and composition of the product. interestingly, studies revealed that consumers’ age, gender, and education determine their expectations of packaging, which impacts their purchase decision (baruk & iwanicka, 2016). previous research performed through focus group interviews in sweden and used thematic analysis demonstrated that consumers concern about the ethical and environmental impact of packaging material suggesting that manufacturers should communicate favorable characteristics of packaging (fernqvist, olsson & spendrup, 2015). food product perishability can be avoided by appropriate packaging to increase their shelf life and hence, decrease food waste, which is a main problem in the food supply chain (li et al., 2020). since products have an environmental impact throughout their life cycle (williams & wikström, 2011), companies need to decrease waste caused by damaged products using the intelligent packaging. the quality of a product can be communicated by transparent packaging (fernqvist et al., 2015), which is made mainly of plastic. intelligent packaging, conversely, provides through technological devices. prior studies show that marketers can attract consumers through targeted packaging design and communication of product benefits based on consumers’ opinions on packaging (fernqvist et al., 2015). likewise, the research results indicate that consumers demand that fruit and vegetable packaging communicate the origin of products, cooking recipes, as well as product name, brand, and expiration date (fernqvist et al., 2015). thus, packaging reflecting food quality and brand value creates consumer satisfaction (coles, 2003) and helps achieve a competitive advantage. in addition, packaging impacts the returns in online shopping (wallenburg et al., 2021), as secondary and primary packages serve as a sensory experience for buyers (heller et al., 2019). it communicates about the seller and purchased items. especially, secondary packages are specifically designed by online retailers as a differentiation strategy to meet or even exceed customers’ expectations. packaging includes branding features to “create a premium esthetic appeal” (wallenburg et al., 2021). the recent study results by palazzo, vollero and siano (2023) performed a systematic literature review of 130 articles published between 1991-2021 and confirmed the growing interest of scholars and practitioners toward intelligent packaging, especially, with respect to sustainability and innovation. intelligent packaging can facilitate the transition to a circular economy and better waste management (palazzo et al., 2023). moreover, the research found that the food sector benefits more from advanced features of packaging due to the extended shelf-life and safety of food products (palazzo et al., 2023; vanderroost et al., 2014). conclusions marketing promotes the sale of products and is associated with the communication function of disseminating information about the brand and the quality or functionality of commodities to consumers. packaging is recognized as a vital part of a product through which consumers contact the brand, and consequently, the concept of packaging is considered one of the key aspects of marketing strategy. the aim of packaging systems is not only to protect the intelligent packaging as a marketing tool. are digital technologies reshaping packaging? 20 product but also to ensure its safety and quality as well as preserve it during distribution. additionally, packaging facilitates communication with customers by providing different types of information such as instructions, components, expiration dates, etc. it also sells a product through its attractiveness, as packaging functions and convenience for opening and storage are engaging marketing tools. in this context, intelligent packaging transmits information to stakeholders about the product and its surrounding environment remotely ensuring the satisfaction of consumers’ demands. technological progress and digitization have empowered packaging thanks to which advanced systems and properties are integrated into smart intelligent packaging. intelligent packaging can contribute to sustainability trends by reducing wastage and avoiding spoilage of products, especially, food, cosmetics, and pharmaceuticals. since sustainable development goals aim to improve lives worldwide, consumers’ behavior is altering adopting sustainable lifestyles, and demanding more responsibility from brands (gigauri, 2022; gigauri & vasilev, 2022). intelligent packaging responds to increasing demand for quality and safety and facilitates effective management of the supply chain. in addition, active and intelligent packaging has the potential to become transparent communication tool to consumers, retail and food industry for controlling the food production and supply chain. this paper contributes to the literature and practice by exploring intelligent packaging as a marketing tool in the light of digital technologies. it adds value on the discussions of new trends and perspectives of smart packaging. the paper distinguishes between various types of packaging contributing to the knowledge of scholars and managers and demonstrates the relationship of the innovative packaging types. it also sheds light on some benefits and advantages of smart, intelligent and active packaging while engaging in debates about its usability for different product categories. from the marketing perspective, consumer satisfaction through packaging can lead to shifting their behavior in favor of the company brand. practitioners can recognize that packaging influence consumer purchase decisions. furthermore, in the era of online shopping, packaging impacts consumer satisfaction and brand reputation. consequently, marketers should address this issue by creating appropriate packaging design based on research. moreover, smart packaging can contribute to sustainability goals by decreasing waste. consumers’ concern about the environment and their willingness to purchase products with eco-friendly packaging is increasing. thus, they are attracted by sustainable packaging. accordingly, marketers can impress consumers with targeted packaging design, which communicates product benefits based on consumers’ packaging demand. future studies should examine the features and characteristics of smart intelligent packaging for different products and survey consumers acceptance of various types of packaging. since the concept is complex, it can contain many variables requiring more in-depth analysis, especially from different countries and culture contexts. references 1. azeredo, h. m. c., & correa, d. s. 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(2005). intelligent packaging: concepts and applications. journal of food science, 70(1), r1-r10. https://doi.org/10.1111/j.1365-2621.2005.tb09052.x agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 56-69 56 towards sustainable event planning: current state of play, best practices, and challenges creating sustainable events n. lazar nuša lazar ljubljana school of business, slovenia https://orcid.org/0000-0002-5898-4968 e-mail: nusa.lazar@dekorina.si abstract. the topic of sustainability has gained widespread acceptance in many areas of society, with significant claims for the benefits of adopting the principles of sustainability in business and management. according to the united nations, a sustainable event is one designed and organized to meet two main objectives: to minimize all potential negative impacts on the environment and leave a beneficial legacy for the host community and all involved. in the last few years, the concept of sustainable event planning has been incorporated also into the event industry, turning the attention of event management to issues of environment, social, and governance (esg) as well as diversity, equity, and inclusion (dei). the author will elaborate on the current state of sustainable event planning, outline some best practices in this sector, and deriving from the results of different studies make recommendations as to how the industry can and should make sustainability core to activities in event management. keywords: sustainable events, event management, sustainable event planning, events industry introduction sustainable, ecological, green, eco-friendly, etc. are terms used in our everyday lives, practically on a daily basis. these terms are all synonyms of each other. sustainability is often referred to as “sustainable development” (ec, 2022), which means meeting our own needs without compromising the ability of future generations to meet their own needs. it includes three pillars: economic, environmental, and social. sustainability more in detail implies a link towards environmental impacts; in other words, the consumption of natural resources and the deliberation of pollution and energy use, the concern of economic themes of growth and durability, additionally connected to social inclusion and distribution of wealth (musgrave and raj, 2009). to achieve sustainability, the following contemporaneous achievements are necessary (holmes et al., 2015):  environmental sustainability refers to the conservation and responsible management of natural resources (primarily non-renewable as well as vital for the maintenance of life, such as air, water, and land) where it is important to minimize pollution and protect the environment.  economic sustainability refers to creating prosperity at different levels of society, through the long-term sustainability of enterprises and other related economic activities. https://orcid.org/0000-0002-5898-4968 mailto:nusa.lazar@dekorina.si nuša lazar 57  social sustainability implies an equitable distribution of benefits, as well as respecting human rights and maintaining and strengthening local communities. the term sustainability is used in the media, by consumers and companies, in politics, etc. sustainability has gained a lot of interest among people and even earned the title of “megatrend” of our time (mittelstaedt et al., 2014). since sustainability is present in all aspects of life, sustainability has also found its way to the event industry. sustainability for events means acting towards preserving our natural environment, as well as promoting a healthy, inclusive society and in addition supporting a thriving economy. according to the united nations (unep, 2012), a sustainable event is one designed and organized to meet two main objectives: to minimize all potential negative impacts on the environment and leave a beneficial legacy for the host community and all involved. in 2015, world leaders agreed on agenda 2030, which includes a set of 17 sustainable development goals and 169 targets proposed by the united nations (ec, 2022). based on these 17 sustainable development goals also four principles of event sustainability were designed by eventcouncil (2022):  event organizers and suppliers share responsibility for implementing and communicating sustainable practices to their stakeholders.  environmental practices include the conservation of resources (including water, energy, and natural resources), waste management, carbon emissions reduction and management, supply chain management and responsible purchasing, and biodiversity preservation.  social considerations include universal human rights, community impacts, labor practices, respect for culture, safety and security, and health and well-being.  economic practices are included through collaboration and partnerships, local support (including small and medium enterprises), stakeholder participation, equitable economic impact, transparency, and responsible governance. as mentioned, the principles for sustainable events address all 17 of the united nations sustainable development goals, where the connection to each of the goals to the mentioned principles is shown in figure 1 below. figure 1. the principles for sustainable events addressing the united nations sustainable development goals. environmental practice social practice economic practice source: adapted from eventscouncil, 2022. towards sustainable event planning: current state of play, best practices, and challenges creating sustainable events 58 i. the development of sustainable event management theories events can model examples of a harmonious balance between human activity, resource use, and environmental impact, instead of being seen as hedonistic, resource-gulping, and garbage-producing happenings. events have the power to leave a lasting and positive legacy and social outcomes, by inspiring supply chain and attendees to action (jones, 2018). the concepts of sustainability in the event sector are not new, but in recent years more and more attention has been paid to it, and research, analysis, and comparative studies are often carried out and presented to the public. as musgrave and raj (2009) state, sustainable event management has evolved over several years. it is not just a concept born out of government strategies or academic posturing. for example, in february 1994, lillehammer, norway presented the first so-called green games in the history of the olympics. the sustainable exhibition industry project (sexi) was set in 2002 in the uk to reduce waste as a first step towards sustainable development within the exhibitions sector of events. it has led to a commitment to action and the adoption of new standards and practices that drive waste out of the exhibition industry in the future (sexi, 2002). applying the notions of sustainability in the event sector is a necessity for a responsible events profession operating within the 21st century (musgrave and raj, 2009). hediger (2000) proposes that a component of sustainable principles is to induce cultural change within society, and thus within the events sector. in connection with this thought, foley, mcgillivray, and mcpherson (2009) state that events must be used to engage and empower community groups to contribute to community building long after the event itself has moved on. looking at the wider picture, practitioners and supporters of sustainable practice are aware of the need to pay attention to the triple bottom line of economy, society, and environment, but in practice, this is a difficult balancing act (griffin 2009). smith-christensen (2009) argues that the concept of sustainable events does not necessarily indicate a clear reference to the management of an event or its ability to contribute to sustainable development. that is why she proposed different definitions of this concept. here are 2 most often applied (smith-christensen, 2009): 1. “sustainable events are events managed as an autonomous cyclical process through the interaction between event management, host community, and event-goers, providing human resources, infrastructure, and funds.” 2. “sustainable events: events efficiently utilizing available resources (human resources, infrastructure, and funds), thereby being self-sustaining without, or, in the case of externalities, with a minimum of, public sector support.” also addressing the topic of culture to sustainable development is relevant to the event industry, as mair and smith (2021) view, since events play a crucial role in cultural activity, not only encouraging cultural development, but visibilising cultural forms and enabling a wider range of people to participate. as such, cultural festivals and cultural events are regarded as ways of making places more inclusive. i.1. benefits of sustainable events managing sustainable events not only reduce their environmental impact but can also benefit the main actors involved. concrete benefits are (ec, 2018; meetinghand, 2016): 1. environmental benefits and financial savings by saving energy, going paperless, and cutting down on unnecessary resources, you nuša lazar 59 can cut down on unnecessary expenditures simply consuming less can eventually save money and reap environmental benefits. one example is online events, which help to reduce carbon emissions as it reduces the need for participants to travel and additionally save costs as you do not have to spend on venue rental. applying sustainability principles will in the long term reduce costs (e.g. less printed material, less waste to be collected) and, most importantly, help reduce our collective carbon/climate footprint. on the other hand, increasing demand for more sustainable products can bring down prices and stimulate the market for more sustainability. 2. reputation and public image organizing a sustainable event, it will help to raise awareness about this issue to the audience. you can encourage the target audience to make decisions that will be beneficial to the environment and society since conference participants and the public are becoming increasingly aware of environmental issues. 3. multiplier effect and triggering innovation organizing sustainable events can inspire others to follow and further promote innovative green techniques and serving seasonal (and/or organic) food and drinks. with sustainable events, you drive the demand. requesting more sustainable products will trigger as well as promote the development of innovative technologies and techniques, leading to more efficient use of resources and the improvement of the delegate experience. 4. social benefits an event can provide benefits to the region by creating jobs, encouraging local investment, involving regional small and medium enterprises (smes), and can promote better working conditions and social inclusion as well as having a huge impact on tourism. it can also act as a catalyst for encouraging environmental and sustainable best practices across the region. festa, metallo, and cuomo (2009) state, that there is a close link between events, brand image, and reputation, in an interdependent vision of reciprocal influence. this means that the modality of event proceedings has a significant influence on the participating brand image and, on corporate reputation. but this also works the opposite way: corporate reputation and brand image can determine the value of the event and its sustainability. i.2. the current state of play in their paper already in 2009, musgrave and raj presented some sustainable event guides and principles, like defra sustainable events guide, sexi: the sustainable exhibition industry project, hannover principles, uk sport, the sustainable music festival – a strategic guide. based on an analysis of existing models and other sustainable guides, musgrave and raj presented a framework below that introduces the fundamentals of sustainability, coherence, and integration within the events industry. by their definition, a sustainable event policy must respect all ten elements of the framework as stated below: 1. organizational structure (defining roles and procedures that foster positive attitude). 2. design for duality (new technologies and search for innovative approaches). 3. avoidance (plan to reduce damage to surrounding ecological systems, disruption to surrounding communities, and economic disparity). 4. engagement (create local partnerships and alliances, increase participation and access towards sustainable event planning: current state of play, best practices, and challenges creating sustainable events 60 for all). 5. no trace (elimination of waste, reduction of energy consumption). 6. legacy, longevity, and transparency (measure, evaluate and inform all stakeholders of performance and future investment). 7. incentivize (strategic alliances to offer savings for compliance towards sustainability principles from all stakeholders). 8. strategic management (creating critical path and value chain analysis). 9. education (educating participants, suppliers, employees, and the surrounding community about the purpose and principles of sustainability). 10. location, location, location (deciding on a venue that provides accessibility, convenience, flexibility, and/or compliance with sustainability principles). based on the dit-achiev model (which is an environmentally integrated destination management model) griffin (2009) proposed that it could be employed in an event's context. herby, the major issue confronting the selection of indicators is the poor availability of many data sets. however, the model with its content can be used as a guideline or framework, which event managers have to consider while managing sustainable events. figure 2. the dit-achiev model is employed in an event context. source: griffin (2009). by jones (2018) the key operational areas an event focuses on when identifying its sustainability issues are:  site and/or venue  local environmental impacts  supply chain  waste  energy  transport  water and sanitation nuša lazar 61  workforce conditions  engagement and communications it is important to incorporate these issues in the event management phases (initiation, planning, execution, monitoring, and closure). jones (2018) introduces a practical, step-by-step guide covering all the key aspects of how to identify, evaluate and manage event sustainability issues. also, different event management companies, leading event managers as well as event organizers give advice on their websites and blog posts about how successfully manage or more specifically how to plan a sustainable event. all the above-mentioned academics and scholars, as well as experts from the event industry, cover the topic by giving guidelines and explaining the concept, which results in the multiplier effect and inspires others to learn and follow this in the execution of innovative, sustainable events. even the united nations published sustainable events guide with the aim of enabling others to adopt its good practices. the guide includes information on how to keep large-scale meetings as green as they can be and is a great tool for those responsible for the planning and conduct of large-scale conferences and other events (unep, 2012). in 2018 the eu commission published guidelines on organizing sustainable meetings and events at the commission to offer advice to ec staff on how to organize more sustainable meetings and events and seek to reduce the environmental impact. the purpose of the guidelines is to maximize the positive environmental impacts and minimize the potential negative ones while planning and delivering meetings and events (ec, 2018). the following steps and actions can be summarized according to the mentioned guidelines:  step 0: is a physical event necessary? it is important to reconsider if we need to hold a physical event or if can it be organized online.  step 1: is the venue sustainable enough? the decision of a venue should be considered factors like easy access by public transport, bike, or walking, as well as the availability of secure bike parking facilities; the energy efficiency of the building, and the waste collection/recycling systems.  step 2: is the printed and promotional material sustainable? we should consider using online promotional tools (e.g. online registration, online communication material, and resources, apps). also, the printed promotional material should be limited (e.g. eco-friendly design & printing) and it is important to avoid or limit the distribution of promotional gadgets and gifts.  step 3: are the 3rs applied? (reduce, recycle, and reuse) this includes minimizing waste (e.g. reducing printed material and gadgets, packaging, single-use items, and food waste) as well as recycling waste via an appropriate system of waste sorting, collection, and recycling.  step 4: is the catering sustainable? while planning the catering it is important to choose seasonal (and/or organic) food and drinks, to offer a larger choice of plant-based food options, and most importantly prevent food waste. also, avoiding single-use items is important (e.g. towards sustainable event planning: current state of play, best practices, and challenges creating sustainable events 62 use reusable cutlery and crockery, drinking water in jugs).  step 5: are the accommodation and transport environmentally friendly? when planning the event and inviting participants, it is crucial to think also about the accommodation and recommend accommodation close to the venue and easily accessible by public transport, walking, and cycling. for the participants also the information on sustainable commuting should be provided (e.g. maps, timetables).  step 6: have social aspects been considered? while organizing and sustainable event the organizer should require companies to apply eco-friendly procedures when performing the contract or to employ staff in a socially conscious manner.  step 7: are you sharing environmental awareness? it is important to communicate the sustainability of your event (e.g. involve participants and stakeholders, follow-up communication should emphasize the positive, sustainable effects of your event). following these simple steps, or better said “the checklist”, can significantly contribute to improving the environmental performance and deliver significant benefits of an event. in the following chapter, we will present some examples of sustainable event management and events considering all or some of the above-mentioned steps toward managing a sustainable event. ii. methodology throughout the first chapters of the article, we looked at the development of the sustainable event management theory, to the benefits of sustainable events and discussed the current state of sustainable event management and planning. these are all references prior to our research in the field and show how academics and event industry experts situated the methodology in established practices, mostly with case study research, record keeping, and qualitative observations. in this chapter, we discuss the qualitative research of our article, involving collecting non-numerical data, observations, and case study research. based on the beforementioned content analysis and thematic analysis of the field of sustainable event management, we analyzed several different events with the note "sustainable or green" which are described and presented online (enhancentertainment., n.d., city of melbourne, n.d., event academy, 2018, the adriatic, 2022) and based on the expert experience as well as firsthand experience of the author, who is also working in the field of event management and attended as well as organized several sustainable events. together we looked at 22 different events, which have an emphasis on sustainability, and used the methodology of sustainability in event management in practice. based on that we decided to present the following 5 events (describing the preparation of samples for analysis): 1. we chose the example of the world-famous event expo 2020 dubai, which was organized in a middle eastern country where there is not so much emphasis on sustainable development and sustainable event management to show that even where there is not much interest in this topic, one can achieve excellent, top-notch performance results. the event itself was promoted as sustainable and is one of the largest events in the world (both in terms of the number of visitors, the size of the venue, and the duration). also, the author attended the event and has firsthand experience. nuša lazar 63 2. presentation of excellent practices of sustainable event management in the case of an international sports event was chosen (example of wimbledon) to demonstrate in a practical example, the possibility of applying sustainable principles not only in events at the european, or governmental level, supported by eu funds but also at a commercially, international, large sports event, such as wimbledon is. 3. urbact city festival 2022 is an event that the author attended and was able to observe and research first-hand. at the same time, this event is organized under the auspices of the eu, which in its long-term goals emphasizes sustainable development and circular economy. as already presented, the eu commission has its guidelines for organizing sustainable events and meetings and the mentioned event is so suitable for analyses, examining if the eu is “leading by example” in the field of sustainable event management. 4. if we hierarchically move from the european level to the national or the local level, specifically to the level of municipalities, it is important to show an example of sustainable event management also at that level. we can encourage the sustainable management and planning of events at the municipal level with examples of sustainable public procurement for purchasing materials for events (such as the example of the municipality the haag). 5. the fact that even small business entities and institutions can work sustainable and manage and organize events in such a manner is demonstrated by the example of the event the local street food festival 2023 in maribor, organized by the regional development agency for podravje maribor (rra podravje maribor), which organized a sustainable event at the local level, in a small town (maribor, slovenia) and was extremely successful doing it. again, the author attended the event and has firsthand experience. iii. results best practices of sustainable event management in this chapter, we will look at some examples of events that integrate sustainability concepts and strategies to save the planet. iii.1. expo 2020 dubai expo 2020’s delivered one of the most sustainable world expos in history align with national and international drivers. the key sustainable objectives of the event were: (1) leaving a legacy of sustainable infrastructure and future-oriented sustainable practices, (2) catalyzing sustainability efforts in dubai and the uae, (3) increasing public awareness by engaging society on sustainability principles and sustainable living, (4) developing sustainability solutions that are scalable, extending their benefits to the wider economy. below are listed all the activities that the organizes run that lead to a great organized sustainable event (expo 2020 dubai, 2020):  encourage the use of sustainable, low-carbon transport by providing alternative transport options, i.e. dubai metro and the expo rider bus service.  ensure efficient energy use and sustainable energy production across expo 2020 by applying (1) passive design solutions and appropriate “active” industry-standard solutions and (2) innovative technological solutions and renewable energy systems. towards sustainable event planning: current state of play, best practices, and challenges creating sustainable events 64  with respect to the public realm people-centric, comfortable, and walkable spaces (with shading).  enhance the ecological value of the site, protecting and promoting biodiversity and local species.  reduce the demand for potable water systems by applying a water efficiency hierarchy, followed by the substitution of potable water with non-potable supplies (for example recycled water was used for 100% of non-potable applications (e.g. irrigation, cooling); 95% of condensate water recovered from buildings was collected and reused).  expo 2020 dubai’s sustainable materials guidelines and the rise guidelines for sustainable operations provide guidance on the selection of appropriate materials.  minimize the amount of waste produced throughout all stages of design, construction, and operation; minimize the amount of waste that goes to landfill by incorporating a circular economy approach; reduce the use of single-use products and packaging; and plan for a sustainable legacy transition.  demonstrate global leadership, innovation, environmental stewardship, and social responsibility by achieving high levels of third-party green building and site certification.  communicate sustainability progress and achievements in a transparent and stakeholder-responsive way.  ensure carbon emissions at expo 2020 are accurately measured and minimized, with unavoidable emissions managed in a responsible manner through appropriate offsetting programs. expo is an excellent example of how versatile, detailed, and careful event management and the integration of sustainability concepts lead to an excellent implementation of a sustainable event, which is considered an example of good practice and a learning example for future similar events. iii.2. wimbledon wimbledon is the oldest tennis tournament in the world and is widely regarded as the most prestigious. wimbledon is a signatory to the un sport for climate action framework and works alongside the un, sport, and our partners in achieving positive environmental impacts. they are ensuring positive impacts by pursuing the set goals (wimbledon, 2023):  reducing emissions from our operations to “net zero” by 2030. they are buying renewable electricity to power operations, measure, and report operational emissions, have embarked on a program of lighting upgrades installing high efficiency led lights around the estate, use electric lawnmowers and horticulture equipment around the grounds, have 20 electric ipace vehicles in the vehicle fleet during the championships, … these are just a few of the measures they made.  being a resource-efficient organization by 2030. following this goal, none of day-to-day business or championships waste goes to landfill, recyclable materials are separated from general waste which generates nuša lazar 65 electricity for the national grid, food waste is collected for anaerobic digestion producing high-quality fertilizer for agriculture and horticulture purposes, … these are only a few of the activities done in that segment.  contributing to a “net gain” in biodiversity by 2030. this is accomplished through different tasks, like prioritizing planting and horticulture across the site, showcasing “heritage” varieties in the food and drink offering, and donating plants to local community groups, … etc.  using influence to inspire wider action. wimbledon is using its influence to reach beyond its boundaries through partnership, leadership, and collaboration with other major events and bodies in the sports industry and beyond. wimbledon is committed to playing its part in embracing the opportunities for regeneration and innovation, together with its partners, players, members, guests, and fans. this sports event is a great model for other sports events on how to successfully manage a sustainable sports event. iii.3. urbact city festival 2022 urbact promotes integrated development to support cities implement horizontal and vertical policy integration. inspired by european cities’ actions for climate and sustainable integrated urban development, the festival in 2022 was the first carbon-neutral urbact program-level event. the mentioned event was in a live format from 14 to 16 june 2022 in pantin / greater paris, under the label of the french presidency in the council of the european union. in practice, the city festival’s carbon-neutral approach involved (urbact, 2022):  decision on an eco-friendly venue powered by renewable energy (la cité fertile), with recycling bins and composting systems.  serving vegetarian and vegan dishes made from fresh, local, and seasonal produce, dishes from fresh and seasonal products. there was a great collaboration with catering companies with a sustainable approach as well as using non-disposable plates and encouraging all the participants to bring personal lunchboxes (if possible). preventing significant food surplus and offering the possibility of composting meal leftovers. also offering tap water throughout the event and reusable cups.  proposing a list of more eco-responsible accommodations in the area for the participants of the event.  working with suppliers who are committed to sustainability.  reusing existing furniture and materials for venue branding.  using primarily digital communication (mobile festival website). there were no prints or goodies at the festival.  encouraging the participants to choose more sustainable means of travel to the festival, and during the festival use public transportation and rent bikes.  a carbon simulator was prepared. the goal was to collect data from the different carbon emission categories to enable the calculation of the whole carbon footprint of the urbact city festival 2022 and to assess the impact and know which number of emissions needed to compensate for. towards sustainable event planning: current state of play, best practices, and challenges creating sustainable events 66 the events sector contributes significantly to carbon emissions and has a responsibility to address that and contribute to the climate neutrality goals. all the different components of event preparation and delivery (from catering, accommodation, venue, and participant travel, to transport of goods and waste) account for hundreds or even thousands of tons of carbon emissions over a short period of time. that is why the urbact city festival 2022 is a great example of how a large event, with more than 450 participants, can make a great impact on reducing carbon emissions if well managed from the point of sustainable event management. iii.4. purchasing materials for events in a sustainable way by the municipality of hague the city of the hague, netherlands is working towards becoming a climate-neutral municipality by 2030. in compliance with its policies, the city imposed sustainability requirements in the purchase of materials for events and related services as part of the tenders the municipality is having for materials for events. in practice this means tenderers had to describe their role in achieving sustainability and innovation, covering at least the topics listed below (gpp good practice, 2022):  the choice of materials and products when purchasing new materials.  emission-free transport.  handling of the materials at the end of the depreciation period.  materials used for disposable items.  how the tenderer would ensure a sustainable and innovative approach to the implementation of the contract. the most difficult part of the procurement process based on the city’s experience was verifying bidders’ claims about social and environmental criteria. they put emphasis on the hard evidence rather than on what tenderers would plan to do (requirement to show experience and to illustrate what they did in previous contracts). this is also a good example and a suitable basis for other cities when following the hague's lead in imposing sustainability requirements in the purchase of materials for events. iii.5. the local street food festival 2023 in maribor the local street food festival 2023 in maribor, slovenia took place under the framework of the european food wave project, which aims to improve the quality of life for the world's population through circular economy projects and addresses the issue of economic sustainability. the festival connected local food producers and culinary lovers. sustainability concepts were achieved through the following aspects (rra podravje maribor, 2023):  the food was prepared exclusively from locally grown food and products.  a huge emphasis was on reducing waste: deposit for glasses and only glass materials for glasses were used, as well as reducing food waste due to real-time food preparation (according to the needs and the demand of the participants of the event).  eco-friendly materials were used: paper and wood utensils (spoons, forks, plates).  also, the reduce on-site water use was addressed: together with maribor water supply company water dispensers were put on the event location. the event also had a social aspect: upon entering the local street festival, visitors purchased coupons at a symbolic price, with which they then paid for prepared food and drinks. nuša lazar 67 this was donated to the zveza prijateljev mladine (the friends of youth association) for the education of children from socially disadvantaged families. this event shows that even small, local events can fulfill the sustainability in event management through environmental sustainability, economic sustainability, and social sustainability. discussion and conclusion sustainability as a mega trend occurs also in the event industry. organizations that hold or manage meetings, or different events (from conferences, business meetings, concerts, fairs, to any other large get-together) need to consider the impact these events have on the environment, society, and economy and have to be using an effective sustainable event management strategy. sustainable events not only reduce their environmental impact but can also have some benefits, like (1) environmental benefits and financial savings, since saving energy, going paperless, and cutting down on unnecessary resources can cut down on unnecessary expenditures; (2) positive impact on reputation and public image, since conference participants and the public are becoming increasingly aware of environmental issues; (3) multiplier effect as well as triggering innovation, from promoting the development of innovative technologies and techniques, leading to more efficient use of resources and inspiring others to follow and further promote innovative green techniques and serving seasonal food and drinks; not to forget are also (4) social benefits, since sustainable event management promotes better working conditions and social inclusion; additionally (5) modality of event proceedings has a significant influence on the participating brand image and, on corporate reputation. sustainable concepts and issues should be incorporated in all event management phases (from initiation, planning, execution, monitoring, and closure). there are several step-by-step guides covering all the key aspects of how to identify, evaluate and manage event sustainability issues. it starts with the simple question "is a physical event even necessary", since we need first to consider, whether should we need to hold a physical event or can it be organized online. while managing a sustainable event furthermore we need to think about the venue (from the energy efficiency of the building to accessibility by public transport, bike, or walking distance) and if the printed and promotional material is sustainable (including eco-friendly criteria) or if can we use online promotional tools. while managing a sustainable event all the time we have to ask ourselves are the 3r applied (reduce, recycle, reuse). moreover, the catering has to be sustainable (from locally grown and plant-based food options to preventing food waste). furthermore, the accommodation options need to be close to the venue and easily accessible by public transport, walking, or cycling. in managing sustainable events social aspects need to be considered (from eco-friendly procedures applied by employed companies and employing staff in a socially-conscious manner) as well as sharing and rising environmental awareness. with the paper we want to advance the understanding of sustainable event management, the way events research has advanced with this specific topic. it is important to think about how events contribute to sustainable development, rather than thinking about how to make individual events less damaging to the environment. we presented also examples of sustainable events (some good practices: from very big events like the expo to small local events). however, there is some empirical and data research missing in this field as well as the challenge of measuring the sustainability of an event, which is a good starting point for further research. towards sustainable event planning: current state of play, best practices, and challenges creating sustainable events 68 references 1. city of melbourne. 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(2023). sustainability our commitment to protecting the environment. retrieved on 10.05.2023 at https://www.wimbledon.com/en_gb/atoz/sustainability.html https://meetinghand.com/blog/advantages-management-principles-of-sustainable-events https://meetinghand.com/blog/advantages-management-principles-of-sustainable-events https://rra-podravje.si/novice/2023/food-wave-ulicni-festival-lokalne-hrane-2023 https://rra-podravje.si/novice/2023/food-wave-ulicni-festival-lokalne-hrane-2023 http://www.ebc-info.co.uk/website_files/sexi_q4_riv4.pdf https://theadriatic.si/sustainability/a-guide-to-sustainable-event-management/ https://www.oneplanetnetwork.org/knowledge-centre/resources/sustainable-events-guide-give-your-large-event-small-footprint https://www.oneplanetnetwork.org/knowledge-centre/resources/sustainable-events-guide-give-your-large-event-small-footprint https://2022cityfestival.urbact.eu/ https://www.wimbledon.com/en_gb/atoz/sustainability.html agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 70-82 70 principles of water infrastructure management in ensuring sustainable water use in ukraine n. mahats nataliia mahats state organization «institute of market and economic & ecological research of the national academy of sciences of ukraine», ukraine https://orcid.org/0000-0003-0799-9462 e-mail: mahatsnataliia@gmail.com abstract. the military actions in ukraine significantly aggravate the problems of sustainable water resources management. even in the pre-war period, the main funds of the drinking water supply and sanitation systems were characterized by an unsatisfactory technical condition, an extremely high percentage of wear and tear and required large capital investments. during the wartime, the water management infrastructure of ukraine became the object of massive attacks by the russian federation, which led to catastrophic consequences, such as the destruction of critical infrastructure facilities, lack of population access to drinking water supply, contamination of drinking water sources, complications of the sanitary and epidemiological situation, which poses a significant threat to the health of the nation. the purpose of the article is to determine the current state, trends in the restoration and development of the water management infrastructure in ukraine and the formation of the basic principles of its management to ensure sustainable water use in ukraine. the methodological tools of the study were such approaches and methods as a systematic approach, methods of system-structural analysis and synthesis, comparison and generalization, economic and statistical methods. keywords: ukraine’s water infrastructure, іmpact of the full-scale russian invasion, sustainable water use principles, blue economy, circular economy, social responsibility introduction water industry is an important component of any modern economy. water facilities are crucial for the socio-economic development of ukraine, as they provide centralized water supply and sanitation for the population, industrial and agricultural enterprises, as well as protect from negative consequences associated with water use. however, unfortunately, they can be subject to wear and tear and malfunction, which can lead to serious water quality problems, which in turn may affect public health and the state of the environment. this problem arises for a number of reasons, in particular, inadequate funding, inefficient management, lack of due attention to the protection and conservation of water resources. modern management tools, such as smart water management, aimed at water infrastrustructure operation based on sustainability and self-sufficiency. it can be carried out through the use of innovative technologies, such as information and control technologies and monitoring. thus, water management contributes to leakage reduction, water quality https://orcid.org/0000-0003-0799-9462 mailto:mahatsnataliia@gmail.com nataliia mahats 71 assurance, improved customer engagement and operational optimization (ramos et al., 2020). the state of the water infrastructure has a significant impact on sustainable water use in the country. the european union (eu) has implemented a series of directives aimed at ensuring the effective management of water resources and the preservation of water quality. these directives set out specific environmental requirements that water management facilities must adhere to in order to promote the sustainable use and protection of water bodies across eu member states. in the article (bolognesi, 2014) it is examined main laws and regulations concerning water standards enacted at european level. one of the main challenges for water infrastructure has always been the great quantity of electricity needed to extract, treat, convey and reuse water thus it becomes increasingly important to integrate renewable energy sources into water infrastructure systems. by harnessing renewable energy, it can be achieved a more sustainable and resilient water sector while mitigating the impacts of climate change. bieber et al. (2018), using a scenario based approach, propose innovative water supply and energy deployment policies, which address the provision of clean energy for population and demonstrate the potential effects of climate change. as long as water infrastructure systems in the developed countries evolved as products of the industrial revolution, design principles of that time were different. however, the existing water infrastructure design is incompatible with the present environmental, economic, and social principles of sustainability (apul, 2010). thus, it is necessary to implement modern principles of water infrastructure management, which will contribute to ensuring sustainable and efficient water resources use, meeting the population needs and preserving the environment. i. methodology the methodology of this study was based on a combination of statistical analysis of the results of water infrastructure management in ukraine in the pre-war 2020-2021 years, statistical and expert data on the impact of the of the russian federation on critical water infrastructure facilities in ukraine, with an analytical study of modern principles of sustainable development that will affect the main directions of the post-war restoration of ukrainian water infrastructure. the study was conducted from november 2022 to april 2023 in the following stages: 1) collection of statistical information on the main indicators of the state of the centralized water supply and sanitation systems in the regions of ukraine in 2020-2021; 2) analysis of recent reports and studies on the impact of the russian full-scale military aggression in ukraine in terms of determining the damage caused to ukraine's water resources and water infrastructure; 3) determination of the main principles of sustainable development in the context of the conceptual foundations of the circular economy, social responsibility, blue growth and the possible vectors of its application for the post-war restoration of ukraine's water infrastructure. the study was based on such information resources as the statistical-analytical report of the world bank, statistical data report of unicef, statistical data of the ministry for communities and territories development of ukraine, publications of ukrainian and foreign principles of water infrastructure management in ensuring sustainable water use in ukraine 72 scientists on the research topic according to the list of references (22). the following approaches and methods served as the methodological tools of the study: a systematic approach, methods of system-structural analysis and synthesis, comparison and generalization of a systematic search, economic-statistical methods. i.1. the analysis of the pre-war problems in the field of water management and the current state of the water infrastructure in ukraine the water infrastructure of ukraine consists of a large number of structures and objects, such as water intake facilities, water pressure towers, water supply and sanitation networks, treatment and hydrotechnical facilities, reservoirs, etc. before the war, the main funds of water industry of ukraine were mostly characterized by an unsatisfactory technical condition, since they were built in the 60s of the last century, they needed serious capital repair and in some cases complete reconstruction. according to the ministry for communities and territories development of ukraine (minregion, 2021), in 2020 the total length of water supply networks was 121921 km, including dilapidated and emergency networks – 46602 (38%); during the year, 991 km (2,1%) of the need were renewed. the total length of centralized sanitation networks was 46602 km, including dilapidated and emergency – 16618 km (35,6%); during the year, 186 km (1,1%) of the need were renewed. as can be seen from fig. 1 the rate of renewal of the water supply and sewerage network in ukraine is quite low and does not meet the needs of the population and the economy. fig. 1. the length and condition of centralized water supply and sanitation networks in ukraine in 2020. source: compiled by the author based on (ministry for communities and territories development of ukraine [minregion], 2021) another indicator of the state of the water infrastructure in ukraine is the accident rate of centralized water supply and sanitation networks, which can be caused by various factors, in particular, such as aging networks, insufficient funding, negligence in operation, etc. accidents on water supply and sanitation networks can lead to interruptions in the supply of drinking water, its pollution, flooding of territories, environmental pollution and pose a threat to human health. 0 20000 40000 60000 80000 100000 120000 140000 renewed, km renewal required, km total length, km 991 46.602 121.921 186 16.618 39.708 centralized sanitation networks centralized water supply networks nataliia mahats 73 so, in 2020, the average accident rate of the centralized water supply network in the regions of ukraine amounted to 1,83 accidents per 1 km of the network, in particular, the largest number of accidents was in the kiev region – 6,38 accidents and in odessa – 4,92 accidents per 1 km of centralized water supply network; the lowest – in the cherkasy region – 0,04. the average accident rate of the centralized sanitation network in the regions of ukraine amounted to 1,54 accidents per 1 km of the network, the largest number of accidents was in the kyiv region – 6,0 accidents and kharkiv – 4,3 accidents per 1 km of the centralized sanitation network; the lowest – in the kirovohrad region – 0,09 (fig. 2). fig. 2. accident rate of centralized water supply and sanitation networks in ukraine in 2020 * the statistical information was not available in the temporarily occupied territories source: developed by the author based on data (minregion, 2021) in rural areas of ukraine, in particular in the east and west of the country, the water infrastructure was less developed and had a low level of technical equipment. according to (minregion, 2022), in 2020-2021, more than 75% of rural areas in ukraine did not have access to centralized water supply and sanitation systems (table 1). 0,70 0,24 1,20 3,10 0,04 2,50 2,40 0,40 0,90 2,35 4,92 1,10 0,44 1,96 1,03 6,38 1,00 1,81 1,38 2,10 1,90 1,65 2,60 0,20 0,29 0,42 2,60 0,12 4,30 1,30 0,18 1,43 1,33 2,81 1,20 0,04 2,36 0,09 6,00 0,80 0,23 2,82 1,70 1,40 1,90 1,80 0 1 2 3 4 5 6 7 chernihiv chernivtsi cherkassy khmelnytsk kherson kharkiv ternopil sumy rivne poltava odesa mykolaiv city of kyiv lviv luhansk* kirovohrad kyiv ivano-frankivsk zaporizhzhia transcarpathian zhytomyr donetsk* dnipropetrovsk volyn vinnytsia ar crimea* accident rate per 1 km of the sanitation network accident rate per 1 km of the water supply network principles of water infrastructure management in ensuring sustainable water use in ukraine 74 table.1. provision of settlements in ukraine with centralized water supply and sanitation systems in 2020-2021 year cities urban type settlements rural settlements total provided with % total provided with % total provided with % centralized water supply 2020 314 310 98,7% 473 432 91,3% 22 204 5 382 24,2% 2021 314 310 98,7% 473 427 90,3% 22 204 5 215 23,5% centralized sanitation 2020 314 301 95,8% 473 319 67,4% 22 204 323 1,45% 2021 314 301 95,8% 473 319 67,4% 22 204 330 1,48% source: grouped by the author based on data (minregion, 2022) according to the tasks specified in the national report “sustainable development goals: ukraine”(2017), the share of the rural population with access to centralized water supply should increase from 17,2% in 2015 to 80% in 2030; the share of the rural population with access to improved sanitation should increase from 1,9% in 2015 to 80% in 2030, which is quite an ambitious target even in peacetime. thus, in 2021, only 23,5% of rural settlements in ukraine had access to centralized water supply and 1,45% to centralized sanitation. these circumstances can lead to the use of low-quality water from open sources such as rivers and ponds, which can subsequently cause the spread of diseases and threaten the health of the local population. in addition, the lack of sanitation systems can lead to environmental pollution, in particular water resources and soil. to solve the problems of providing rural settlements of ukraine with centralized water supply and sanitation systems, it is necessary to apply an integrated approach. in particular, according to professors m. khvesik and v. golyan (2014), the priority areas for the modernization of the water infrastructure in rural areas should be: increasing the volume of work on the construction of new and reconstruction of existing centralized water supply and sanitation systems in rural settlements; technical and technological restructuring of inter-farm and intra-farm networks of hydraulic structures; construction of those water infrastructure facilities that will contribute to the implementation of the european union directives. in a study by n. kovshun (2015) it is noted that a perspective economic mechanism for financing the water infrastructure of ukraine is a public-private partnership, when the state, to solve a specific problem for a water facility, involves private initiatives. solving the problematic issues of the water infrastructure functioning can improve the living conditions of the rural population and provide a more sustainable future for rural development in ukraine. nataliia mahats 75 i.2. the impact of the full-scale military aggression of the russian federation on critical water infrastructure facilities in ukraine the full-scale military aggression of the russian federation has a serious impact on water resources and water security both at the national and global levels. although, according to the geneva conventions (1949), countries involved in armed conflicts are obliged to observe and ensure compliance with international humanitarian law under any circumstances. however, there is a global trend towards increasing the use of water resources and infrastructure as a target or means of warfare in armed conflicts. the full-scale russian invasion and intense hostilities in ukraine led to the destruction of critical infrastructure, including water industry facilities. in the study (shumilova et al., 2023), the authors examined how military operations affected water resources and water management infrastructure during the first three months of the war. a total of 64 reported impacts on the water sector were investigated, in particular, such as interruption of water supply; disruption of sanitation networks and treatment facilities; pollution of surface waters due to the release of chemicals as a result of shelling and bacteriological contamination due to mass death of poultry; damage to dams; mine flooding; disruption of a hydroelectric power plant. the article (gopchak et al., 2022) provides methodological recommendations for calculating the damage from the destruction to fixed assets of the water sector for industrial and non-industrial purposes, and calculating the costs of restoring the infrastructure. in particular, it was noted that the volume of damage to active war zones will increase linearly over time at a rate of 0.274% per day. if the region is under occupation, the growth rate of damage is 0.137% per day. in the world bank report (2022), it is noted that the most affected water infrastructure facilities were water supply and sanitation networks, water treatment facilities, drinking water treatment plants. table 2 shows the water infrastructure facilities, their damage and estimated needs for reconstruction. the information provided is not exhaustive given the difficulty of obtaining data from temporarily non-government controlled areas. table.2. water infrastructure damage inventory and estimated recovery and reconstruction needs as of june 2022 object type type of damage reconstruction needs, usd million partially damaged completely destroyed total urgent / short-term mediumto long-term total water treatment facilities (units) 8 2 10 39,0 156,0 195,0 wastewater treatment facilities (units) 10 4 14 72,0 288,0 360,0 water pumping stations (units) 20 18 38 13,7 54,6 68,3 sewage pumping stations (units) 32 19 41 28,6 114,5 143,1 principles of water infrastructure management in ensuring sustainable water use in ukraine 76 water supply networks (km) 0 816,314 816,314 122,4 489,8 612,2 sanitation networks (km) 0 241,665 241,665 108,7 435,0 543,7 wells (units) 11 13 24 0,6 2,4 3,0 laboratories (units) 3 2 5 0,3 1,2 1,4 clean water tanks (units) 4 12 16 4,1 16,3 20,4 water towers (units) 8 24 32 1,6 6,5 8,2 total, usd million 391,0 1564,3 1955,3 source: compiled by the author based on data (world bank, 2022) water infrastructure recovery and reconstruction needs are based on damage and losses as of june 2022. at that time, they were estimated at about usd 1,955 million. partially damaged and destroyed infrastructure requires restoration on a priority basis. the necessary investments are divided into urgent short-term (usd 391,0 million) and medium-long-term (usd 1564,3 million). the needs assessment considers a “build back better” approach to recovering damaged/destroyed water infrastructure objects. the bulletin of the observatory of conflicts and the environment (2022) analyzes the impact of the war on the state of the water supply sector and on the water resources of ukraine, in particular, it is studied the most devastating incidents for the period februaryaugust 2022, such as the explosion of the dam of the kakhovskaya hydroelectric power station, damage to the mykolaiv pipeline, numerous accidents with damage to the pumping stations of the water supply system in the city of popasna and the seversky donets canal, the destruction of the irpen dam, which led to flooding. however, the greatest destruction ukraine’s critical infrastructure has experienced since october 2022, when the russian federation launched massive and methodical missile strikes throughout ukraine approximately every 10 days, in particular, water supply networks, sewerage systems and other water infrastructure facilities were damaged. in general, for the period october 2022 march 2023, the russian federation launched 908 missiles and 95 kamikaze drones in order to destroy critical infrastructure. as a result, according to unicef (2022), as of december 2022, 16 million ukrainians had limited access to water, sanitation and hygiene. the situation is especially critical in the east and south of ukraine, where people are forced to fight for access to water supply and sanitation services in order to meet their vital needs. the energy crisis in december 2022 – february 2023 further aggravated the problems: power outages affected the condition of water pumping stations and led to interruptions in water supply throughout ukraine. internally displaced persons in collective centers and host communities faced significant restrictions in access to water, hygiene and sanitation. restoration of water infrastructure facilities during the active phase of hostilities is an extremely difficult, but also the most important task for ensuring the safety and health of the nataliia mahats 77 population under martial law. the main obstacles to the timely resumption of the water infrastructure facilities functioning are: location of damaged objects in the occupied territory; location of damaged objects in the zone of active hostilities and shelling. however, in other territories of ukraine, updating water infrastructure facilities to an adequate technical condition is not a priority task for local authorities in wartime. ii. results – principles of post-war reconstruction and management of ukrainian water infrastructure on the basis of sustainable development the destruction of ukraine's water infrastructure leads to serious consequences for public health, in particular, to a decrease in the quality of drinking water and an increase in the risk of epidemics and other diseases that are transmitted through water. in addition, as a result of missile attacks, mining, especially in the zone of active hostilities, there is a lot of toxic explosive material that can pollute water sources and lead to the destruction of aquatic and semi-aquatic ecosystems. in the post-war period, ukraine will face many challenges in the field of water management. therefore, today, when forming a strategy for the post-war development of ukraine, it is necessary to take into account modern principles of water infrastructure management, which should be based on the main provisions of the circular economy, social responsibility, blue growth (fig. 3) and promote sustainable water use and conservation of water resources for future generations. management of water infrastructure according to the principles of the circular economy implies an increase in the efficiency of the use of water resources and a reduction in waste from the water sector. the 10r principles, developed by j. cramer (2017), are the basis for the introduction of a circular economy and can be applied in the water management sector to ensure the sustainable water use. refuse and reduce: reducing water consumption by eliminating inefficient water use, applying water-saving technologies and changing consumer behavior. redesign, repair, refurbish and remanufacture – these are important circular economy principles that can be applied to water supply and sanitation management to promote the sustainable and efficient use of water resources. for example, designing water systems that collect and use rainwater while reducing the amount of water needed from other sources; repairing leaking pipes and refurbishing wastewater treatment plants with more advanced treatment technologies; reconstruction of the existing water management infrastructure to extend its service life. reuse, re-purpose, recycle, recover – include recycle of treated wastewater for nonpotable needs such as irrigation, industrial processes, domestic needs, etc.; reuse of storm water for non-potable purposes such as industrial cooling or landscaping; recover of valuable resources from wastewater for use in agriculture or bioenergy production. the application of wastewater reclaiming and recycling practices is discussed in more details by the author in the preliminary study (khumarova & mahats, 2022). principles of water infrastructure management in ensuring sustainable water use in ukraine 78 fig. 3. interrelation of circular economy, blue growth and social responsibility principles in ensuring sustainable water use source: developed by the author having considered the main 10r principles of the circular economy, it is proposed to pay attention to such important principles of water infrastructure management as: regenerate – means restoring natural ecosystems and water resources to a healthy and productive state. regenerative practices can help reduce pollution, improve water quality, and promote biodiversity conservation. renew energy. the use of renewable energy sources can be a valuable tool for managing water infrastructure. using renewable energy sources to power water infrastructure can reduce energy consumption, reduce carbon emissions and promote sustainable development. thus, the use of renewable energy sources can include solar-powered water treatment, the use of wind energy to power pumps for transporting water through pipelines, the production of biogas from the treatment of wastewater sludge, etc. by applying these principles to the water sector, businesses and societies can improve water use efficiency, reduce waste, and promote sustainable water infrastructure management practices. blue growth as part of the sustainable development concept involves using the potential of marine and coastal regions for balanced development in economic, social and environmental aspects. this approach recognizes the importance of water as a critical resource for economic development and takes into account the needs of rational use to ensure the availability of water for future generations. based on the main provisions of the book by g. pauli (2010), it is identified the following principles and tools for blue growth in water blue growth principles: integration, nature-based solutions, science-based decisions, resilience, innovation, cooperation circular economy principles: 10r's: refuse, reduce, redesign, repair, refurbish, remanufacture, reuse, repurpose, recycle, recover; regenerate, renew energy social responsibility principles: inclusiveness, responsibility, safety, ethics, transparency sustainable water use nataliia mahats 79 management (table 3). the application of blue growth principles will contribute to the sustainable use of water resources, the conservation and restoration of aquatic ecosystems and the reduction of the human activity impact on the environment. table 3. blue growth principles and instruments in water infrastructure management principle meaning implementation tool integration ensuring interconnection between various sectors, such as water supply, sanitation, environmental protection, energy and transport, in order to achieve a common goal – the efficient and sustainable use of water resources.  integrated water management plan;  integrated environmental permit. nature-based solutions taking into account natural processes and environmental factors in the planning and construction of water management infrastructure, in particular, in the construction of reservoirs, sewage networks, dams, etc.  environmental impact assessment;  the concept of "green infrastructure";  ecosystem approach. science-based decisions use of scientific research and expert assessments for decision-making regarding the use of water resources and the management of water infrastructure.  data analysis and forecasting;  monitoring and control;  modeling; • expert systems. resilience the ability of water infrastructure management to maintain its performance and adapt to changes in the ecological, economic and social environment.  risk and vulnerability assessment of water management systems;  development a contingency plan;  development of strategies for rapid reaction to changes. innovation application of the latest technologies and innovative solutions to improve the efficiency and sustainability of the water infrastructure.  digital technologies;  renewable energy sources;  modern construction materials and technologies. cooperation provides for interconnection between various parties, including governmental and non-governmental organizations, public organizations, scientists, business and society to achieve the sustainable use of water resources.  public consultations;  involvement of stakeholders in the planning and decisionmaking process;  creation of platforms for information exchange and actions coordination. source: developed by the author principles of water infrastructure management in ensuring sustainable water use in ukraine 80 water infrastructure management based on the provisions of social responsibility implies an understanding of the water industry enterprises impact on society and the natural environment and a responsible attitude towards the consequences of this impact. this means that water management must respond to the needs of the public, ensure that services are accessible to all groups of the population, contribute to positive changes in society and prioritize environmental practices. sharing the vision of о. grishnova (2011) on understanding the essence of social responsibility, it is formed some of the most important principles, including: inclusiveness: ensuring equity in access to water resources for everyone, regardless of social status and other characteristics. this can be achieved by introducing programs and projects that help improve access to water and sanitation for all people, especially those who are in a vulnerable state. responsibility: management of the water infrastructure in accordance with the laws, rules and regulations relating to the water sector, and responsibility for the consequences of the use of water resources and water infrastructure. safety: provides for high-quality drinking water supply to the population, the proper technical condition of the infrastructure, as well as safe working conditions for employees of water industry organizations. ethics: upholding high standards of virtue and morality in the decision-making process of water infrastructure management. this means that decision-making should be based on objective facts and analysis, and not on personal interests or corruption. transparency: providing access to information on the state of water resources and water infrastructure, the decision-making process and the activities of management bodies through open data and reports. in previous studies of the author (khumarova & mahats, 2023), it was substantiated that the organization of water management on the basis of social responsibility will help ensure the harmonious development of the economy and the social sphere and will improve the quality of life of the population. conclusions after the end of the war, the restoration and development of water management infrastructure is one of the most important tasks for the economic recovery and the socioeconomic development of territories that have been destroyed as a result of military operations. after analyzing the general pre-war problems in the field of water management and the current state of the water infrastructure in ukraine, it was determined that in order to ensure sustainable water use in ukraine, the management of water infrastructure should be based on the basic principles of the circular economy, blue growth and social responsibility. at the same time, achieving sustainable water use in ukraine requires cooperation and coordination of actions of all stakeholders, including state authorities, public organizations, scientific and research institutions, the private sector and society (carius et al., 2004). until the end of hostilities and the complete de-occupation of the entire territory of ukraine, it is very difficult to assess the scale of the water infrastructure destruction and make suggestions on further trends in their restoration. however, based on today's global nataliia mahats 81 initiatives, the basic principles of sustainable development and the “build back better”, it is possible to propose the main vectors for the subsequent post-war recovery and development of ukraine's water infrastructure (kitowski et al., 2023): restoration and modernization of water management facilities, considering the environmental requirements of the european union directives; 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https://www.minregion.gov.ua/wp-content/uploads/2022/09/ukraine-rdna_report_print.pdf https://www.minregion.gov.ua/wp-content/uploads/2022/09/ukraine-rdna_report_print.pdf agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 145-153 145 global trends of modern inclusive economy i. zvarych, o. brodovska iryna zvarych¹, oksana brodovska² west ukrainian national university, b. havrylyshyn education and research institute of international relations/department of international economics, ternopil, ukraine ¹ orcid.org/0000-0001-5155-540x, e-mail: irazvarych@gmail.com ² orcid.org/0000-0003-4828-528x abstract. the purpose of the article is to highlight and work out the global trends of the modern inclusive economy. methodologically outline the main concepts on which modern inclusive economies are based, taking into account the war in ukraine, climate challenges, displacement of migration centers. the key point is the development of a model of a successful modern and exclusive economy. research on building inclusive workplaces, inclusion and entrepreneurship, corporate responses to the refugee and forced migration crisis, delivery of essential services to disadvantaged groups, enriched by diverse practitioners’ perspectives. although the global economy began to rebound in 2021, bringing some improvement in unemployment, recovery remains elusive and fragile. by the end of 2021, global economic recovery had been hampered by new waves of covid-19 infections, rising inflationary pressures, major supply-chain disruptions, policy uncertainties and persistent labour market challenges. сompanies need to ensure that they implement the right sustainable technologies in all of their processes and in every area of their operations in providing the inclusive economy, increasing implementation of the idea of circular economy. in deciding which circular economy actions to prioritise and integrate into climate-focused policies and measures, countries and companies are to be able to compare the relative merits, as well as emissions reductions, of individual circular economy measures. keywords: inclusive economy, circular economy, emission, waste, virgin material, value chain, pollution, climate introduction recent global upheavals, including the covid-19 pandemic and the war in ukraine, together with the various effects of digital transformation, have reinforced the historical legacy of discrimination and inequality. thus, according to the world economic forum's global gender gap report 2021, another generation of women is forced to wait for gender parity, as the global gender gap widened by one generation, from 100 years to 136 years. rigid norms and beliefs about sexual orientation, gender identity, and self-expression still challenge social and family acceptance of people around the world. at the same time, according to the world health organization, 1.3 billion people 17% of the world's population live with a disability. but inclusive economy should be developed with circular economy together. the circular economy is the so-called push factor for the decarbonisation of the economy. this trend is one of the main factor in development idea of inclusive economy. while the transition to renewable energy sources and the implementation of energy efficiency measures can tackle 55% of global emissions, circular economy strategies are required to tackle the remaining 45%. mailto:irazvarych@gmail.com global trends of modern inclusive economy 146 the necessary relationship between (ghg emissions/electric power generation, transmission and distribution) vs (circular rates) is shown at the level of 9%. in fact, it is very little, but at the same time reflects the real picture. because based on the circular gap report for 2022, the level of circularity of the economy is 8.6%. based on the growing importance of place-based strategic intelligence, kitagawa and vidmar (2023) present a conceptual framework for a new methodological approach to influence the shaping of subnational economic development. although scholarly attention towards inclusive economic development is emergent, its concept and evaluation remain ambiguous since few attempts have been made to elaborate on its definitions and goals (zhu, 2022). in this study, it is conceptualized and defined inclusive economic development, a productivity perspective for evaluating is proposed, and it construct an inclusive total factor productivity index based on data envelopment analysis. the purpose of the nonlinear relationship between financial inclusion and inclusive economic development in developed economies (timer & raza, 2022) is to investigate the nonlinear association between financial inclusion and inclusive economic growth (ieg) in developed economies. a block of g7 countries (germany, japan, canada, france, italy, the uk and the us) are considered in this study. nurazira, daud and ahmad (2022) examine the relationship between financial inclusion, digital technology and economic growth. a dynamic panel data analysis examines 84 countries since the gfc period. the results show that there is a positive and significant effect of financial inclusion and digital technology on country economic growth. in addition, digital technology plays a role in complementing the effects of financial inclusion on economic growth, implying that consolidation efforts should take place in improving financial ecosystems via digital technology infrastructure. the necessity of formally incorporating identity group stratification as a pillar alongside economic and political understandings of any political economy framework demonstrated in work of chelwa, hamilton and green (2022). they made case by juxtaposing mutual inadequacies and myopic limitations associated with two influential but polar political economy frameworks marxian and public choice theory-since neither framework formally incorporates an identity group stratification lens beyond class reductionism. in view of the 2020 global health crisis and its repercussions on the global economy (niekerk, 2020), the need to redirect conventional economic thinking towards securing global economic sustainability is most critical. the sustainable development goals (sdgs) are a significant move in this direction. however, in the past few years, a clearer understanding of inclusive economics and sustainability indicators have progressed our ability to reduce economic exclusion, chiefly represented by global inequality. the covid-19 pandemic has created shockwaves across the globe and impacted businesses and economies. ghosh, sigdyal and khursheed (2022) described enormous disruptive transformations that have happened in the work models and systems to enable businesses to flexibly operate, sustain, and remain agile in uncertain times. the future of work, which seemed uncertain post-pandemic, has reached normalcy due to the organisational resilience and strategic responses shown by organisational leaders and small businesses. although small businesses across the world have been impacted negatively leading to closures, financial crunches, and job losses worldwide, many have shown signs of resilience and recovery. the chapter throws light on the work transformations across economies and strategic iryna zvarych, oksana brodovska 147 responses to deal with them. it describes the challenges faced by various small businesses and the way they have been flexible and resilient. the chapter proposes a framework for building an inclusive economy that has been asserted to be the solution to a sustainable and resilient future in times of uncertainties and crises. the alzhanova, guzev, loginova and polkovnikov (2022) propose an econometric model to analyze the correlation between the indexes that evaluate digital technologies adoption in economic activities and social interactions and the indexes that quantify the attributes of an inclusive economy. firstly, open-access values were collected for the two groups of indicators, namely, the exogenous indexes measuring the effect of digital technologies on socio-economic systems, and endogenous indexes characterizing the economic development of society. whether financial inclusion and economic growth can sustainably release poverty alleviation effects in long term has been the focus of academia and government sector (chen, zhu, zhao, cao and cai, 2022). this article uses provincial panel data from 2004 to 2019 to examine the dynamic nonlinear connectedness between the financial inclusion, economic growth, income inequality, and poverty alleviation; the main objective is to reveal the direction and intensity of the long-term and short-term impact of each factor on poverty alleviation. by building a panel vector autoregression model (pvar), the comparison analyses of national, eastern, central, and western sample groups verify the existence of dynamic nonlinear connectedness among the four variables. inequalities and social exclusion are the consequences of imbalanced economic growth, prompting the world bank to establish new targets for eradicating extreme poverty and promoting shared prosperity. ismail, shah and rasid (2022) developed those ideas. surprisingly, the contemporary solution methods are consistent with shari'ah's objectives. stressing the importance of balanced growth, this study aims to quantify prosperity sharing in 28 developed and 14 developing nations by reshaping the notion of sustainable development from an islamic perspective. i. methodology in order to adequately define and evaluate, the authors used statistics from the eurostat database, in particular circular economy indices and gas emissions. at the same time, 27 countries of the european union were analyzed for the period from 2000 to 2020. namely we used statistics for such 2 indicators: recycling rate of municipal waste and net greenhouse gas emissions. the following scientific methods were used for the analysis and methodological approach: the method of absolute and relative chain transformations, and the method of generalization.the new methodological approach helps to identify the cyclical efforts that can contribute emissions decrease in any sector and highlights the key ways to diminish emissions in the building sector. we offer the author's methodological approach, which we did not meet in the works that were reviewed. 1) using the method of linear absolute and relative chain transformations, we will show the dynamics of two key indicators: gas emissions and the level of recycling (fig.1); 2) only after point 1, we can distinguish 4 types of strategies, singling out 1 main one (emissions decrease↓ recycling increases↑) and the top countries characterized by these 4 strategies are selected accordingly (fig.2); 3) on the basis of this, we highlight the so-called inclusive decarbonation platforms: stakeholders in those top countries with the most characteristic 'bypass' emission hotspots (table 1). global trends of modern inclusive economy 148 ii. results the purpose of the article and research of the authors was to prove the very idea that with the increasing implementation of the idea of circular economy, the functioning of various programs and strategies at different levels, the number of emissions will decrease and it will increase the effect of inclusive economy. figure 1. analysis of circular economy in europe source: made by authors a larger cycle and more efficient use of materials opens up new opportunities to further reduce greenhouse gas emissions. therefore, we analyzed european countries according to the eurostat database and calculated linear absolute and relative chain transformations for two key indicators: emissions and the recycling rate (figure 1). after that, they choose the countries in which three strategies are followed (figure 2): 1) gas emissions decrease ↓, and recycling increases↑ 2) gas emissions are decreasing ↓ , and recycling is decreasing ↓ 3) gas emissions increase ↑ and recycling increases ↑ 4) gas emissions increase ↑ and recycling decrease ↓ figure 2. linear absolute chain transformations, 2020/2000 + top country. source: made by authors -6 -4 -2 0 2 4 6 e u 2 7 b e lg iu m b u lg a ri a c ze ch ia d e n m a rk g e rm a n y e st o n ia ir e la n d g re e ce s p a in f ra n ce c ro a ti a it a ly c y p ru s la tv ia li th u a n ia lu xe m b o u rg h u n g a ry m a lt a n e th e rl a n d s a u st ri a p o la n d p o rt u g a l r o m a n ia s lo v e n ia s lo v a k ia f in la n d s w e d e n ic e la n d n o rw a y s w it ze rl a n d u n it e d k in g d o m recycling rate of municipal waste [cei_wm011] net greenhouse gas emissions (source: eea) [sdg_13_10] iryna zvarych, oksana brodovska 149 the new methodology can help to identify which circular economy measures in each sector can make the most promising contribution to reaching the goals of reducing emissions and achieving climate neutrality in europe and in the end of our idea – to increase effectiveness of inclusive economy. in the building sector, the selected circular economy measures could lead to a reduction of up to 61% of material-related greenhouse gas emissions over the life cycle of buildings. greenhouse gas emissions can be reduced by making material flows more efficient and by preserving the utility and value of materials and products for as long as possible. the european green deal emphasises the importance of transforming the european economy into a more cyclical one. this strategy is a key element of the european commission's vision for a climateneutral economy by 2050 (ec, 2018a). improving circularity and increasing the efficiency of materials management can take different forms: • extending the service life of the product • reduction of material losses • recycled materials and products • prevention of downcycling • replacement of materials with intensive emissions of greenhouse gases with materials with lower emissions. table 1. drivers of the transformational shifts (decarbonation platforms: stakeholders) country inclusive decarbonation platforms: stakeholders (country) portugal crave is a content and ecommerce platform all in one, with a focus on waste-based and zero-waste products in the home, fashion and lifestyle categories. spain the life circ-elv project has developed a new process for managing end-of-life vehicles to recover bumpers and fuel tanks, recycle the materials and use them to manufacture pipes and new parts for vehicles. using this recycled plastic in products from this industry and others will help reduce the carbon footprint by 85%. latvia in latvia, a project developed by the ministry of agriculture (in cooperation with private investment) seeks to improve biomass production in the country’s forests. cyprus green dot cyprus is the first collective compliance system for packaging and packaging waste in cyprus. lithuania the lithuanian commune diy, a team of skateboarding professionals and enthusiasts, collects old, broken canadian maple hardwood skateboards that have lost their original purpose and recycles them 100 %. the new products made of skateboards are sustainable, strong and have a new life span which is longer than the one of an average skateboard deck. tarkett is pioneering post-use flooring recycling in europe. it is working with ikea to transform used tarkett flooring from the ikea kungens global trends of modern inclusive economy 150 kurva store into new flooring. sweden recreate pushes towards circular construction by investigating the system changes needed in the whole ecosystems of construction and demolition. finland the interreg north-west europe project seramco (secondary raw material for concrete precast products) focused on researching and promoting the use of secondary raw materials from construction and demolition waste (cdw). germany iclei is a global network working with more than 2 500 local and regional governments committed to driving local action towards a social and ecological transition. in future, whether purchasing services or products such as buildings, furniture and food, local authorities will need to look for increasingly sustainable supplies. italy crave is a content and ecommerce platform all in one, with a focus on waste-based and zero-waste products in the home, fashion and lifestyle categories. source: made by authors nevertheless, when deciding which circular economy actions to prioritise and integrate into climate-focused policies and measures, countries and companies are to be able to compare the relative merits, as well as emissions reductions, of individual circular economy measures. in accordance with the direction of transformations, we consider countries with the so-called top transformational strategies and offer for your consideration those inclusive platforms and stakeholders that, in our opinion, are the drivers of these transformational shifts (table 1). there has been a recent acceleration of ambitions on decarbonization, with numerous countries adopting targets to achieve net-zero carbon emissions by the middle of this century. although the predominant policy approach to decarbonization over the past two decades – the replacement of fossil fuels with renewables in power generation, and improvements in energy use efficiency – has contributed the largest proportions of offsets to co2 emissions from economic growth in recent years, there are two reasons why this approach may leave some sectors un-decarbonized in the context of accelerated ambitions. first, there is evidence that direct electrification may not be possible, for technical and/or economic reasons, in ‘hard-toabate’ sectors outside of electricity generation. decarbonization in these sectors will require costly rebuilds and retrofits, and the additional costs could render some products uncompetitive on world markets. and second, the predominant approach to decarbonization has disregarded the globalization of trade and supply chains and the spatial dissociation between places of extraction, production, and consumption. in the current ‘linear’ decarbonization model, a sole focus on the reduction of emissions from energy production is likely to be insufficient to achieve net-zero objectives, as emissions would need to decline very rapidly to offset the expansion in economic output, which is not the case at present. iryna zvarych, oksana brodovska 151 figure 3. new trends of global inclusive economy source: made by authors so, the main trends and vectors of modern inclusive economy is described in figure 3.  inclusive economy as a new world paradigm;  covid-19 – changing game rules;  new economic structure (inclusive policies);  impact of 5g, 3d, holographic technologies;  "green" factor;  technological factor;  social redistribution;  social inclusion – transition of poor people, poor countries into their existence;  social unrest;  the position of governments regarding;  "personal philosophy";  capitalization of investments;  the latest infrastructure – the architecture of the digital world in the digital economy at the global level;  "green impetus" a green impulse in a "green" world. conclusions inclusive economy and crises in the world need the regulation of government countries because they have many different resources needed. governments do the most work during a crisis (financial, pandemic). global business is changing not only under the influence of the pandemic but as now war. now one of the crises, which is the background, is an economic crisis (environmental crisis). such a megatrend as the globalization of all sustainability will be part of how to do business. these are not external events affecting the business. this is part of how we will do business. this is not the "new normal" – we just learn from it. society is a crucial part of recovery and need the critical role of governments. global trends of modern inclusive economy 152 kitagawa and vidmar (2023) based on the growing importance of place-based strategic intelligence, present a conceptual framework for a new methodological approach to influence the shaping of subnational economic development. we also propose our new methodological approach but in another structure – using circular indicators and present circular economy as inclusive circular economy. alzhanova, guzev, loginova and polkovnikov (2022) propose an econometric model to analyze the correlation between the indexes that evaluate digital technologies adoption in economic activities and social interactions and the indexes that quantify the attributes of an inclusive economy. i strongly agree but we develop this idea in our article. we used the method of linear absolute and relative chain transformations, we will show the dynamics of two key indicators: gas emissions and the level of recycling. in 2022, a series of events led to rapid changes in the world economy. the war between russia and ukraine, complicated by sanctions imposed by the united states and the european union, disrupted the recovery process after the global pandemic. the hostilities caused serious upheavals, which, accordingly, led to an increase in commodity prices. this situation further exacerbated inflation caused by the recovery in demand amid supply chain disruptions. central banks around the world have been forced to tighten financial constraints to reduce inflation. this means that central banks have had to normalize the loose liquidity/monetary policies seen during the pandemic earlier than expected to curb rising inflationary pressures. in 2023, due to uncertainty, the global economic situation will still be difficult due to the emergence of uncertainty. global economic growth could potentially be hampered by several lingering risk factors: • geopolitical tension, • consistently high inflation, • rising interest rates and likely a recession. inflation and an increase in interest rates led to a decrease in confidence in the prospects of economic growth. the sharp rise in interest rates, especially in the "developed" countries, including the us, uk and european countries, has raised new concerns that the global economy will fall further into recession. adding to the pressure is the fact that one of the largest economies, china, recorded worse-than-expected economic growth as the country is still following a zero-covid-19 policy that has led to a partial lockdown of the economy. a slowdown in the growth of the world's largest economies will have significant consequences for the global outlook. according to forecasts of the international monetary fund, economic growth will decrease from 6.1% in 2021 to 3.2% this year. the economy is projected to slow to 2.9% in 2023. in 2023, the implementation of innovations and developments in transformative technologies, such as: •artificial intelligence, • internet of things (iot), • virtual and augmented reality (vr/ar), • cloud computing, • blockchain and high-speed network. • protocols (5g). in addition, such transformative digital technologies do not develop in isolation from each other, and in the future the boundaries between them will disappear. new solutions for iryna zvarych, oksana brodovska 153 advanced operations, hybrid and remote work, business decision-making, and automation of manual, routine, and creative workloads combine these technologies in ways that enhance each other. with this in mind, in the near future we will be able to create "smart enterprises" where systems and processes work together to perform simple and everyday tasks in the most efficient way. to prepare for this, companies need to ensure that they implement the right technologies in all of their processes and in every area of their operations. today, every entrepreneur should understand how ai and the other technologies mentioned above affect their business and industry. more efficient sales and marketing, better customer service, more efficient supply chains, products and services that are more responsive to customer needs, and optimized manufacturing processes are all out in the open, and in 2023 the barriers to access will be lower. references 1. alzhanova, f., guzev, m., loginova, e. and polkovnikov, a. (2022). the development of inclusive economy based on digital technologies: econometric assessment of formation, new technology for inclusive and sustainable growth, pp 99–110, 2022, doi: 10.1007/978-981-16-9804-0_9. 2. chelwa, g, hamilton, d., green, a. (2023). identity group stratification, political economy & inclusive economic rights, daedalus, volume 152, 2023 https://doi.org/10.1162/daed_a_01973 3. chen, z., zhu, h., zhao, w., cao, b., and cai, y. (2022) dynamic nonlinear connectedness between the financial inclusion, economic growth, and china’s poverty alleviation: evidence from a panel var analysis, complexity in finance and economics, 2022 https://doi.org/10.1155/2022/9584126 . 4. daud, s., ahmad, a. (2023) financial inclusion, economic growth and the role of digital technology, finance research letters, volume 53, may 2023, 103602, https://doi.org/10.1016/j.frl.2022.103602 5. ghosh, n., sigdyal, p., bakersfield, ramya u. and khursheed, r. (2022) post-covid-19 transformations for future of work and small business sustainability: towards an inclusive economy, sustainability and the future of work and entrepreneurship for the underserved|pages: 27, 2022, doi: 10.4018/978-1-6684-4322-4.ch002 6. ismail, n., eskandar, m. (2022) promoting an inclusive economy: the relevance of sustainable development and islamicity prosperity index, journal of islamic monetary economics and finance, volume 8, 2022 https://doi.org/10.21098/jimf.v8i4.1530 7. kitagawa, f., vidmar, m. (2023) strategic intelligence for the future of places: enabling inclusive economic growth through the opportunity areas analysis tool, regional studies, volume 57, pp. 656-669, 2023. https://doi.org/10.1080/00343404.2022.2045267 8. niekerk, a. (2020) inclusive economic sustainability: sdgs and global inequality, sustainability 2020, 12(13), 5427; https://doi.org/10.3390/su12135427 9. timer, s. and raza, s.a. (2022) nonlinear relationship between financial inclusion and inclusive economic development in developed economies: evidence from panel smooth transition regression model, international journal of social economics, 2022 https://doi.org/10.1108/ijse-04-2022-0223 10. zhu, c. (2022) conceptualising and evaluating inclusive economic development: a productivity perspective, development studies research, volume 9, pp. 219-229, 2022. https://doi.org/10.1080/21665095.2022.2112729 https://doi.org/10.1162/daed_a_01973 https://doi.org/10.1155/2022/9584126 https://doi.org/10.1016/j.frl.2022.103602 https://doi.org/10.1080/00343404.2022.2045267 https://doi.org/10.3390/su12135427 https://doi.org/10.1108/ijse-04-2022-0223 https://doi.org/10.1080/21665095.2022.2112729 agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 135-144 135 how are businesses adopting circular practices – empirical study on the case of georgia and selected eastern european countries t. zhghenti, v. chkareuli, m. r. de haro, v. m. moreno, d. atstaja tsotne zhghenti¹, vakhtang chkareuli², manuel rios de haroº, valentin molina morenoºº, dzintra atstaja³ business and technology university, georgia ¹ orcid.org/0000-0002-6779-172x, e-mail: tsotne.zhghenti@btu.edu.ge ² orcid.org/0000-0001-9484-2484 university of granada, spain º orcid.org/0000-0002-4329-370x ºº orcid.org/0000-0003-2679-3195 ba school of business and finance, latvia ³ orcid.org/0000-0002-9411-7212 abstract. the shift towards circular practices requires a variety of supportive actions from different parties, such as education from academic institutions, institutional support from government and policymakers, and financial aid. our research aims to provide data on the adoption of circular practices in georgia and selected eastern european countries. the findings of the research summarize the trends of adoption of circular practices among firms in different economies. in today's rapidly changing business environment, companies are under increasing pressure to reduce their environmental impact and embrace sustainable practices. circular economy is seen as a promising solution to these challenges, as it shifts the focus from linear models of production and consumption to a closed -loop system where waste is reduced and resources are conserved. the concept of circular economy has gained significant traction in recent years, as companies seek to reduce their environmental impact and achieve long -term sustainability. by adopting circular practices, companies can reduce the cost of goods sold, improve resource efficiency, and promote a cleaner environment. however, the adoption of circular practices requires a significant change in organizational culture, which can be challenging for many businesses. our research aims to provide practical information for policymakers and stakeholders from the private sector on the adoption of circular practices in georgia and selected eastern european countries. the results of the research will provide valuable insights into the trends of adoption of circular practices am ong firms in different economies and highlight the benefits of embracing circular economy. in conclusion, the transition to circular practices is a highly sought -after trend for businesses seeking to reduce their cost of goods sold, promote sustainability, and benefit from a cleaner environment. the adoption of circular practices requires a significant change in organizational culture, which can be challenging for many businesses. our mailto:tsotne.zhghenti@btu.edu.ge how are businesses adopting circular practices – empirical study on the case of georgia and selected eastern european countries 136 research aims to provide practical information for policymakers and stake holders from the private sector on the adoption of circular practices in georgia and selected eastern european countries and summarize the trends of adoption of circular practices among firms in different economies. keywords: circular business, circular economy, georgia, ce business models, ebrdeib-wbg enterprises survey. introduction in a modern era, scarcity has become a major research dimension for many economists, which is basically linked to the limited resources on the one hand and limitless wants of people on the other. governments, policymakers, scientists and the businesses are rethinking the traditional paradigm of economics, which is based on a linear approach (take-make-dispose) and should be changed towards the circularity. in this sense, circularity means to redesign operations on various levels, so that processes become more sustainable and eco-friendlier. by managing finite resources, a circular economy promotes a continual positive development cycle that maintains and increases natural ca pital, optimizes resource yields, and reduces system risks. most fundamental incentives for the companies to transform linear business operations to circular ones, still lays in the willingness to reduce negative environmental impacts. on top of that, businesses are seeing the potential fruits of improving resource usage efficiency, thus reducing cost of goods sold, increasing competitive advantages and easing access to new markets. also, environmental regulations and institutional incentives provided by policy-makers and governments, especially in developed countries are pushing companies to seek for alternative ways of doing business to reduce emissions and negative impact environment. in some cases, besides restrictions governments are providing subsidies and tax deductions to support circular business models. activities from circular economy, which covers almost all industrial sectors, is increasing in terms of generating new revenues, reducing costs, and encouraging innovation. this growth is driven by shifts in regulation and evolving consumer attitudes. the topic is getting very actual in georgian economic policy too. however, there is a lack of relevant local academic publications and related business statistics. for this reason, the research is using database from ebrd-eib-wbg survey to calculate and provide detailed numbers on usage of circular practices in georgian firms and to analyze general trends between other economies in the survey. furthermore, the research can also dive deeper into exploring the challenges and opportunities that georgian firms face in implementing circular economy practices, as well as identifying potential gaps in current policies and regulations that may be hindering the development of a circular economy in the country. additionally, research can investigate on the potential benefits of a circular economy for the country's economy, environment and society, and how it can contribute to achieving sustainable development goals. within the framework of the research, one of the factors is the assessment of developed countries with certain indicators, which is an important point for the implementation of additional analysis. tsotne zhghenti, vakhtang chkareuli, manuel rios de haro, valentin molina moreno, dzintra atstaja 137 i. literature review it was already mentioned in the introduction that local academic publications related to concept of circular economy are extremely rare in georgia. however, several authors are discussing the general landscape of establishing circular economy in georgia (gubeladze & pavliashvili, 2020; pavliashvili, & prasek, 2020; jishkariani, et. al.; 2021; buachidze et. al.; 2021). additionally, some publications discussing the green economy opportunities from finance industry (aslanishvili, & omadze, 2019) or from the perspective of investemt sector (verulidze & miceikienė, 2021). another study (chachkhiani et al., 2022) provides a qualitative and quantitative evaluation of the solid waste management system in kutaisi, georgia and the imereti region. it reveals that share of recyclables is higher in urban areas and commercial centres. on the other hand, there are plenty of academic publications which analysing circular business models or generally circular practices in firms from eastern european countries (malinauskaite et al., 2017; muizniece et al., 2019), especially discussing challanges for circular business models in baltic countries (rizos et al., 2016; uvarova et al., 2020, atstja et al., 2021). accordingly, the research has focus on international publications which can provides useful insights or methodological notes to explore relevant data to analyse the current state of usage circular practices in local companies in georgia. the few modern studies have used the green module from ebrd-eib-wbg enterprise surveys to analyze green and circular economy trends in business for selected countries. a study conducted by kalantzis et al. (2022) is analyzing green management and green investments of firms and distinguish capital intensive or non-capital-intensive investments. the results are provided on regional level. the paper uses data from ebrd-eib-wbg enterprise surveys to examine the determinants of green investment strategies in firms. it also uses logistic iv regression to analyze the data and finds that financially constrained firms pursue fewer mitigation measures while more climate-aware firms pursue more mitigation measures. whether, other publication has focus on levels of green management practices by country (martin et al. 2022). that research used three different data sets including data set was from the ebrd-eib-wb enterprise surveys, which provided information on firms' credit constraints, green management, and green investments. the purpose of this analysis was to understand the relationship between credit constraints, green management, and green investments and their impact on pollution and greenhouse gas emissions. another research is measuring losses from extreme events based on the green module (benincasa et al. 2022). the one recent publication used that survey for arguing that green management positively impacts on labor productivity, sales, and innovation (fernandez, v. 2022). this study also finds that green management practices are influenced by various factors such as peer effects, management quality, customer requirements, and foreign ownership. however, previous studies did not displaying the specific rates of adoption the different green/circular practices by firms for country level. additionally, none of them has focus on insights of georgia which is our priority research example. furthermore, the literature review is showing that there is a lack of research that is exploring the circular economy from the how are businesses adopting circular practices – empirical study on the case of georgia and selected eastern european countries 138 consumer's perspective. therefore, the current study aims to fill this gap by exploring the sharing economy characteristics from the consumers' perspective in georgia. the research will underline and understand the current problems to prepare recommendations for the upcoming challenges. the quantitative and qualitative findings from the paper can be source material for future researchers in this field in georgia. ii. methodology the primary source of our research is the database by ebrd-eib-wbg enterprise surveys, which was conducted between 2018 and 2020. this database covers approximately 28,000 enterprises in 41 economies of the european union, eastern europe, central asia, and the middle east and north africa. these economies include albania, armenia, azerbaijan, belarus, bosnia and herzegovina, bulgaria, croatia, cyprus, czech republic, egypt, estonia, georgia, greece, hungary, italy, jordan, kazakhstan, kosovo, kyrgyz republic, latvia, lebanon, lithuania, malta, moldova, mongolia, montenegro, morocco, north macedonia, poland, portugal, romania, russia, serbia, slovak republic, slovenia, tajikistan, tunisia, turkey, ukraine, uzbekistan, and the west bank and gaza. our research focuses on a special module of the survey, the green economy module, which covers basic green management practices and green investments. for the purposes of our research, we have selected 10 questions for further analysis and discussion. these questions (bmgc23a-bmgc23j) are related to a firm's recent experience (over the last 3 years) of adopting circular measures (practices or technologies). the research calculates the share of firms (on a country level) that have adopted these circular measures. it uses weights according to the median eligibility from the enterprise surveys database. the following 10 indicators were calculated according to this methodology: share of firms that had adopted specific practices over the last three years:  heating and cooling improvements  more climate-friendly energy generation on site  machinery upgrades  energy management  waste minimization, recycling, and waste management  air pollution control measures  water management  upgrades of vehicles, vessels, and aircraft in the fleet  improvement of lighting systems  other pollution control measures the data for the research was collected from eligible firms, who were asked a set of questions with three possible answers: "yes," "no," or "do not know." to calculate the value for each question, the sum of the weights of the "yes" answers was divided by the total weight of all eligible enterprises for that specific question. this provided an overall understanding of the situation, but to gain a more in-depth insight, the research also analyzed the data in a more granular manner by breaking it down into regions and industries, with a focus on georgia. by doing this, the research was able to provide a more comprehensive picture of the situation in the state, including specific trends and patterns at the regional and industry levels. tsotne zhghenti, vakhtang chkareuli, manuel rios de haro, valentin molina moreno, dzintra atstaja 139 overall, this research provides valuable insights into the adoption of circular measures by companies in a diverse range of economies. by focusing on a specific set of questions related to circular measures, the research is able to provide detailed information on which practices are being adopted most frequently and in which countries. additionally, the use of weights based on median eligibility ensures that the results accurately reflect the experiences of the surveyed companies. iii. results and discussion figure 1 presents the results of an analysis of the share of enterprises that have implemented selected circular practices in georgia over the last three years. the data was obtained from the ebrd-eib-wbg enterprise surveys, which were conducted between 2018 and 2020. the survey covered a sample of enterprises in georgia, and included a special module on green economy practices, from which the data for this analysis was extracted. the results of the analysis indicate that the highest adoption rates among the selected circular practices were for machinery upgrades (43.0%), improvement of lighting systems (42.0%), and upgrades of vehicles, vessels, and aircraft in the fleet (37.1%). heating and cooling improvements were also relatively frequent among georgian enterprises, with an adoption rate of 34.6%. however, practices related to recycling and waste reduction had significantly lower adoption rates, with only 20.9% of firms reporting having implemented these practices. the data also reveals that the adoption of other circular approaches related to pollution reduction or climate-friendly initiatives was relatively low among georgian enterprises. only 13% of firms reported having implemented air pollution control measures, and 8.5% reported having implemented other pollution control measures. additionally, only 6.2% of firms reported having adopted more climate-friendly energy generation on-site. the adoption of practices related to energy management and water management was also relatively low, with 17.1% and 16.0% of firms reporting having implemented these practices over the last three years, respectively. figure 1: share of firms which adopted specific measure over last 3 years in georgia source: author’s own calculations on database of ebrd-eib-wbg enterprise surveys conducted in 2018-2020. how are businesses adopting circular practices – empirical study on the case of georgia and selected eastern european countries 140 the results of our research on the adoption of circular practices in georgia found that the capital city of tbilisi has a higher share of firms implementing these practices (7.4% vs 9.9%) compared to other regions. out of the 10 indicators analyzed, tbilisi had higher adoption rates for 9 of them, with the only exception being "other pollution control measures". the study also revealed that large-size enterprises (47.25%) were more likely to adopt circular practices compared to medium (29.4%) and small enterprises (19.7%). these findings highlight the importance of creating an enabling environment for circular practices, particularly in regions outside of tbilisi, to encourage more widespread adoption. additionally, there is a need to develop support mechanisms for medium and small enterprises to adopt circular practices and contribute to a more sustainable future. it should be noted that these findings are consistent with the results from the survey of all 41 economies included in the ebrd-eib-wbg enterprise surveys. the highest average indicator among all economies surveyed was for machinery upgrades (41.0%), which is also the most frequent circular practice adopted by georgian enterprises (43.0%). another research finding is that most of the indicators for georgia are close to the average numbers for all the countries surveyed in the ebrd-eib-wbg enterprise surveys. however, there is a significant gap in the adoption of "waste minimization, recycling and waste management" practices, which are adopted by only 20.9% of georgian enterprises, while this indicator is significantly higher in most of the other countries surveyed (average value 36.0%). this can be seen in figure 2, which displays the share of firms that have adopted waste management practices for selected eastern european and baltic countries. the rate is notably higher in eu countries, and georgia's score is lower than that of moldova or ukraine. it has been also noticed that the rate of waste management in businesses of varying sizes in the state of georgia is significantly lower in comparison to other regions. this lack of proper waste management practices can have adverse effects on the environment and public health. it is crucial that firms in georgia make an effort to improve their waste management processes to ensure a cleaner and safer future for all. figure 2: share of firms which adopted waste management measures over last 3 years in selected countries source: author’s own calculations on database of ebrd-eib-wbg enterprise surveys conducted in 2018-2020 tsotne zhghenti, vakhtang chkareuli, manuel rios de haro, valentin molina moreno, dzintra atstaja 141 additionally, georgian enterprises have lower ranks in terms of introducing energy or water management measures. this can be seen in figure 3, which displays the adoption rates for selected indicators in eastern european and baltic countries. estonia and latvia are the leaders in terms of average adoption rates for the 10 indicators analyzed. based on the data provided, it is evident that the baltic countries, specifically estonia and latvia, have higher adoption rates for circular economy practices compared to georgia. these countries have consistently higher rates in various indicators such as machinery upgrades, waste management, energy management, water management and lighting improvements. for instance, estonia has an average adoption rate of 69.8% for machinery upgrades, which is significantly higher than georgia's rate of 43%. this trend can also be observed in other indicators such as green energy generation, where estonia has an average of 11% and latvia has an average of 9.7% which is relatively higher than the 6.2% in georgia. overall, the research provides valuable insights into the adoption of circular practices by firms in georgia and can be used to compare the country's achievements with those of other economies surveyed. it highlights the areas in which enterprises in georgia have made the most progress in terms of circular adoption, as well as areas where there is room for improvement. additionally, the findings of this research can inform the development of policies and initiatives aimed at promoting the adoption of circular practices among georgian enterprises, particularly in smaller and medium-sized enterprises and other regions of the country. figure 3: share of firms which adopted energy or water management measures over last 3 years in selected countries source: author’s own calculations on database of ebrd-eib-wbg enterprise surveys conducted in 2018-2020 conclusion and recommendations the adoption of circular practices by enterprises in developing countries, including georgia, is still relatively low. despite the recognized potential for circular economy (ce) to promote sustainability and reduce waste, many companies are not yet investing in or considering the implementation of circular approaches in their business operations. the transition to circular business models can be a challenging process, with various obstacles that how are businesses adopting circular practices – empirical study on the case of georgia and selected eastern european countries 142 companies of different sizes and industries may face. one of the most significant obstacles is the lack of financial capability, as implementing circular practices often requires investments in new technologies and equipment. this is particularly challenging for small and medium-sized enterprises (smes) that may not have the resources to make these investments. additionally, economic policies in many developing countries still tend to favor linear business models, providing little incentive for companies to adopt circular practices. another obstacle that companies may face is a lack of knowledge about ce business models and the current state of the circular economy. despite the growing interest in the topic, many companies still lack an understanding of the benefits and potential challenges of implementing circular practices. this lack of knowledge can make it difficult for companies to identify opportunities for circular practices in their operations and to develop effective strategies for their implementation. in such developed countries, as we identified in the part of the research by the principle of random selection, there are also many challenges in the way of implementing the circular economy, therefore a developing country like georgia must definitely develop its own way in terms of the development of circular processes. to overcome these obstacles, it is essential to create and distribute knowledge about ce business models, the current state of the circular economy, and the potential challenges that companies may face. this can be done through various means, such as training and education programs, workshops, and networking events. additionally, targeted support and funding for smes to implement circular practices can help to overcome financial barriers and encourage the adoption of circular practices. furthermore, the economic policies should be adjusted to support and encourage the implementation of circular economy in the country. in conclusion, the adoption of circular practices by enterprises in developing countries, including georgia, is still relatively low. the transition to circular business models can be a challenging process, with various obstacles that companies of different sizes and industries may face. however, by creating and distributing knowledge about ce business models and providing support and funding to overcome financial barriers, we can encourage the adoption of circular practices and promote sustainable and circular economic growth in developing countries. additionally, economic policies should be adjusted to support and encourage the implementation of circular economy in the country, which will help to overcome the lack of knowledge of the circular economy among companies and promote sustainable business models. overall, a concerted effort is needed to support the transition to circular economy and promote sustainable business practices in developing countries. acknowledgement this work was prepared at business and technology university, georgia. references 1. tašner, v., & gaber, s. 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(2021). green economy as a new opportunity to stimulate export and attract investments, the case of georgia. management theory and studies for rural business and infrastructure development, 43(4), 468-474. agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 83-92 83 economic recovery mechanisms in wartime a. mazaraki, g. duginets anatolii mazaraki¹, ganna duginets² state university of trade and economics, ukraine ¹ orcid.org/ 0000-0003-1817-0510, e-mail: rektor@knute.edu.ua ² orcid.org/0000-0003-3708-3666, e-mail: g.duginets@knute.edu.ua abstract. restoring national competitiveness requires a lot of time, effort, and financial investment, and, in particular, involves a structural sectoral transformation, reorientation, and rethinking of target orientations and levers of the economy. analysis and systematization of the experience gained by other countries that were in a situation similar to the unjustified russian invasion of ukraine on february 24, 2022, working out ways to solve problems will become a road map for recovery after the victory and in the process of rebuilding the country. the purpose of the article is to determine the key economic recovery mechanisms in wartime on the study of similar recovery experience in world system. as a result of the study, the main drivers and levers of economic recovery are determined, which will help to restore the national economy step by step, and alternative methods are proposed, which are based on a combination of the experience of different countries. keywords: economic recovery, main areas of development, post-war recovery experience, economic potential, economic policy. today, the concept of war is more multifaceted than in the past. nowadays, war is not only about an armed conflict between states or a bloc of states, which is limited to crisis processes in the socio-economic systems of the warring parties. in the context of the rapid acceleration of globalization at the end of the twentieth century and the creation of an extremely interdependent system of international relations, an open war between developed economies causes the emergence of a "perfect storm" for the entire world economic system. the situation is further complicated by the fact that russia has launched its full-scale invasion against ukraine when the global economy had not yet recovered from the effects of the coronavirus crisis, especially in the healthcare sector, and the emergence of geopolitical tensions, economic nationalism and populism. this ultimately leads to the realization that global society needs to immediately and promptly find ways to mitigate and overcome the growing crisis. but the problem is, the full consequences of war are best understood only by those societies that experience it themselves. in view of the above, the relevance of this study is confirmed by the importance of highlighting the economic and social consequences of russia's full-scale invasion of ukraine. the theoretical and methodological basis for this study is the scientific work devoted to determining the peculiarities of the restoration of states that have had a similar experience of invasion of their territory by other countries. thus, the work of political scientists and scholars who paid attention to the nature of military conflicts and the search for political mailto:rektor@knute.edu.ua mailto:g.duginets@knute.edu.ua 84 solutions to them (von clausewitz, 2005; yamazawa, 1990); scholars who studied the ways and means of rebuilding countries after armed conflicts and full-out war, studied their background, assessed their consequences and the available resources for reconstruction (see, for example, (barakat & kapisazovic, 2003; tzifakis & tsardanidis, 2006; lemay‐hébert & murshed, 2016). there is also potential for development in analyzing conceptual frameworks and practical cases to understand possible tools for post-war reconstruction (aboushala & haj ismail, 2022) or technological cooperation in the defense industry as a factor of sustainable development (holtström, 2022; callado-muñoz et al., 2022; duginets & nizheiko, 2022). however, while paying tribute to the existing scientific developments of domestic and foreign researchers on this issue, it should be noted that the scientific community has not yet developed a holistic vision of the recovery process and has not assessed its complexity and impact on various sectors of the economy of the whole country. also, the existing modern scientific and practical developments studied by ukrainian scientists since the beginning of the invasion reflect some of the issues in recovery and have not yet been systematically and practically applied (mazaraki & melnyk, 2022; irtyshcheva et al., 2022; zveryakov, 2022; humeniuk, 2022). therefore, the existing global experience of post-war reconstruction requires further in-depth study and systematization for further adaptation in ukraine, which can be successfully used in the post-war recovery of the national economy. the purpose of the article is to study the theoretical and practical developments available in the world science on the formation of strategies for economic recovery of states in the context of war in order to determine the possibility of adapting their experience in the context of ukraine’s economic recovery. to achieve the research goal, the author used a set of complementary methods of scientific knowledge of economic processes and phenomena: historical, logical and systemic-structural methods, comparative and statistical analysis; information, process and institutional methods. the information base of the study includes statistical and analytical materials of the state statistics service of ukraine, the world trade organization, the organization for economic cooperation and development, the world bank group, the international monetary fund, and the official statistics office of the european union; information and analytical collections, bulletins and reviews; factual information of public authorities, domestic and foreign scientific works, results of own research, analytical and information materials from open sources. in addition to the two world wars, more than 350 regional wars and military conflicts took place in the twentieth century. while only 36 regional wars or military conflicts were recorded before the first world war, there were 80 between the world wars, and more than 250 after the second world war: since 1945, more than 12 million military personnel from about 100 countries have participated in military operations, and the number of deaths has exceeded 35 million (10 million in the first world war and 54 million in the second world war) (today’s armed conflicts, n.d.). it should be noted that it was after the second world war that the geneva conventions of 1949 began to use the terms "international armed conflict" (article 2) and "non-international armed conflict" (article 3) along with the term "war" anatolii mazaraki, ganna duginets 85 (ohchr, n.d.). and since the 1950s, the term "armed conflict" has been used more often than the term "war". this substitution is mainly explained by political and ideological considerations, attempts to shift the emphasis in these concepts and the prohibition of war as a means of resolving international disputes. armed conflicts have an impact not only on the national economies of the countries involved, but also on the global economy as a whole. for example, in early 2022, the world bank published its forecasts for global economic growth, predicting 4.1% growth globally and 3.2% in ukraine compared to 2021 (world bank group, 2023). with the beginning of russia's full-scale invasion of ukraine, the world bank's forecasts for global economic growth have been reduced to 2.9% (world bank group, 2022). the data is expected to fluctuate as the war in ukraine started by russia has disrupted investment activity and trade, which is one of the main factors for the formation of a sustainable economy. the drought in europe, covid-19, climate change, and the crisis in global energy markets have also had an additional impact on this forecast. it should be noted that the full-scale armed aggression of the russian federation has disrupted economic relations in the country and caused crises in most areas of socio-economic life. the main problem is the demographic crisis due to the forced migration of the population: the countries of the european union, canada, the united states, the united kingdom, etc. according to the un, more than 18 million people have fled their homes because of russian aggression, which is 42% of ukraine's population. approximately 11 million ukrainians have become internally displaced, some of whom had to leave their homes for the second time. as of october 25, 2022, almost 8 million people have left the territory of ukraine. the majority of them went to the european union and received temporary protection, some reunited with their families or stayed in the eu countries in accordance with the conditions of the schengen zone (unhcr, 2022). speaking about the structure of the population that left the territory of ukraine, it can be classified according to several criteria: age, gender and level of education. in the age structure of refugees, 47% were women, 39% were children, and 14% were men (unhcr, 2023); ukrainians fleeing the war were divided by their gender in the ratio 86/14, 86% were female, 14% were male (unhcr, 2022). this ratio is not surprising, as on february 24, president of ukraine volodymyr zelenskyy signed a decree restricting border crossings to men aged 18 to 60; 46% of refugees had higher education, 29% had completed vocational training courses, and 21% had only a complete secondary education (unhcr,2022). another problem is the destruction of infrastructure. today, the issue of electricity and water supply is relevant, because every day russia launches missile strikes on the country's critical infrastructure. for example, as of october 19, about 40% of ukraine's energy system was seriously damaged. restricting the implementation of international agreements by blocking ports in the black sea. currently, 4 ports in ukraine are temporarily occupied, namely in mariupol, berdiansk, skadovsk, and kherson. as a result of the blockade of ports, a food crisis has begun in the world, which has resulted in a sharp increase in grain prices not only in europe but also in the countries of the african continent and the middle east. for example, in 2020, ukrainian imports to egypt amounted to 3.13%. more specifically, 23.5% and 62.1% of all grain was 86 supplied by ukraine and russia, respectively (wrld bank group, 2023). that is, in general, egypt imported 85.6% of grain from countries that are currently at war. on july 22, the black sea initiative was signed in istanbul, an agreement between the un, ukraine, turkey and russia to establish a corridor to export grain from three ukrainian ports: chornomorsk, odesa, and pivdenne. the agreement was supposed to be in effect for 120 days, i.e. until november 19, with the possibility of extension. on october 29, 2022, russia once again violated international treaties by announcing its withdrawal from the grain deal, after an alleged attack on the black sea fleet in the sevastopol bay. as of the end of 2022, the black sea grain initiative made it possible to export 9,521,645 tons of ukrainian grain and agricultural products to the global market. the primary destinations were the horn of africa, yemen, and afghanistan (world bank group, 2023). loss of jobs, namely 5 million idps lost their jobs, and another 3 million working-age people remain abroad [situation ukraine]. this poses a problem for both the future of ukraine and the current situation for employers in europe. it is worth noting that before the full-scale war, approximately 5% of the population of poland and 2.8% of the population of the czech republic were ukrainians working abroad, i.e. mostly men. today, the share of ukrainians in the population of these countries has doubled. despite the huge amount of potential labor, the governments of the countries faced certain problems, as some male migrants returned to ukraine, freeing up "male" vacancies. a large proportion of people lost their families, jobs, and homes because of the war, meaning that they have to start their lives in a foreign country from scratch (grossi & vakulenko, 2022). the vast majority are women and children of primary and secondary school age. and it is the absence of the latter that poses the greatest threat to the implementation of any recovery strategy for ukraine: the world practice shows that sustainable economic development is based on the accumulation of personalized human capital, which is carried out in a special segment of the education system. therefore, this segment should occupy one of the key places in any version of ukraine's recovery strategy. since russia's recognition of its russian controlled administrations in the donetsk and luhanst regions of ukraine, the european union has been pursuing a sanctions policy that has had a significant impact on the russian economy. to date, the eu has introduced 8 sanction packages, the latest of which was approved on october 6, due to the illegal annexation of four regions of ukraine: donetsk, luhansk, zaporizhzhia and kherson. the eighth sanctions package included the following items: restrictions on imports of steel products, certain types of plastics and chemicals a ban on the use of european crypto wallets european companies are not allowed to provide it and legal services to russians export of civilian weapons, military transport and goods used in the aviation industry to russia is prohibited limiting the price of oil (european commission, 2022). if we highlight the most stringent sanctions against the russian federation that have been imposed over the 9 months of the full-scale invasion, the following items can be included in this list: disconnection from swift of sberbank, moscow credit bank, rosselkhozbank and the belarusian bank for reconstruction and development (6th package of sanctions) anatolii mazaraki, ganna duginets 87 a ban on the purchase, import and transfer of crude oil from russia (6th package of sanctions) partial embargo on oil and gas (4th package of sanctions) a ban on russian ships entering eu ports (5th package of sanctions) blocking of the reserves of the central bank of the russian federation, which are in the banks of the g7 countries, amounting to 50% of all reserves (3rd package of sanctions) it should be noted that the sanctions are taking effect, and, according to the world bank's analysis, russia's gdp will fall by 8.9% by the end of 2022. in turn, the international monetary fund predicts a 6% decline in gdp, and the organization for economic cooperation and development by 5.5% compared to 2021 (european council, 2023). of course, the gdp decline was the result of a decline in trade, as a sustainable positive foreign trade balance is the key to a strong economy. according to the imf forecast, exports from russia will decline by 17.2% and imports by 25.4% by the end of 2022 compared to 2021. (european council, 2023). additionally, the maximum inflation rate is projected to reach 22%, according to the world bank. at the same time, the international monetary fund predicts an increase in the inflation rate by 21.3%, and the organization for economic cooperation and development gives 13.9%. (european council, 2023) ukraine needs to overcome not only the difficult path to victory, which we will definitely do, but also the long road to rebuilding post-war ukraine, as thousands of homes, civilian and critical infrastructure have been destroyed. even now, during the war, we are planning how ukraine will be rebuilt. the first global presentation of the reconstruction project took place on july 4-5 in lugano, switzerland. the plan is designed for 10 years, divided into three stages and includes 15 areas (ukraine recovery plan, n.d.). on october 25, the second conference on ukraine's recovery was held. it was announced that in 2023, ukraine needs at least $38 billion to cover the state budget, and another $17 billion is needed to urgently restore the country's social, energy, and transportation infrastructure. the european union has assured that it will help ukraine to the end, because this is a war not only between russia and ukraine, but also against the entire civilized world (federal government, 2022). meanwhile, to substantiate the strategy of recovery under martial law, it is necessary to analyze the existing world practice the most famous experience of post-war recovery is the so-called post-war economic boom (the golden age of capitalism) that began after the end of the war in 1945 and lasted until the late 1970s. the post-war boom was marked by sustained high economic growth and almost full employment in european and east asian countries, especially in war-torn japan (the japanese economic miracle), west germany (the economic miracle), france (the glorious thirties), italy (the italian economic miracle), and greece (the greek economic miracle). the experience of rapid economic growth during this period is particularly interesting for ukraine, which needs to compensate for the losses from russia's aggression caused by the occupation of crimea, southern and eastern regions, and to quickly and effectively restore the country's economy, including infrastructure destroyed during the war throughout the country. the economy as a whole also needs a new concept of reconstruction that is appropriate to the current situation. among the well-known modern wars are the korean war, the vietnam war, the war in afghanistan, and the war in syria. typical military conflicts include: the cyprus conflict, the 88 georgian-russian crisis, and the armed conflict in eastern ukraine. compared to world wars, regional conflicts are characterized by fewer countries involved, a smaller spatial scale of hostilities, and are usually fought for limited political and military objectives, using traditional military forces and means. in some cases, there is no organized front. most localized wars have been undeclared and began with provocations or border incidents that escalated into large-scale military conflicts. the attacker concentrates his forces and attacks suddenly at the beginning of hostilities, trying to inflict a decisive defeat before the enemy forces complete their deployment and the economy is put on martial law. military conflicts had even more limited political goals and even smaller spatial and temporal scales. these are usually armed uprisings, rebellions, border armed conflicts and incidents. whereas local wars result in a qualitative change in the social condition of the victorious state, military conflicts do not involve a fundamental reorganization of state structures, i.e., mobilization of troops or the transfer of the economy to martial law. in order to end a war and armed conflict as soon as possible, it is necessary to clearly understand the purpose of the conflict. this understanding allows for a compromise acceptable to the parties. the objectives of war were best formulated by b.h. liddell hart in his "strategy of indirect action" (1954) (hart, 2008). he believed that the purpose of war is to create a better world than the one that existed before the war. based on the concept of a "better world", wars can be divided into "just wars", which lead to the development of human society as a whole, and "unjust wars", which lead to its destruction or simplification. countries go to war not for the sake of war itself, but to achieve political goals. therefore, "victory" is a political, not a military concept. military objectives are only a means to a specific political goal, which is determined by the country itself. military actions are only the basis for making a political decision, not for conquest, but for coercion. the goal of wars waged by empires is to control as many resources as possible and reform the "world order" in their interests. from an economic point of view, the difference between war and armed conflict lies in the scale of economic changes and losses. for example, war leads to qualitative changes in the nature of society, as state institutions begin to perform specific functions caused by war. as a result, the life and economy of the society as a whole is rebuilt, which allows it to achieve victory over its enemies. during an armed conflict, political goals are more limited than during a war. it does not involve a radical transformation of the entire state system into a military system. there are significant differences between war and a set of measures to restore the economy after an armed conflict. post-war reconstruction was initially understood as the physical restoration of destroyed industrial enterprises, social facilities and devastated agriculture. then, the concept was gradually deepened: in the 1940s and 1950s, the criterion of recovery was used as the achievement of pre-war gross production in monetary terms. later (1970-1980), reconstruction began to be understood as a complex economic, social, and demographic phenomenon. but in its most general form, economic recovery can be interpreted as a series of measures in various spheres of economic activity based on innovative approaches and technologies aimed at restoring the country's competitiveness, establishing production, improving living standards and increasing domestic and foreign demand. anatolii mazaraki, ganna duginets 89 economic recovery should be based on the development of special programs to "resuscitate" the country's economic activity, and all efforts should be directed to restoring the industrial and agricultural sectors. economic recovery after full-scale military invasion also requires the development of measures necessary to restore and further develop the economy of specific regions, ensure the return of the population and decent living conditions, address various social problems caused by the conflict, restore infrastructure and integrate it with the rest of the country, and develop mechanisms to ensure sources of recovery. first and foremost, recovery is preceded by political decisions based on geopolitical expediency and national patriotism, which determine the development model. based on the results of the analysis of several armed conflicts that took place in the second half of the 20th and early 21st centuries, we can draw conclusions that would allow us to avoid the miscalculations and mistakes of others or to offset them: develop and implement a modern concept of economic restructuring based on innovative development, taking into account the real geopolitical situation. implementation of the strategy for the restoration and development of the east of the country and the return of crimea, developed by domestic scientists and the government. identification of key (priority) development sectors to ensure high competitiveness of goods and services in foreign markets and state support for these sectors. adoption of appropriate legislation on full employment, fair wages, labor productivity and price stability. develop mechanisms for the use and management of borrowed funds. adoption of appropriate legislation to eliminate and prevent excessive concentration of production and capital and to prevent the formation of monopolies. adopt effective economic mechanisms to prevent and combat corruption. developing an effective social policy, i.e. a policy aimed at increasing the income and consumption of the population. create special economic zones and science parks, or recovery areas. for ukraine to rebuild, it is not enough to receive financial support from international investors and partner countries, which is certainly extremely important. first and foremost, the government must rebuild housing for its citizens and put them to work, which will create new jobs and incentives to return to ukraine. in addition, it is crucial to build sustainable institutions that will give international investors confidence in their investments in ukraine. in turn, ukrainians must realize that the state is primarily for and about the people who live in the country, working for the common good and future of the nation. accordingly, on the instructions of the president of ukraine, work has begun on the formation of the funds for the restoration of ukraine in connection with the armed aggression of the russian federation, which will be used to address a number of problems in ukraine depending on their group of specialization (kmu, 2022a). possible sources of financial support for these funds include seized and confiscated assets of the russian federation, international assistance, direct contributions from partner countries, contributions from international organizations, investors, private donors potential strategic investors, ngos, business representatives and citizens, and the state budget of ukraine. in order to strengthen the institutional capacity of the state in implementing the state policy of economic recovery, the national council for the recovery of ukraine from the consequences of war was also established (kmu, 2022b). 90 conclusions in the globalized world of the 21st century, the concepts of national security and economic growth are inseparable, as any armed conflict in a country’s territory sets back its development for years, destroying critical infrastructure, factories, homes and schools, etc. today, the fact of war is felt in most countries of the world, as well-established supply chains are disrupted, which affects prices in countries and, in the worst case, leads to a food crisis. the russian-ukrainian war is the largest milirary conflict in europe since the end of world war ii. identification of the impact of the russian-ukrainian war on the socio-economic situation in the country allows us to determine that the return of people to their homeland should be an extremely important point in the post-war period, since the population of the country is the main resource for further economic development. given that most of the working-age population that left ukraine in search of a safer place to live is already working abroad, this will not be easy. undoubtedly, some will return home through family ties, or men who cannot travel abroad due to restrictions on crossing the border will go to their wives and children when the borders open, further complicating the situation. that is why the government of ukraine should already be developing a clear plan for how people will be returned home. for example, it could be a housing reconstruction program for families whose homes were destroyed by the russian occupiers. if ukrainians are involved in the reconstruction process, it will create new jobs that will be an incentive to return to ukraine. young people who are currently studying at universities will be actively involved in the process of rebuilding ukraine. the country needs specialists who will have a full understanding of how to stimulate the economy to develop, how to build and maintain effective and transparent institutions. that is why further research should analyze the experience of other countries that have been victims of illegal and unjustified military invasions in order to substantiate recommendations for restoring and strengthening the country's economic potential and improving the living standards of ukrainian citizens. in order to substantiate specific consistent tools for ukraine's economic recovery in the long term, further research should include generalization, systematization and comparison of the effectiveness of economic recovery mechanisms in place in the world and domestic practice, development of universal strategic and tactical tools for implementing the chosen strategy, development and evaluation of the predicted/possible results of the model. a key aspect of the elaboration of the strategies is the integration of methods developed by scientists and public services into a single mechanism of functioning to ensure maximum effect of the proposed reforms. 1. aboushala, m., & haj ismail, s. 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(2008). strategy: the indirect approach. in strategic studies (pp. 92-95). routledge. 10. holtström, j. (2022). business model innovation under strategic transformation. technology analysis & strategic management, 34(5), 550-562. 11. humeniuk v. (2022). ukrainian economy during the military aggression of the russian federation and in the period of post-war recovery. ekon ukr. 2022 (8): 34–54. https://doi.org/10.15407/economyukr.2022.08.034 12. kmu (2022a). recovery funds of ukraine. url: https://www.kmu.gov.ua/gromadskosti/fondi-vidnovlennya-ukrayini 13. kmu (2022b). about the national council for the recovery of ukraine from the war. url: https://www.kmu.gov.ua/en/national-council-recovery-ukraine-war/about-nationalcouncil-recovery-ukraine-war 14. lemay‐hébert, n., & murshed, s. m. (2016). rentier statebuilding in a post‐conflict economy: the case of kosovo. development and change, 47(3), 517-541. 15. mazaraki а., & melnyk т. (2022). the world economy: the challenges of the russianukrainian war. ·scientia·fructuosa, 143(3), 4–35. https://doi.org/10.31617/visnik.knute.2022(143)01 16. ohchr. (n.d.). geneva convention relative to the protection of civilian persons in time of war (2nd part) url: https://www.ohchr.org/en/instruments-mechanisms/instruments/geneva-convention-relative-protection-civilian-persons-timewar#:~:text=in%20all%20circumstances.-article%202,recognized%20by%20one%20of%20them. 17. irtyshcheva, i., kramarenko, i., & sirenko, i. (2022). the economy of war and postwar economic development: world and ukrainian realities. baltic journal of economic studies, 8(2), 78-82. https://doi.org/10.30525/2256-0742/2022-8-2-78-82 18. today’s armed conflicts. 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(2006). economic reconstruction of bosnia and herzegovina: the lost decade. ethnopolitics, 5(1), 67-84. 20. ukraine recovery plan. (n.d.). url: https://recovery.gov.ua/en 21. unhcr (2022) ukraine situation: recalibration regional refugee response plan. global focus. url: https://reporting.unhcr.org/document/3472 22. unhcr (2023) situation ukraine refugee situation. unhcr. url: https://data.unhcr.org/en/situations/ukraine 23. von clausewitz, c. (2005). on the nature of war. penguin uk. 24. world bank group (2022). global economic prospects june 2022. world bank. url: https://www.worldbank.org/uk/news/press-release/2022/06/07/stagflationrisk-rises-amidsharp-slowdown-in-growth-energy-markets 25. world bank group (2023). global growth to slow through 2023, adding to risk of ‘hard landing’ in developing economies. world bank url: https://www.worldbank.org/en/news/press-release/2022/01/11/global-recoveryeconomics-debt-commodity-inequality?cid=ecr_tt_worldbank_en_ext 26. yamazawa, i. (1990). economic development and international trade: the japanese model. url: https://scholarspace.manoa.hawaii.edu/server/api/core/bitstreams/e56304a8-bba0-489c-9973-a98668890d73/content 27. zveryakov m. (2022). ukrainian economy during the military aggression of the russian federation and in the period of post-war recovery. ekon ukr. 2 (8): 3–19 https://doi.org/10.15407/economyukr.2022.08.003 https://recovery.gov.ua/en http://www.worldbank.org/uk/news/press-release/2022/06/07/stagflationhttp://www.worldbank.org/en/news/press-release/2022/01/11/global-recoveryhttps://scholarspace.manoa.hawaii.edu/server/api/core/bitstreams/e56304a8-bba0-489c-9973-a98668890d73/content https://scholarspace.manoa.hawaii.edu/server/api/core/bitstreams/e56304a8-bba0-489c-9973-a98668890d73/content https://doi.org/10.15407/economyukr.2022.08.003 agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 154-161 154 social responsibility of business as sustainable development approach in management r. zvarych, i. rivilis roman zvarych¹, igor rivilis² west ukrainian national university, international economic relations department, ukraine ¹ orcid.org/0000-0003-3741-2642, e-mail: romazvarych@yahoo.com ² orcid.org/0000-0003-3764-2843 abstract. the feature of the effective functioning of social relations and the condition of sustainable dynamics of the country's development is socially responsible behaviour of business. in times of crisis, socio-economic processes become unstable, social risks increase and deepen. it is important to balance of social processes by reconciling the interests of economic entities and society, social proportions and certain priorities. in this aspect, the problem of social responsibility of business through the creation of a favourable business environment is of particular importance. as a result, it is important to study the process of corporate social responsibility as sustainable development approach in management. the objective of article is methodological research the concept of social responsibility of business, the key elements of its development, the obstacles to its implementation and systematic improvements of its management. it is proved that responsible business supports high rates of economic growth, ensuring career growth for all employees, as a growing business constantly needs to attract new employees. it is justified that the policy of social responsibility of business must be implemented at the level of strategic management in the activities of the marketing, production and sales departments, as well as in the understanding of the strategy and the readiness to implement it in the workplace. it is suggested that in order to increase the social responsibility of business, it is necessary to ensure the reliability of indicators of financial and non-financial (social) reporting and assessment of the effectiveness of socio-economic costs. keywords: business ethics, corporate culture, social responsibility of business, sustainable management introduction structural shifts in the economy create challenges for society. today, the issues of rational nature use (greening) of industrial productions, reduction of the material intensity of products and stabilization of resource provision of productions are still unresolved. as a result, there is a reduction in the number of enterprises, the environmental condition of industries is deteriorating, which is accompanied by a significant level of environmental pollution, negatively affecting the deterioration of the nation's health. at the business level, the health care crisis has enabled the adoption of corporate social responsibility practices, prompting the adaptation of business strategy, thus contributing to the mitigation of social and environmental problems. mailto:romazvarych@yahoo.com roman zvarych, igor rivilis 155 i. methodology concept of social responsibility of business the concept of social responsibility of business (srb) appeared at the end of the twentieth century and is at the stage of approval. that is why there is no single approach to its definition, but its essence remains unchanged – business must be socially oriented in relation to its own employees, the state, society, the environment and consumers. in many developed concepts, social responsibility is replaced by other definitions, in particular, such as: “corporate social activity”, “business ethics” (kroese, 2022). social responsibility of business has become part of the management system, has acquired special importance and includes several stages of development (see fig. 1). the first stage of the formation of srb (1920-1950) – the main ideologist – h. bowen (1953, research “social responsibility of a businessman”). according to the author, the social responsibility of a businessman consists in “implementing policies, making decisions or choosing a line of behaviour that would be desirable from the standpoint of society's goals and values”. the same time, p. drucker (1986, research “management practice”) considers public responsibility as one of the eight key factors for achieving business goals. at the second stage of srb (1970), the word combination of sr and business ethics was introduced, and special attention was focused on volunteering. according to m. friedman (1970), “social responsibility of business means using one's own resources and involving them in activities aimed at increasing profits, in conditions of open and free competition”. according to a. carroll (1999), the social responsibility of business is compliance with the economic, legal, ethical and philanthropic expectations presented by the society to the organization in this period. figure 1. stages and approaches of social responsibility of business [authors]. і. formation srb іі. business ethics and srb ііі. srb and sustainable developmen t iv. business case for srb v. institutionalization srb approach srb corporate selfishness the enterprise is a tool for creating wealth, and its social activity achieves an economic result corporate altruism businesses have the ability to influence society, and therefore must use this ability responsibly social requirement s the enterprise should focus its activities on determining the social demands of society and responding to them, thereby contributing to the strengthening of its positions stakeholder sthe social role of business should be determined by the requirements of stakeholders, thereby replacing the concept of society with the concept of "stakeholders" ethical duty it is based on the idea of the ethical duty of business and individual managers to society social responsibility of business as sustainable development approach in management 156 the third stage of social responsibility of business was characterized by strengthening its connection with sustainable development (1980). during this period, m. friedman's stakeholder theory was developed, the organizational structure of business social responsibility management began to be discussed, and the concept of sustainable development (development that meets the needs of the present without limiting the ability of future generations to meet their own needs) appeared. the fourth stage (1990) formed the business case for srb. at this stage, three motivational reasons for the development of the concept were formed: environmental protection, ecological diversity and stakeholders (latapi agudelo et al., 2019). the concept of a triangular balance between economic, social and environmental goals of development appeared. the fifth stage saw the institutionalization of business social responsibility at the national level and the emergence of international standards. in the 21st century a new impetus for srb development was achieved through the adoption of the iso 26000 standard, national strategies, state programs on social responsibility and un directives. as a result, the definition was formed: “social responsibility – company's responsibility for the impact of its decisions and actions on society and the environment through transparent and ethical behaviour that contributes to the well-being of society; takes into account the expectations of interested parties; complies with the legislation” (zvarych et al., 2022). having studied the existing theories, it is possible to distinguish the following types of approaches to the concept of corporate social responsibility of business (fig. 1). from the point of view of corporate egoism, corporations are instruments of wealth creation, and all social activity is aimed at achieving economic results. in this way, organizations fulfil their economic functions by producing goods and providing services needed by society, while creating jobs and maximizing profits for shareholders. proponents of this concept emphasize that only in the long-term profit maximization internally determines the real responsibility of the company, since this approach combines the interests of shareholders and other stakeholders (wickert, 2021). the approach from the point of view of corporate altruism defines the entrepreneurial ability to influence society, and, accordingly, the responsibility to use this ability. the most famous is the concept of “corporate citizenship”, which considers the role of business in the sense of social investments and obligations to local communities (lindeque et al., 2022). from the point of view of social requirements, the company should focus its activities on identifying the social requirements of society and responding to them. that is, there was a change from “what is good for society” to “what society requires from business”. the stakeholder approach assumes that, regardless of the type of business or organization, there is a group of people (stakeholders) who influence the company or are influenced by the company, i.e. delegate certain responsibilities. these groups are called “stakeholders” and they include: employees, buyers, shareholders, suppliers, communities, countries and society in general (seely, 2022). the ethical approach is based on the idea of moral responsibility of business managers and individuals to society. according to bukreieva (2022), every business has an economic, environmental and social responsibility to society, ensuring its viability. so, the social responsibility of business is a system of consistent economic, environmental and social measures of the company, implemented on the basis of constant interaction with stakeholders and aimed at reducing non-financial risks, long-term image improvement and ensuring the profitability and sustainable development of the enterprise (clendaniel, 2022). roman zvarych, igor rivilis 157 ii. results ii.1. key elements of entrepreneurship development analysing business activities, it is worth noting that socially responsible companies attach special importance to the training of their professionals, devoting approximately 10% of their own resources to this. companies also lobby for the teaching of specialized subjects in higher education institutions, both for master's and postgraduate studies, as well as in business schools, provide sponsorship and award the best projects of the final year at universities. sustainable development involves reducing inequality, and corporate social responsibility includes an antidiscrimination policy aimed at avoiding any discrimination or inequality based on race, gender, sexual identity, sexual orientation, age, religion or belief, disability, marital status, pregnancy or maternity. the company's anti-discrimination policy includes: cooperation agreements aimed at promoting social and labour inclusion of people with disabilities in the normal working environment; participation in the training program on labour inclusion of young people with certain disabilities; charity sports events for social integration of people with disabilities (bukreieva & denysenko, 2022). the key elements of entrepreneurship development are innovation and industry specialization: investment in business capacity, research and development; financing of analytical research and creation of databases; digital transformation and development of artificial intelligence; exchange of knowledge, participation in specialized forums; participation in industry associations. in addition, socially responsible companies have a corporate culture that assumes equal opportunities and gender equality, without any discrimination, as a basic principle. that is why companies are constantly taking measures aimed at equality between women and men in such key areas as access to work, job stability, pay, regardless of the legal system in the country. responsible business supports high rates of economic growth, ensuring career growth for all employees, as a growing business constantly needs to attract new employees (young graduates) (boiko, 2022). the main points of such obligations include: creation of quality employment; cooperation agreements with schools that give high school students the opportunity to get their first experience working in a business environment; cooperation with universities and business associations – seminars and courses on entrepreneurship; participation in programs that promote innovation and entrepreneurship, fosters critical thinking, problem solving, teaching children and youth certain skills; support for microfinancing, facilitating access to credit and financing for the most disadvantaged groups in society; sponsorship of family entrepreneurship and family business programs (tuxbury, 2022). ii.2. obstacles to implementation of social responsibility of business many factors influence the possibility and scale of corporate policy regarding the social responsibility of business, namely (fig. 2): the level of socio-economic development of the country; the quality of the institutional environment; specifics of the business and social business environment (international business integration, company size, law and order, level of income, consumer protection, level of competition; pandemic; war); differentiation of areas of social responsibility of business; the nature of the impact of social responsibility on financial and economic results in the shortand long-term periods; value orientations of company owners and top managers (greenaway, 2022). the problems and obstacles of social responsibility of social responsibility of business as sustainable development approach in management 158 business include its limited promotion and practical application, in particular (fig. 2): employers violate international norms of human and labour rights; non-compliance with sociallegal and labour rights; low wages; salary arrears; insignificant investments in labour protection, health of employees and professional development (stern, 2022). in addition, it is worth noting the lack of a sufficient number of interested and competent managers, because the policy of social responsibility of business must be implemented at the level of strategic management in the activities of the marketing, production and sales departments, as well as in the understanding of the strategy and the readiness to implement it in the workplace. in addition, there are problems such as low product quality, failure to meet technical production requirements, environmental pollution and unfair competition. also, lack of financial resources, inconsistency of criteria for assessing corporate social responsibility; low level of corporate culture; legal nihilism; and lobbying interests (kurland et al., 2022). figure 2. the problems and obstacles to implementation of social responsibility of business [authors]. ii.3. systematic improvement the social responsibility management regarding the macroeconomic environment in which companies operate during the crisis, it is worth noting that more sustainable growth in markets requires complex and interconnected actions at the national and regulatory levels. to adjust the growth rates, it is necessary to improve corporate governance. the structure of economy can be segmented to accelerate growth by improving corporate governance using a two-step algorithm. prospects for the development of social responsibility projects in developing markets require a national mechanism to promote the systematic improvement of social responsibility of business entities (fig. 3). problems legal economic informational facts of infringement of srb violation of labor standards non-compliance with rights of employees low level of salary arrears from the payment of salary savings on professional development non-compliance with technical requirements environmental pollution obstacles srb limited incentive distorted role of mass media capacity of influence groups limited culture of cooperation adaptation of international policies lack of competent managers factors srb level of socio-economic development of country specifics of the business and social environment the nature of connection of the srb directions the nature of the influence of srb value orientations of top managers roman zvarych, igor rivilis 159 figure 3. mechanism of systematic improvement the social responsibility of business entities [authors]. also, the social responsibility of business is closely interconnected with social consumption. socially responsible consumers consider the social consequences of their consumption and use their purchasing power to incorporate social change into the company (gilles, 2021). in this sense, it is a conscious choice of consumption based on moral and personal beliefs. it is conceptualizing the consumer as the responsible person who, based on the purchase of a certain product or service, minimizes or eliminates harm to society, thus maximizing positive impact in the long term (zvarych et al., 2022). ethical consumer behaviour, on the other hand, refers to their choice of one company and one or another product based on political, religious, environmental or social motives, as well as considering labour issues when shopping. in this case, in order to increase the srb, it is necessary to: create a system for obtaining reliable and timely information about the social, economic and public impact of companies; ensuring the reliability of indicators of financial and non-financial (social) reporting and assessment of the effectiveness of socio-economic costs; financial support of the social package through the social security plan of the organization's employees (an integral part of the event organization plan) (zvarych et al., 2022). conclusions global crises have encouraged companies to increasingly include social and environmental aspects in their business activities. this was largely driven by government regulations and is a potential source of competitive advantage for companies. in addition to government pressure, coercion has been another catalyst for the adoption of corporate social responsibility practices. actions focused on environmental outcomes have become central to sustainable development, as the adoption of such practices drives corporate development as well as investment. the debate between interest groups and shareholders has intensified in recent years as regulatory and enforcement pressures on companies have led to the inclusion of sustainable indicators such as esg (environmental, social and governance indicators), which include aspects of related to climate change, pollution, working conditions. the components that make up social responsibility have been disrupted by the pandemic, which has greatly affected the global economy due to the policies put in place to stop the spread of the virus. protection of social and labor rights of employees and consumer rights improving community life and reducing gaps in regional development ensuring the sustainable development of the country's economy and society increasing the competitiveness of the economy, social consumption reduction of unemployment, removal of social tension raising the standard of living, creating a middle class rational use of natural resources and reduction of pollution promotion of investment and innovation processes economic and social integration social responsibility of business as sustainable development approach in management 160 environmental performance during the pandemic and war in ukraine prompts a decline in proactive environmental action, as these issues are central to the world (zvarych et al., 2022). responsible business supports high rates of economic growth, ensuring career growth for all employees, as a growing business constantly needs to attract new employees: creation of quality employment; cooperation with universities and business associations; support for microfinancing; sponsorship of family entrepreneurship. the obstacles of social responsibility of business include: violation by employers the international norms of human and labour rights; non-compliance with social-legal and labour rights; low wages; salary arrears; insignificant investments in labour protection, health of employees and professional development. the prospects for the development of social responsibility projects require a national mechanism to promote the systematic improvement of social responsibility of business entities. also, socially responsible consumers consider the social consequences of their consumption and use their purchasing power to incorporate social change into the company. future research in this direction should be directed to the problems of sustainable business development in the conditions of war, as well as to the areas of manifestation of the implementation of social responsibility of business in the post-war period. references 1. boiko, o. 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(2022). risk management of digital transformation under pandemic. herald of economics, 2, 142–156. https://doi.org/10.35774/visnyk2022.02.142 https://onlinelibrary.wiley.com/doi/full/10.1111/basr.12265 https://www.researchgate.net/publication/330563745_a_literature_review_of_the_history_and_evolution_of_corporate_social_responsibility/link/5fc4823fa6fdcc6cc6846b04/download https://www.researchgate.net/publication/330563745_a_literature_review_of_the_history_and_evolution_of_corporate_social_responsibility/link/5fc4823fa6fdcc6cc6846b04/download https://journals.sagepub.com/doi/full/10.1177/21582440221085020 https://onlinelibrary.wiley.com/doi/10.1111/joms.12775 https://doi.org/10.35774/visnyk2022.01.038 https://doi.org/10.35774/visnyk2022.02.142 agora international journal of economical sciences, http://univagora.ro/jour/index.php/aijes issn 2067-3310, e-issn 2067-7669 no. 1 (2023), pp. 1-13 1 impacts of chatbots on the accounting service industry d.m. coman, v. state, m.c. voinea, g. cucui dan marius coman¹, violeta state², maria cristina voinea³, gabriel cucuiº faculty of economics, valahia university of târgoviște, romania ¹ orcid.org/ 0000-0003-4937-6327, e-mail: cmnmarius@yahoo.com ² orcid.org/ 0000-0002-7814-5408 ³ orcid.org/ 0000-0002-8135-6409 º orcid.org/ 0000-0003-0949-541x abstract. the integration of chatbots into the accounting services industry has become increasingly popular, and their adoption rates are expected to almost double in the next two to five years. chatbots can automate routine tasks, allowing accountants to focus on more complex and client-oriented work, and ai-powered chatbots can provide more accurate data entry and reduce the time spent on manual tasks. however, their successful implementation requires consideration of a range of challenges. these include integration with existing systems and processes, data privacy and security concerns, ensuring accuracy and consistency in responses, and managing customer expectations and trust. the financial industry is increasingly turning to the use of chatbots for customer support and sales. the global conversational ai market is expected to grow significantly in the coming years. the analysis of the answers given by chatgpt highlights both positive aspects: the generation of acceptable answers to questions of a theoretical nature; compiling information very well from various available information sources; providing answers to all questions asked; as well as negative aspects: making erroneous calculations when asked to solve practical problems that require a selection of information from different sources available; the elaboration of correct but incomplete answers for the cases in accounting; and the use of this tool in accounting. keywords: chatgpt, accounting profession, accounting information systems introduction during human evolution, small improvements constantly appear, in a process of continuous innovation. but there are also moments of rupture when technology can suddenly and radically change things in several areas. we are currently experiencing such a change, with the launch of the chatgpt application, which represents an artificial intelligence system capable of conversing with people in natural language. the system was taught to answer questions, being trained with all the information that exists as text on the internet – at the time of 2021. chatgpt was developed by openai and is considered one of the most advanced chat systems in the world. with over 100 million users in the first two months after its launch, chatgpt has become not only the most successful conversational artificial intelligence model but also the application with the fastest rate of adoption in human history (dowling & lucey, 2023). mailto:cmnmarius@yahoo.com impacts of chatbots on the accounting service industry 2 this evolution of artificial intelligence systems represents a paradigm shift in humanmachine interaction embodied in the way people search for information on the internet. in this sense, there is fierce competition between google and microsoft companies that want to integrate these tools into search engines and thus win a significant market segment (vasile, 2023). the key concepts identified in the literature that are related to chatgpt technology and are used throughout the paper are: gpt artificial intelligence broad language model (llm) developed by openai, based on a neural network with 175 million parameters able to produce text responses that are identical to those provided by the human factor (a. shaji george et al., 2023); chatgpt is an extension of gpt technology, used to produce dialogue with the user (lund & wang, 2023). given its recent launch into the internet space, academic studies on chatgpt are still in their infancy. our goal is to assess the capabilities of this tool when used within the work of accounting professionals, thus strengthening the idea of a first-line tool, in which the human factor can eliminate tedious, time-consuming tasks. going beyond the area of clarifying the theoretical notions regarding chatgpt, in section 2 we will describe the research methodology and debate the assumed research objectives, in section 3 we will present the results obtained based on the questions introduced in chatgpt, and in section 4 we will present the conclusions of the experiment carried out and at the same time the opportunities and limitations of using this tool. i. methodology the article focuses on a study carried out intended to highlight the extent to which chatgpt can help accounting professionals in carrying out the activity. this is in the sense of improving the time allocated to solving specific problems. consequently, financial-accounting activity could become more efficient, as the ratio between simple, repetitive, routine tasks and more complex tasks, analysis, and consulting will shift. the empirical study envisages a simulation of the integration of the ai tool in the existing it systems within economic agents, a discussion on the opportunity to perform the professional duties of accounting professionals with ai tools, and ends with a session of questions related to aspects in the area of accounting and answers provided by chatgpt. the questions were formulated by academic staff within the university and they also checked the consistency, logic, and usefulness of the answers provided by chatgpt. summarizing, the objectives of the present study boil down to verifying the following research hypotheses:  is chatgpt a tool that can be integrated into the activity of economic departments?  is ai technology (including chatgpt) a driver of innovation within the accounting profession?  are the answers provided by chatgpt correct in terms of content and applicability? i.1. integration of the chatgpt tool into economic management it systems economic management information systems (is) have seen a permanent evolution conditioned by technological progress, starting with spreadsheets, moving to stand-alone information systems, erp-type systems, and finally to ai (jang et al., 2021). the strategic dan marius coman, violeta state, maria cristina voinea, gabriel cucui 3 move by companies to use artificial intelligence in professional activities has led to an acceleration of the implementation of advanced data analysis algorithms and the simulation of human language conversation within it systems (leitner-hanetseder et al., 2021). according to pérez estébanez, (2021), an it solution that incorporates ai technologies offers numerous benefits to companies in terms of:  carrying out analyses. ai models can significantly improve estimates by making effective use of historical data. specific applications are: better management of seasonality to avoid underor over-production; using machine learning algorithms to track an item throughout its life, from manufacturing to sale; detailed sales analysis;  managing customer relationships. using ai technology at the is level can result in faster, more cost-effective, and more stable service delivery. the most common use of the chatbot is using a chatbot to quickly answer common questions asked by customers;  management of back-office activities (accounting). in financial-accounting management, ai technology can contribute to automating repetitive accounting operations; increasing the efficiency of transaction processing and the accuracy of reports. by integrating artificial intelligence as a virtual assistant, the operations that the user must do to access data within an integrated it system are optimized (sharma et al., 2022). the benefits brought by ai to an is are decision-making support; easy and efficient access to stored data; automatic recording in the system of all data that can be analyzed or reported immediately; improved management of workflows in the company (rhim et al., 2022). figure 1. scenarios regarding the integration of chatgpt within an erp (source: own conception) query: what is the supply requirement for the next period? answer: chatgpt will display a list containing order proposals to suppliers – for material requirements, calculated based on existing stock and sales, production orders. integration of the virtual assistant in the activity of the economic department query: does it filter all return orders associated with suppliers and display the reasons for the returns? answer: chatgpt displays the list of returns. query: does it go into the item catalog where the vendor bids are kept and identify three vendors that offer the item we need? answer: chatgpt displays the list of the three suppliers that have the required item in their portfolio. activity 1: checking the supply requirement for a certain period. activity 2: identifying returns. query: send an email to each supplier and ask for a quote for the item you want? answer: chatgpt summarizes the suppliers' bidding conditions in a document. activity 4: establish business relationships with a supplier who has the best offer. query: turn the email response into a firm purchase order and send it to the supplier. answer: mail sent to company lists. activity 3: if a supplier is found to have repeatedly delivered an item that does not meet quality standards, the firm decides to stop buying from that supplier. impacts of chatbots on the accounting service industry 4 a possible scenario for the use of chatgpt in the economic department concerns the verification of supply requirements and the identification of new product suppliers. this is in case the current suppliers offer products that do not comply with the company's quality standards. the dialogue between the human operator and the virtual assistant is carried out by typing the text shown in figure no. 1. it can be seen that tools from the field of artificial intelligence will become common components in erp-type systems, helping to improve the experience of those who use them in terms of interaction with suppliers. i.2. chatgpt, the innovation factor in the accounting profession after the hysteria of robots taking the place of workers in factories, the mass media is currently circulating the idea of the disappearance of some traditional professions. the appearance of printing did not lead to the disappearance of handwriting, nor will ai replace creative work (bommarito et al., 2023). when asked what chatgpt is, it describes itself as "a virtual entity, without a body or physical presence, whose purpose is to help people solve their problems or answer questions the most clearly and accurately possible." the study leadership in ai 2021: boards, barriers and new beginnings designed by venugopal (2020) presents the degree of adoption and benefits of artificial intelligence in different organizations, as well as the possible impact of this technology on business and organizational cultures. the study highlights that governing bodies recognize the value of artificial intelligence, but are concerned about the ability of the human factor to adapt to rapid technological developments. this is given the required levels of technical knowledge and acceptance of technology. chatgpt is an indicator of progress made in the field of technology and a step closer to a system capable of thinking at a human level. in this sense, we can list the areas in which chatgpt could be a colleague of the human factor (a. shaji george et al., 2023):  technology and artificial intelligence could support professions related to software development and web design. this is because chatgpt has a considerable success rate in writing software code, using as a source the code libraries published on various specialized platforms;  mass media (advertising, journalism, graphic designers), chatgpt, and other similar forms of artificial intelligence can support the human factor in creating relevant content within a reasonable time frame;  in the legal sector, chatgpt can sift through large amounts of legal information and present it in a logical format within a legal memo. ai will not be able to fully automate judicial work because a certain degree of human judgment is needed to understand what a client or employer wants.  consulting (financial analysts, personal financial advisors, market research analysts), ai technology is suitable for: identifying trends, highlighting profitable investments, and communicating synthesized information to clients/investors;  in the accounting services industry, due to the regulated nature of the activity, but also to the manipulation of structured data, chatgpt is an ideal tool to replace repetitive dan marius coman, violeta state, maria cristina voinea, gabriel cucui 5 activities. accounting professionals find real support in ai tools to revolutionize the way they organize accounting records and interact with clients. chatgpt represents a tool with significant potential in the activity of accounting professionals. due to the accumulation of information resources, accounting professionals must adapt to evolving technologies by evolving from the stage of clerks to knowledge workers to provide business consulting to clients (bommarito et al., 2023). this paradigm shift in the accounting profession also takes place in conditions where the positions of novice accountants, whose task is to enter data from a physical format into various it applications, are no longer of interest to the human factor. how accounting professionals can integrate this tool into their activities (alshurafat, 2023):  assistance with generating financial reports and documents. in this case, by giving it access to the necessary data, the ai model takes care of generating financial reports accurately and in a short time frame compared to the time required by humans.  usefulness in data analysis. the ai model can be trained to analyze data and provide insights and recommendations.  automation of routine activities (e.g. data entry and reconciliation) gives more time to the accounting professional for more complex tasks;  assisting customers by providing answers to their questions. worldwide, it is estimated that this technology will have an overwhelming impact on the accounting profession, quantified by saving 400 million work hours/year for manual data entry, increasing labor productivity by 25%, and reducing errors by 10% (brachten et al., 2021). the main disadvantage of using chatgpt in the work of a professional accountant is the time and cost required to implement and learn this tool (alshurafat, 2023). the opinion that chatgpt could replace some jobs is exaggerated. human judgment must be used to avoid errors and harm caused to customers on the one hand, and on the other hand, to assume responsibility in case they occur. in this sense, no technological tool will be able to replace human-to-human interaction, but it is possible to establish a hybrid work regime in which the individual factor will supervise an army of robots that perform tasks with a medium degree of complexity, the responsibility remaining in continuation in man's charge. i.3. chatting with chatgpt chatgbt is a prototype dialogue-based artificial intelligence chatbot capable of recognizing natural human language and generating human-like text. tools in this category have been around for a while, but previous versions "didn't understand" what people were talking about. this tool gives the impression that you are talking to a person, who understands your intentions and goals. key features of chatgpt that recommend it as the perfect tool to improve productivity are efficiency in extracting information from data sources available on the internet, applying analytical techniques to process data, interpreting and displaying it in a cursive format, and logically, continuous learning based on interaction with users (aydın & karaarslan, 2022). considering the benefits of chatgpt technology, we propose to investigate how it can answer a series of questions in the field of accounting, thus verifying its ability to respond impacts of chatbots on the accounting service industry 6 correctly, completely, and on time to cases formulated by the accounting professional, on the model of a study identified in the specialized literature (street & wilck, 2023). some 10 questions related to accountants, accounting, and the application of profit tax calculation algorithms were formulated considering romanian tax legislation. the first 3 questions addressed to chatgpt consider how the system can extract relevant information related to tax legislation and its application in some cases. in this case, it is necessary to determine profit tax or the classification of some social expenses as deductible. the following 4 questions are aimed at verifying how the system can provide a precise answer concerning the way to evaluate stocks when leaving the patrimony, the conditions for classifying assets as fixed assets, the enumeration of accounting work regarding the closing of the financial year, and the way to optimize the tax on profit allowed by romanian tax legislation. the last 3 questions are related to the accounting profession. they are aim to check the system's ability to develop an answer regarding the mission of accounting experts and the difficulties of this profession. ii. results the results of the questions posed to the chatgpt tool have been evaluated by professional accountants in terms of the efficiency and accuracy of the information provided. the answers are below in edited form to extract the essentials. in this regard, references to the resources from where the chatgpt tool adapted text sources in an attempt to answer the formulated questions were removed. the numerical examples are expressed in the national currency specific to romania the romanian leu. the first set of questions refers to how the system can extract relevant information related to tax legislation and its application. this is required to determine profit tax or the classification of some social expenses as deductible. query 1: to calculate according to romanian legislation, the profit tax related to the 2nd quarter of 2022 knowing that:  cumulative total revenues on 30.06.2022 are 425,000;  cumulative total expenses on 30.06.2022 are 384,500, of which: 3,500 protocol expenses and 1,650 expenses with profit tax related to the 1st quarter. answer 1: according to romanian legislation, profit tax related to the 2nd quarter of 2022 can be calculated using the following formula: taxable profit = total income total expenses accounting professional comment: tax result = total income – total expenses – tax deductions – non-taxable income + non-deductible expenses in the given case, the total accumulated revenues on 30.06.2022 are 425,000, and the total accumulated expenses on the same date are 384,500. of these, 3,500 are protocol expenses and 1,650 are expenses with profit tax related to the 1st quarter. therefore, the total expenses adjusted for the calculation of profit tax are 384,500 3,500 1,650 = 379,350. the taxable profit is equal to 425,000 379,350 = 45,650 accounting professional comment: protocol expenses are deductible within the fiscal result limits of 2%. deductible protocol expenses = 2% * 45,650 = 913 non-deductible protocol expenses = 3,500 – 913 = 2,587 dan marius coman, violeta state, maria cristina voinea, gabriel cucui 7 taxable profit = 425,000 – 384,500 + 2,587 + 1,650 = 44,737 the profit tax related to the second quarter of 2022 is 16% of taxable profit. thus, the profit tax for the 2nd quarter of 2022 is: 45,650 x 16% = 7,304 accounting professional comment: incorrectly determined taxable profit leads to incorrect calculation of profit tax; the profit tax related to the 1st quarter was also not taken into account, which will be deducted from the amount calculated for the 2nd quarter (in romania, the result is taxable and the profit tax is determined cumulatively from the beginning of the year). thus, the profit tax calculated for the 2nd quarter of 2022 is: 44,737 x 16% = 7,158 profit tax due for the 2nd quarter of 2022: 7,158 – 1,650 = 5,508 query 2: according to the labor code, a commercial company will spend 365,000 on staff salaries in 2020. during the year, the company grants gifts, in cash, to the minor children of employees for 5,000. in addition, it bears the cost of rest treatment benefits for its employees and their family members for 13,000. to determine if social expenses are fully deductible? answer 2: to determine the fiscal result of a commercial company, the expenses incurred to carry out the economic activity, including those regulated by the normative acts in force, as well as the registration fees, contributions, and contributions owed to the chambers of commerce, are considered deductible expenses. in the case of social expenses, their deductibility is limited to 5% of staff salary expenses. thus, if you record social expenses in the amount of up to 5% of staff salary expenses, they are fully deductible when calculating profit tax. if the value of these expenses exceeds 5% of staff salary expenses, they are deductible only within the limit of 5% of staff salary expenses. in the current scenario, the expenses for staff salaries are 365,000. rest treatment benefits for own employees and their families in the amount of 13,000 fall within the expenses incurred to perform an economic activity and, therefore, are fully deductible. however, the expenses with the gifts given in money to the minor children of the employees, for 5,000, represent social expenses. as a result, they are limited to 5% of the expenses with the salaries of the staff. due to the above situation, 5% of the staff salary expenses are 18,250 (36,5000 x 5%), so costs for 5,000 gifts for minor children of employees are fully deductible. accounting professional comment: correct answer provided by chatgpt. query 3: as of march 31, 2020, the following data are known:  revenue from sales of 62,500;  total expenses for 37,5500, of which: 3,500 maintenance and repair expenses and 2,500 fuel expenses. knowing that the car is not used exclusively for economic activity, determine the profit tax due at the end of quarter 1 of 2020. answer 3: to determine the corporate tax due at the end of q1 2020, the company's taxable profit must first be calculated based on the data provided. the taxable profit is calculated by subtracting the deductible expenses from the income obtained in the respective period. from the data provided, sales revenues are 62,5000, and total expenses are 375,500. therefore, the taxable profit is 249,500. impacts of chatbots on the accounting service industry 8 accounting professional comment: chatgpt does not take into account the provisions according to which when a car is not used exclusively for economic activity, maintenance and repair expenses, as well as fuel expenses, are deductible at a rate of 50%. taxable profit = 625,000 – 375,500 + 3,000 = 252,500 where 3.000 = 50%*(3,500 + 2,500) profit tax = 16% * 252,000 = 40,400 regarding the corporate tax due at the end of quarter 1 of 2020, it is imperative to note that for companies paying quarterly corporate tax, the tax due for that quarter is calculated by applying the corporate tax rate to the taxable profit made in that quarter. according to the available information, the company has not yet paid its profit tax for 2019. by government emergency ordinance no 69/2020, on march 31, 2020, interest, penalties, and all accessories related to the main budgetary obligations outstanding on that date are canceled, if certain conditions are met. however, nothing is mentioned about the cancellation of back taxes. therefore, the company may also have to pay the outstanding profit tax for the year 2019, in addition to the profit tax related to the 1st quarter of 2020. if the company has not paid profit tax for the year 2019, it may be subject to penalties and interest for late payment. this is according to the fiscal code. accounting professional comment: in romania, the principle of independence of financial years is applied, so the result of the year 2020 and the related profit tax are treated independently of the result and the tax related to the year 2019. considering the answers received, we can distinguish the following limits of chatgpt in solving some requests in the financial-accounting-fiscal field: 1. query responses are the result of knowledge generated by an amalgamation of published materials that refer to various periods. chatgpt does not distinguish current/applicable information from outdated/repealed information. 2. is not trained to make correlations and compilations between several sources from different fields: accounting, taxation, labor law in solving a case 3. cannot distinguish between certain nuances/peculiarities in the application of accounting and tax legislation 4. has difficulty determining which accounting method/accounting policy/accounting regulation/tax regulation should be used when there are several alternatives. the 2nd set of questions refers to the verification of how the system can provide a precise answer regarding the way of evaluating the stocks when leaving the patrimony, the conditions for classifying the assets as fixed assets, the enumeration of accounting works regarding the closing of the financial year, the way of optimizing the profit tax allowed by romanian tax legislation. query 4: how are stocks of raw materials valued upon exiting the estate? answer 4: there are several calculation methods for the valuation of raw material stocks at the exit of the estate, including the weighted average cost method (wac), the first-in-firstout (fifo) method, and the last-in-first-out (lifo) method. when leaving the estate, stocks can be valued at their cost or entry value. in addition, it is imperative to take into account relevant aspects of the proper conduct of the inventory and stock valuation process. these aspects include the determination of inventory periods, process responsibilities, and inventory procedures. dan marius coman, violeta state, maria cristina voinea, gabriel cucui 9 accounting professional comment: correct answer. query 5: what are the conditions for classifying goods as fixed assets? answer 5: fixed assets are those tangible assets related to fixed capital defined as the object or complex of objects that are used as such and cumulatively meet the following conditions: they have an input value greater than the limit established by government decisions and are used for a period greater than one year. to qualify an asset as a fixed asset, it is imperative that it brings future economic benefits and is held for more than one year. in this sense, there is no minimum value imposed by accounting regulations. there are many cases in practice regarding the classification of purchased goods as fixed assets or inventory items. therefore, it is imperative to understand the differences and similarities between the two accounting categories. accounting professional comment: fiscal regulations impose a minimum entry value for goods with a useful life of more than 1 year to be classified as fixed assets; the fiscal implications consist of the number of expenses that will be recorded from the moment of putting into use (through depreciation, the input value is gradually recovered on account of the expenses; if the input value is below the minimum established by the tax law, the respective goods are considered inventory objects whose value entrance fee will be fully recovered at the time of commissioning). query 6: what are the requirements for the preparation of financial statements for the year 2022? answer 6: closing the financial year is a crucial process in accounting and aims to record all transactions and business activities related to a fiscal year and prepare financial statements for reporting. according to the accounting regulations regarding individual financial statements and consolidated annual financial statements, approved by order of the ministry of finance no. 1802/2014, the accounting works regarding the closing of the financial year for the year 2022 should comply with the following requirements for the preparation of financial statements:  accounting for all financial transactions and activities related to the fiscal year.  preparation of individual financial statements and, as the case may be, consolidated annual financial statements.  preparation of accounting documents required for closing the financial year, such as accounting journals, trial balances, accounting records, and other specific documents. carrying out the inventory of the heritage, highlighting the differences between the stocks and assets inventoried and those recorded in accounting.  recording of accounting adjustments necessary to correct errors or to reflect additional information related to the closed financial year.  preparation of financial reports to present the financial situation of the entity at the end of the financial year.  in addition, it is imperative to note that the closing of the financial year must be carried out according to the legal provisions in force at the time. this is to ensure compliance with current tax and accounting regulations. accounting professional comment: correct answer. impacts of chatbots on the accounting service industry 10 query 7: how can the romanian tax law optimize the profit tax? answer 7: in romanian tax legislation, there are several ways to optimize the profit tax, which can be used by companies to reduce the tax burden and obtain a higher net profit. in july 2022, by government emergency ordinance no. 16/2022 for the amendment and completion of the fiscal code, some fiscal changes were made that could be useful for this purpose. in addition, other measures can be considered, such as:  deductibility of research and development expenses: companies can deduct research and development expenses up to 50% of the profit tax due in the respective fiscal year.  deductibility of sponsorship expenses: companies can deduct sponsorship expenses up to 0.5% of the net turnover achieved in the respective fiscal year.  transfer of profit to other countries: companies can transfer the profit obtained in romania to other countries through transfer pricing so that the tax paid in romania is lower. however, certain conditions and procedures provided by the fiscal code must be respected. it is critical to note that any tax optimization measure must follow the tax legislation in force. this is so as not to break the law and avoid possible problems with the tax authorities. that is why it is recommended to consult a tax consultant before making any decision to optimize profit tax. accounting professional comment: correct answer. regarding this second set of questions, we can conclude that chatgpt "did better", in the sense that it can understand the language specific to the field of accounting taxation. for questions of a theoretical nature, the answers are acceptable at first glance. but a closer look reveals that there are omissions, thus confirming that chatgpt knows a lot about a lot of things. set 3 of questions refers to the accounting economist profession. query 8: what can you tell me about accountants in romania? answer 8: romanian accountants are professionals in the field of accounting who have the role of assisting companies and organizations in the administration of financial information. they deal with the registration, classification, and reporting of financial information. in addition, they prepare accounting and tax reports according to accounting standards and tax legislation in force. accountants can work within a company or as independent consultants. accountants in romania must be members of a professional body, such as the chamber of accounting and accounting expertise in romania. this helps them stay up to date with developments and standards in the field of accounting. accounting professional comment: correct answer. query 9: how difficult is it to be an accountant in romania? answer 9: it is a field with high requirements, which requires solid knowledge of accounting, taxation, and legislation. accountants in romania must pay attention to details, have communication skills and be able to work with complex financial data. it is also imperative to be aware of legislative changes and international accounting standards. however, for those who are passionate about the field and want to develop professionally, being an accountant in romania can be a satisfying career with growth potential. businesses and organizations can benefit from their expertise and they offer financial advice. dan marius coman, violeta state, maria cristina voinea, gabriel cucui 11 accounting professional comment: correct answer. query 10: if you lived in romania, would you choose to be an accountant? answer 10: as an ai language model, i don't have a personality or preferences, but i can tell you that being an accountant can be a fulfilling job with growth potential. accounting is a vital field, essential for the efficient functioning of businesses and organizations, and offers the opportunity to contribute to sound financial decisions. however, this decision should be made based on your passions and skills, so that you can ensure that you choose a career that will bring you long-term satisfaction and fulfillment. accounting professional comment: correct answer. chatgpt can generate answers to general accounting questions due to its ability to retrieve and compile logically various information. this is not related to the application of reasoning or a deep understanding of various regulations/standards in the field. conclusions artificial intelligence, with all its components, has proven its usefulness in many activities of daily life. much of the progress in the current period is due to the way we use this technology. the adoption of ai by companies will generate competitive advantages and financial benefits. chatgpt is a general-purpose language model that is not specifically optimized for accounting. however, it can understand and generate accounting text, but may not be able to perform complex tasks that require domain-specific knowledge or expertise. following the application of the tool to a set of 10 accounting and taxation questions and based on the evaluation of the answers by accounting professionals, we can conclude that the influences of chatgpt on the exercise of the accounting profession can be both positive and negative. positive influences on using chatgpt in accounting:  generating acceptable answers to theoretical questions.  the ability to answer all questions.  the ability to logically compile the information to which it has access. the negative impact of using chatgpt in accounting consists of:  performing erroneous calculations when asked to solve applied practical problems that require a selection of information from different available sources;  incomplete elaboration of answers, despite correctness. considering the responsibility and responsibilities of accounting professionals in their relations with both economic agents and state institutions, we consider it inappropriate to use chatgpt as a working tool in the exercise of the accounting profession. it is imperative to point out the limitations of the study. starting with the stated purpose, that of verifying the impact of the use of chatgpt technology in the exercise of the accounting profession, in the field of accounting, the main limitation is related to the content of the queries. the questions have a relatively simple character, without requiring complex reasoning. consequently, the professional accountant's needs regarding the qualities/capabilities/competencies required from a robotic work partner are insufficiently defined. it is possible, however, to use the study as a starting point for future research. in this impacts of chatbots on the accounting service industry 12 sense, as knowledge about chatgpt technology deepens, we set out to develop a questionnaire for the study of the acceptance of this technology among accounting professionals. going beyond the scope of the present work, we can affirm that artificial intelligence is in the "golden period" of its existence. this is due to the technical advances that make its application possible and the interest of the human factor in its exploitation. with chatgpt going public and its acquisition by microsoft, competing firms found themselves at a competitive disadvantage. in these conditions of the recognition of ai as a vehicle for positive change, in the next period, we will witness the public launch of similar tools by companies in the tech industry (e.g. google, amazon, facebook). references 1. alshurafat, h. 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